Intel’s (INTC) stock is down about 4% on reports that the company’s partnership with Nvidia (NVDA) is in trouble.
According to multiple media reports, Nvidia has stopped testing Intel’s 18A microchip manufacturing process.
Nvidia had struck a partnership with Intel earlier this year and was evaluating whether it could manufacture its microchips and processors using Intel’s production technology.
The media reports state that Nvidia has decided not to move forward with Intel’s manufacturing process and is now looking elsewhere for help making its microchips.
The negative news comes months after the two semiconductor companies announced a major collaboration in September.
Under that agreement, Intel would develop custom processors for Nvidia’s artificial intelligence (A.I.) infrastructure, while also integrating Nvidia’s microchips into personal computers.
As part of the partnership, Nvidia had committed to investing $5 billion U.S. in Intel’s common stock at a purchase price of $23.28 U.S. per share.
The reported testing halt raises questions about Intel’s manufacturing process, which the company has said is critically important to its turnaround strategy.
Intel is aiming to compete against Taiwan Semiconductor Manufacturing Co. (TSM), which currently makes about 75% of the world’s microchips, including for Nvidia.
Despite the pullback on Dec. 24, Intel’s stock has gained 80% this year to trade at $36.35 U.S. per share.
