Latest news with #foundry
Globe and Mail
5 days ago
- Business
- Globe and Mail
'…One Something of Volume…' Intel Stock (NASDAQ:INTC) Slips as it Looks for Customers
While we know that chip stock Intel (INTC) has been pushing, and pushing hard, to build a lot of new chips through its foundry operations, the problem is a matter of what to actually do with those chips when they are built. Intel is on the hunt for customers, and the search is proving a bit more difficult than expected. And Intel's shareholders are starting to get concerned, again, as shares slipped fractionally in Thursday afternoon's trading. Confident Investing Starts Here: Basically, noted The Futurum Group CEO Daniel Newman, Intel needs at least one major customer to get people to believe it has a future in the foundry front. 'One Nvidia (NVDA), one Qualcomm (QCOM), one Apple (AAPL), one something of volume that really shows this meaningful commitment to the fab to build significant volume would really change the whole narrative,' Newman noted. But perhaps worse for CEO Lip-Bu Tan, Newman noted, is that there are a lot of problems that were there before Tan's tenure, as the foundry business takes a lot of capital to start and has a long runway to success—we had heard earlier that Intel should break even on the foundry operations in 2027—and Intel itself faces fundamental challenges like a growing reliance on graphics processing unit (GPU) chips over central processing unit (CPU) chips, particularly in artificial intelligence (AI) applications. Thus, the call for one big customer to help validate the unit. A Loss of Face in AI Even as Intel faces concerns that it is irreparably behind in AI advances, it may have just proven as much. Reports noted that Intel lost a few of its executives to join a coalition of others that are setting up AI chip startups in India. A coalition of four went to Bengaluru to set up Agrani Labs, which is developing its own AI chips in-house, and working with Peak XV partners to land $8 million. But Intel is not exactly out of that fight; Intel's CEO, Lip-Bu Tan, actually put some cash into one such effort staged by former Texas Instruments (TXN) employees, Bodhi Computing. The rise of firms in that field, operating out of India, makes it clear that the AI chip market is one that is likely to grow substantially in short order. But the question that remains: will Intel ultimately be left behind? Is Intel a Buy, Hold or Sell? Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 32.53% loss in its share price over the past year, the average INTC price target of $21.29 per share implies 5.37% upside potential. See more INTC analyst ratings Disclosure Disclaimer & Disclosure Report an Issue
Globe and Mail
21-05-2025
- Business
- Globe and Mail
Intel Stock (NASDAQ:INTC) Slips as Intel Mulls Sale of Edge Computing and Networking Units
We know that chip stock Intel (INTC) has been suffering from a bit of a cash crunch since it put so much into setting up its foundry operations. We also know the foundry operations will not break even much before 2027, if at all. This combination of factors likely led to new reports that Intel is mulling a pretty big sale. Investors, though, were not exactly pleased, and sent shares slipping fractionally in Tuesday afternoon's trading. Confident Investing Starts Here: The latest reports from Reuters noted that Intel was mulling a sale of its network and edge businesses, both of these said to be part of the 'less than crucial' part of the business that new CEO Lip-Bu Tan has been previously seen as interested in divesting. But this does not mean more layoffs, the report noted, as the 'tens of thousands of employees' contained therein will be transferred into PC and data center chips, two of the new Intel's biggest operations. The report also noted that Intel has started the process of making the sale already, talking to 'third parties' that might be interested. However, this is still very early-stage stuff, as Intel has '…not yet launched a formal deal process for the NEX unit,' as it is known. Intel has also interviewed, but not yet hired, an investment banker to handle the deal itself. Actually, it has interviewed more than one, but the hire is still not made. A Lot of Little Makes One Big Further, we saw new word about a new strategy for Intel, as it looks to get a better foothold in the graphics processing unit (GPU) market. While most of that market is going to Nvidia (NVDA), Intel is looking to take Nvidia down by a death of a thousand cuts strategy. Essentially, Intel wants to offer cheap GPUs that can be used in tandem, allowing several of them to work together to provide similar power to the Nvidia line. Intel's Battlemage B60 card comes in at about $500 of the cost of a PC, though reports suggest the price might go higher when it goes live. That compares wonderfully to the $1,250 to $2,400 Nvidia's RTX 4000 Ada and 4500 Ada chips fall into, and even better against Nvidia's RTX Pro 6000, which comes in at $8,565. Thus, getting four or five B60s together will come in at a bargain against the 6000, and not be especially far off in terms of performance, reports note. Is Intel a Buy, Hold or Sell? Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 25 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 32.64% loss in its share price over the past year, the average INTC price target of $21.22 per share implies 0.24% downside risk. See more INTC analyst ratings Disclosure Disclaimer & Disclosure Report an Issue
CNA
13-05-2025
- Business
- CNA
Intel has limited customer commitments for latest chip manufacturing tech, CFO says
The volume of processors Intel is set to produce for external customers using its upcoming manufacturing technology is currently "not significant", finance chief David Zinsner said on Tuesday. Committed volumes, or the amount of external customers' chips set to be produced by Intel using upcoming manufacturing tech, is presently not significant, Zinsner said at J.P. Morgan's Global Technology, Media and Communications conference being held in Boston, Massachusetts. Santa Clara, California-based Intel is striving to become a contract manufacturer of chips, but has struggled to progress with its 18A and latest 14A chip manufacturing technologies. However, last month the company said several customers planned to build test chips for the forthcoming process. "We get test chips, and then some customers fall out of the test chips... So committed volume is not significant right now, for sure," Zinsner said. AI chip front-runner Nvidia and custom chipmaker Broadcom are running manufacturing tests with Intel, Reuters reported in March. The contract manufacturing unit, called foundry, is on track to break-even sometime in 2027 and would require external customers to generate low to mid-single digit billions in revenue to achieve that, Zinsner added. The foundry unit reported $4.7 billion in sales in the March quarter, up 7 per cent from the year-ago period. However, chips manufactured for the company's own products unit make up a large chunk of these sales. New CEO Lip-Bu Tan, who is tasked with undoing years of missteps at the chipmaker, has retained Intel's practice of manufacturing its own chips and attempting to produce processors for others. "It's a fair assessment that Lip-Bu isn't thinking about massive changes," Zinsner said during the call. So far, Tan has flattened the organization and centered his strategy around streamlining by divesting non-core assets like some of its Altera stake.
Reuters
13-05-2025
- Business
- Reuters
Intel has limited customer commitments for latest chip manufacturing tech, CFO says
May 13 (Reuters) - The volume of processors Intel (INTC.O), opens new tab is set to produce for external customers using its upcoming manufacturing technology is currently "not significant", finance chief David Zinsner said on Tuesday. Committed volumes, or the amount of external customers' chips set to be produced by Intel using upcoming manufacturing tech, is presently not significant, Zinsner said at J.P. Morgan's Global Technology, Media and Communications conference being held in Boston, Massachusetts. Santa Clara, California-based Intel is striving to become a contract manufacturer of chips, but has struggled to progress with its 18A and latest 14A chip manufacturing technologies. However, last month the company said several customers planned to build test chips for the forthcoming process. "We get test chips, and then some customers fall out of the test chips... So committed volume is not significant right now, for sure," Zinsner said. AI chip front-runner Nvidia (NVDA.O), opens new tab and custom chipmaker Broadcom (AVGO.O), opens new tab are running manufacturing tests with Intel, Reuters reported in March. The contract manufacturing unit, called foundry, is on track to break-even sometime in 2027 and would require external customers to generate low to mid-single digit billions in revenue to achieve that, Zinsner added. The foundry unit reported $4.7 billion in sales in the March quarter, up 7% from the year-ago period. However, chips manufactured for the company's own products unit make up a large chunk of these sales. New CEO Lip-Bu Tan, who is tasked with undoing years of missteps at the chipmaker, has retained Intel's practice of manufacturing its own chips and attempting to produce processors for others. "It's a fair assessment that Lip-Bu isn't thinking about massive changes," Zinsner said during the call. So far, Tan has flattened the organization and centered his strategy around streamlining by divesting non-core assets like some of its Altera stake.
Forbes
13-05-2025
- Business
- Forbes
18A Or Bust: Will Intel's Big Bet Pay Off?
Intel (NASDAQ:INTC) is placing significant emphasis on its foundry division. Over the last four years, the semiconductor giant invested about $95 billion in capital expenditures to redefine itself as a leading-edge foundry, with the goal of competing against TSMC and Samsung. Nonetheless, the stock has declined nearly 40% from its peak in 2024, as investors remain doubtful regarding these plans. The foundry sector suffered a loss of nearly $13 billion last year. However, improvements may be on the horizon, thanks to Intel's new process nodes, which are in advanced stages of rollout. What developments are occurring in the foundry sector? Intel relies on its 18A process, regarded as its most sophisticated manufacturing technology to date, featuring a 1.8-nanometer process node, to revitalize its foundry business. Intel indicates that this node is currently in risk production, where a limited number of chips are generated to evaluate and enhance the production process ahead of mass manufacturing, which is scheduled to commence later this year. Laptops utilizing 18A-based processors are already undergoing sampling with OEMs. The process develops chips utilizing technologies such as RibbonFET gate-all-around transistors and PowerVia backside power delivery, which enable the creation of smaller transistors that enhance performance and power efficiency. PowerVia may provide significant benefits in AI as well as high-performance computing applications. Overall, Intel's process node is marketed as being faster and consuming less power compared to TSMC's rival node, which is also anticipated to enter mass production around the same period. However, TSMC's chips may possess advantages in aspects of density and cost. Intel has also introduced a high-performance variant designated 18A-P, for which it has initiated early wafer production at its facilities. The company is additionally developing an advanced iteration termed 18A-PT, which facilitates 3D stacking with hybrid bonding interconnects, allowing for vertical die stacking directly on top of its most advanced node. While competitor TSMC already has a comparable process in its output, 18A-PT could allow Intel to produce highly integrated chiplet designs with enhanced density and efficiency. During the recently concluded Intel Foundry Direct 2025 event, Intel verified that it was now collaborating with key clients for its 14A process (the 1.4nm equivalent), which is the successor to 18A. Test chips are being prepared for tape- out, and the node is set to incorporate an enhanced version of Intel's backside power delivery technology. Intel aims for risk production of the new process by 2027. TSMC's competing 1.4 nm-class node is projected to debut only in 2028. This could potentially provide Intel with a one-year lead, helping it attract more high-performance computing and AI chip clients. Intel appears to be at the forefront of the United States' initiative to reshore semiconductor fabrication. Currently, Intel stands as the sole U.S.-based foundry offering both leading-edge processes and advanced packaging. Although industry leader TSMC has been increasing its foundry capabilities in the U.S., a recent Taiwanese law prevents it from producing its most advanced chips abroad. This scenario positions Intel as the only domestic entity with leading-edge manufacturing capabilities. As chips become essential for a range of applications from AI to defense, they have been classified as a national security concern by the U.S. government. Given its extensive domestic chipmaking footprint, Intel could be exceptionally well-placed to leverage this trend. The fluctuation in INTC stock over the preceding four years has been highly inconsistent, with annual returns varying much more than the S&P 500. The stock saw returns of 6% in 2021, -47% in 2022, 95% in 2023, and -60% in 2024. The Trefis High Quality (HQ) Portfolio, which includes 30 stocks, exhibits significantly lower volatility. Additionally, it has consistently surpassed the S&P 500 over the past four years. What accounts for that? Generally, HQ Portfolio stocks have delivered superior returns with lower risk compared to the benchmark index; they offer a smoother investment experience, as shown in HQ Portfolio performance metrics. So, is now a good time to invest in Intel stock? Intel shares are currently trading at below 25x projected 2026 earnings, which represents a reasonable valuation. Admittedly, Intel's declining earnings in recent years, loss of market share to AMD in the PC and server sectors, and the broader transition from CPUs to GPUs in the AI era pose risks for the stock. Nonetheless, if the foundry sector performs well with its new 18A process and secures major clients, the stock could experience significant upside. We assess Intel stock at $25 per share, approximately 17% above the current market value. Refer to our examination of Intel's valuation for more insight into our price estimate for Intel.
