Latest news with #chipmanufacturing
Yahoo
3 days ago
- Business
- Yahoo
ASML: Limited China Risk, Leading-Edge Exposure Could Drive Outperformance
ASML Holding N.V. (NASDAQ:ASML) is one of the . On July 24, New Street Research upgraded the stock to 'Buy' with a €790 price target driven by ASML's strong positioning for 2026 and the potential to outpace peers in the semiconductor capital equipment space. According to New Street, consensus estimates of 2% growth for next year are 'conservative.' They believe that there is 'room for ASML to outperform, driven by high leading-edge exposure.' The company stands to benefit from 'higher growth in leading-edge WFE spending and limited risk of share loss in China,' the firm noted, which would eventually result in growth in the 'upper end of its peer group.' The firm further cited that normal order intake in quarter 3 would allow ASML to ease concerns around growth for 2026. The stock is currently below both its historical averages and peers, but there is limited risk of further de-rating. A technician operating a robotic arm on a production line of semiconductor chips. Moreover, while it remains unclear how much spending will be done on wafer fab equipment, a broader pullback can be expected next year. ASML Holding N.V. (NASDAQ:ASML) develops and sells advanced semiconductor equipment, including lithography, metrology, and inspection systems for chip manufacturing. While we acknowledge the potential of ASML as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None.
Yahoo
4 days ago
- Business
- Yahoo
Intel slumps as potential foundry exit deepens investor gloom
By Rashika Singh and Deborah Mary Sophia (Reuters) -Intel shares sank 8% on Friday after the company warned of exiting chip manufacturing if it fails to secure a major customer, a potentially drastic move by the new CEO to cut spending and revive the struggling American icon. Lip-Bu Tan said on Thursday he would further shrink Intel's workforce, halt work on two plants in Europe and slow another in Ohio, binning his ousted predecessor's strategy that relied on building costly facilities to restore its manufacturing edge. The plan for such extreme measures follows a surprise second-quarter adjusted loss and a forecast for a bigger-than-expected loss in the third quarter. The weakening financials pointed to more trouble for Intel after years of mismanagement eroded its PC and datacenter market share and left it with almost no presence in the AI market. The disclosures "revive long-unanswered questions on the chances of success for its foundry business the path forward is if Intel does not develop leading edge manufacturing capability," TD Cowen analyst Joshua Buchalter said. "It's hard to understate the significance of this potential outcome in the context of the history of the semiconductor industry." As part of its new strategy, Intel may reserve the advanced 18A manufacturing process for its products and proceed with its next-generation 14A only if it lands a major external customer commits, Tan told analysts on the post-earnings call. The move could put $100 billion in assets at risk and deepen its dependence on rival TSMC, adding strain to margins already running at about half their historical highs. "Intel Foundry is a big story and currently people are questioning how successful 18A is. A failure in 18A will be a broken story," said Hendi Susanto, portfolio manager at Gabelli Funds. Intel was set to lose nearly $8 billion in market value, if current losses hold. Its current valuation of around $100 billion is less than half of Advanced Micro Devices' more than $260 billion. The stock has lagged far behind rivals this year, rising 12.8% compared with AI darling Nvidia's 30% gain and AMD's 34%. Intel trades at a 12-month forward price-to-earnings ratio of 42.55 versus 33.90 for Nvidia and 32.12 for AMD. Since taking the helm in March, Tan has divested businesses, laid off employees and redirected resources as part of his strategic reset to revive the embattled chipmaker. "There are no more blank checks," he wrote in a memo to employees on Thursday. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Intel's foundry future depends on securing a customer for next-gen chipmaking tech
By Max A. Cherney and Stephen Nellis SAN FRANCISCO (Reuters) -Intel warned investors on Thursday that it may have to get out of the chip manufacturing business if it does not land external customers to make chips in its factories. New CEO Lip-Bu Tan said on Thursday the company's engineers were busy working with customers to jump-start its next-generation contract manufacturing process, or foundry, as the company announced big layoffs alongside a wider-than-expected third-quarter loss outlook. Those customers for the company's so-called 14A manufacturing process are crucial to the success of the technology - so much so that if it fails to secure a big one, it could shut down its cutting-edge manufacturing business altogether, according to Intel's quarterly filing on Thursday. The possibility that Intel could drop out of the cutting-edge manufacturing business would be a historic shift for a company that has described itself as a steward of Moore's Law - an observation by Intel co-founder Gordon Moore about the fast rate of development of the chip industry that held true for decades. Intel is the only U.S. chipmaker capable of making advanced computing chips. Intel has struggled for years due to management missteps, missing out on the AI race and losing market share to its longtime rival AMD. Former CEO Patrick Gelsinger poured money into Intel's foundry business, aiming to compete with chip manufacturing giant TSMC. Tan, who has already taken steps to right the ship, said on a post-earnings call on Thursday that he was personally reviewing all chip designs and investments. "We're developing Intel 14A ... from the ground up in close partnership with large external customers," Tan said in a memo released with the results. "Going forward, our investment in Intel 14A will be based on confirmed customer commitments. "We will build what our customers need, when they need it, and earn their trust through consistent execution." Intel said that without a significant customer, it would consider cancelling or pausing development of 14A and subsequent technologies. Should the company take the step, it planned to continue to manufacture chips with its 18A technology and a variant through 2030, according to the filing. In a post-earnings conference call, Tan said on Thursday that he is focused on working with customers to ensure 14A is a success and that tight collaboration with external customers is something that was absent from the company's 18A, which is set to go into high-volume production later this year. Tan said bringing those prospective customers in and gaining their feedback during 14A's development has already made it more promising than 18A. "That gave me a lot more confidence that this time, we have customers (that) are engaging early enough in the inception" of 14A, Tan said. "We learn from our mistakes, and we can learn quicker and then get a better result." The consequences of a decision to halt internal manufacturing would be significant for Intel, the filing said. It would mean that over time, Intel would become dependent on Taiwan's TSMC for contract manufacturing, or foundry, services. Doing so would also put it at a competitive disadvantage to competitors such as AMD, which has longer relationships and experience working with TSMC. Intel had roughly $100 billion of chipmaking equipment as of June 28. If the company halted its 14A manufacturing line, the company expects "significant material impairments" related to the company's foundry assets, the company's filing said.
CTV News
5 days ago
- Business
- CTV News
Intel slumps as potential foundry exit deepens investor gloom
Intel shares sank eight per cent on Friday after the company warned of exiting chip manufacturing if it fails to secure a major customer, a potentially drastic move by the new CEO to cut spending and revive the struggling American icon. Lip-Bu Tan said on Thursday he would further shrink Intel's workforce, halt work on two plants in Europe and slow another in Ohio, binning his ousted predecessor's strategy that relied on building costly facilities to restore its manufacturing edge. The plan for such extreme measures follows a surprise second-quarter adjusted loss and a forecast for a bigger-than-expected loss in the third quarter. The weakening financials pointed to more trouble for Intel after years of mismanagement eroded its PC and datacenter market share and left it with almost no presence in the AI market. The disclosures 'revive long-unanswered questions on the chances of success for its foundry business the path forward is if Intel does not develop leading edge manufacturing capability,' TD Cowen analyst Joshua Buchalter said. 'It's hard to understate the significance of this potential outcome in the context of the history of the semiconductor industry.' As part of its new strategy, Intel may reserve the advanced 18A manufacturing process for its products and proceed with its next-generation 14A only if it lands a major external customer commits, Tan told analysts on the post-earnings call. The move could put US$100 billion in assets at risk and deepen its dependence on rival TSMC, adding strain to margins already running at about half their historical highs. 'Intel Foundry is a big story and currently people are questioning how successful 18A is. A failure in 18A will be a broken story,' said Hendi Susanto, portfolio manager at Gabelli Funds. Intel was set to lose nearly $8 billion in market value, if current losses hold. Its current valuation of around $100 billion is less than half of Advanced Micro Devices' AMD.O more than $260 billion. The stock has lagged far behind rivals this year, rising 12.8 per cent compared with AI darling Nvidia's 30 per cent gain and AMD's 34 per cent. Intel trades at a 12-month forward price-to-earnings ratio of 42.55 versus 33.90 for Nvidia and 32.12 for AMD. Since taking the helm in March, Tan has divested businesses, laid off employees and redirected resources as part of his strategic reset to revive the embattled chipmaker. 'There are no more blank checks,' he wrote in a memo to employees on Thursday. (Reporting by Rashika Singh and Arsheeya Bajwa in Bengaluru, Samuel Indyk in London; Editing by Amanda Cooper, Vijay Kishore and Arun Koyyur)
Reuters
5 days ago
- Business
- Reuters
Intel slumps as potential foundry exit deepens investor gloom
July 25 (Reuters) - Intel shares (INTC.O), opens new tab sank 8% on Friday after the company warned of exiting chip manufacturing if it fails to secure a major customer, a potentially drastic move by the new CEO to cut spending and revive the struggling American icon. Lip-Bu Tan said on Thursday he would further shrink Intel's workforce, halt work on two plants in Europe and slow another in Ohio, binning his ousted predecessor's strategy that relied on building costly facilities to restore its manufacturing edge. The plan for such extreme measures follows a surprise second-quarter adjusted loss and a forecast for a bigger-than-expected loss in the third quarter. The weakening financials pointed to more trouble for Intel after years of mismanagement eroded its PC and datacenter market share and left it with almost no presence in the AI market. The disclosures "revive long-unanswered questions on the chances of success for its foundry business the path forward is if Intel does not develop leading edge manufacturing capability," TD Cowen analyst Joshua Buchalter said. "It's hard to understate the significance of this potential outcome in the context of the history of the semiconductor industry." As part of its new strategy, Intel may reserve the advanced 18A manufacturing process for its products and proceed with its next-generation 14A only if it lands a major external customer commits, Tan told analysts on the post-earnings call. The move could put $100 billion in assets at risk and deepen its dependence on rival TSMC ( opens new tab, adding strain to margins already running at about half their historical highs. "Intel Foundry is a big story and currently people are questioning how successful 18A is. A failure in 18A will be a broken story," said Hendi Susanto, portfolio manager at Gabelli Funds. Intel was set to lose nearly $8 billion in market value, if current losses hold. Its current valuation of around $100 billion is less than half of Advanced Micro Devices' (AMD.O), opens new tab more than $260 billion. The stock has lagged far behind rivals this year, rising 12.8% compared with AI darling Nvidia's (NVDA.O), opens new tab 30% gain and AMD's 34%. Intel trades at a 12-month forward price-to-earnings ratio of 42.55 versus 33.90 for Nvidia and 32.12 for AMD. Since taking the helm in March, Tan has divested businesses, laid off employees and redirected resources as part of his strategic reset to revive the embattled chipmaker. "There are no more blank checks," he wrote in a memo to employees on Thursday.
