|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's range||1,970.00 - 1,980.00|
|52-week range||1,970.00 - 108,200.00|
|Beta (5Y monthly)||0.93|
|PE ratio (TTM)||12.62|
|Forward dividend & yield||N/A (N/A)|
|1y target est||1,753.00|
(Bloomberg) -- Intel Corp.’s new Chief Executive Officer Pat Gelsinger wants the company to regain its former glory as the world’s leading chip manufacturer and he says it’s a strategic priority for the U.S.That pits the industry veteran against investors and analysts who are hankering for quick results and think Intel’s bottom line takes precedence.“This is a national asset. This company needs to be healthy for the technology industry, for technology in America,” Gelsinger told analysts late Thursday after pledging to keep most of Intel’s semiconductor production in-house. “It’s an opportunity to help and to unquestionably put Intel and the United States in the technology leadership position.”The stock dropped 9% in New York Friday, its worst day since October, on concern a manufacturing turnaround will take years and cost billions of extra dollars. Some investors had advocated for Intel to outsource more production before Gelsinger revealed his hand.“Catching up is both a long shot and long journey,” Jefferies LLC analyst Mark Lipacis wrote in a note titled “U.S. Semi Manufacturing Crusade = No Quick Turnaround.”Intel will struggle to live up to Gelsinger’s assertion that the company can catch and pass Taiwan Semiconductor Manufacturing Co., the current leader in chip production. However, his rallying cry resonates more with other audiences and may bring Intel allies in the new administration of U.S. President Joe Biden.The chip industry is at the heart of a growing national rivalry between China and the U.S. China is the biggest consumer of semiconductors and the government there has vowed to spend more than $160 billion to create a domestic semiconductor sector. So far, though, it still relies heavily on U.S. chipmakers.That equation has become more complicated amid increasing scrutiny of the global technology supply chain. While many U.S. companies still design advanced chips, they have them made by TSMC in Taiwan.Intel is one of the few remaining chip companies that supply themselves with leading manufacturing. And it still makes many chips in the U.S., with factories in Oregon, Arizona and New Mexico. These components power computers that run or design government encrypted communication, nuclear power plants, military hardware and banking systems.If Intel outsourced production to TSMC -- as some on Wall Street want -- the U.S. would lose a major advanced manufacturing sector and hand more crucial know-how to Taiwan, a country China calls a rogue province that is only 100 miles off the coast of the mainland.Some U.S. lawmakers have begun listening to Intel and other U.S. chip industry players who have argued for years that incentives to keep manufacturing in the country just aren’t enough compared with what’s offered in China and other parts of the world.Last year, a bipartisan bill to provide $50 billion of incentives to build production in the U.S. was proposed. But to put that seemingly staggering amount of money into perspective, earlier this month TSMC said it’s planning to spend as much as $28 billion on new plants and equipment this year.Read more: Chip Industry Wants $50 Billion to Keep Manufacturing in U.S.“What we’ve heard from the U.S. government is, we need access to advanced microelectronics technology and manufacturing here in the U.S.,” Intel’s outgoing CEO Bob Swan told analysts late Thursday. “We need a safe and secure supply chain increasingly here in the U.S.”While improving its own manufacturing, Intel could develop a technology partnership with TSMC and other major operators of chip foundries. TSMC and Samsung Electronics Co. are either working on or considering new factories in the U.S.Read more: Samsung Mulls $10 Billion Texas Plant“This type of a partnership could also leverage new U.S. tax credits for onshore manufacturing for further value creation,” Timothy Arcuri, an analyst at UBS, wrote in a note to investors on Friday.Last year, Biden proposed a 10% “Made in America” tax credit covering projects such as increasing domestic production and retooling or expanding manufacturing facilities.Even U.S. government spending power won’t quickly fix Intel’s main problem: The sheer difficulty of making chips. The tiny squares of silicon are home to billions of tiny switches or transistors. Intel factories in Oregon, Arizona and New Mexico churn out millions of these semiconductors a month. But doing that reliably has become increasingly difficult and TSMC has forged ahead by gaining more experience as the biggest maker of smartphone chips.Semiconductors made using Intel’s latest production technology, called 7-nanometer, won’t arrive until 2023, executives said late Thursday. The TSMC equivalent has been used by Apple to mass produce chips for the iPhone for about a year already.“Even if Intel does successfully execute on 7-nanometer, they are still a node behind TSMC,” said Raymond James analyst Chris Caso. “And we don’t think Intel can deliver leadership products without leadership in transistors because it has never been done before. That keeps Intel behind the industry for four more years.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Samsung Electronics Co. is considering spending more than $10 billion building its most advanced logic chipmaking plant in the U.S., a major investment it hopes will win more American clients and help it catch up with industry leader Taiwan Semiconductor Manufacturing Co.The world’s largest memory chip and smartphone maker is in discussions to locate a facility in Austin, Texas, capable of fabricating chips as advanced as 3 nanometers in the future, people familiar with the matter said. Plans are preliminary and subject to change but for now the aim is to kick off construction this year, install major equipment from 2022, then begin operations as early as 2023, they said. While the investment amount could fluctuate, Samsung’s plans would mean upwards of $10 billion to bankroll the project, one of the people said.Samsung is taking advantage of a concerted U.S. government effort to counter China’s rising economic prowess and lure back home some of the advanced manufacturing that over the past decades has gravitated toward Asia. The hope is that such production bases in the U.S. will galvanize local businesses and support American industry and chip design. Intel Corp.’s troubles ramping up on technology and its potential reliance in the future on TSMC and Samsung for at least some of its chipmaking only underscored the extent to which Asian giants have forged ahead in recent years.The envisioned plant will be its first in the U.S. to use extreme ultraviolet lithography, the standard for next-generation silicon, the people said, asking not to be identified talking about internal deliberations. Asked about plans for a U.S. facility, Samsung said in an email no decision has yet been made.“If Samsung really wants to realize its goal to become the top chipmaker by 2030, it needs massive investment in the U.S. to catch up with TSMC,” said Greg Roh, senior vice president at HMC Securities. “TSMC is likely to keep making progress in process nodes to 3nm at its Arizona plant and Samsung may do the same. One challenging task is to secure EUV equipment now, when Hynix and Micron are also seeking to purchase the machines.”Read more: Intel Talks With TSMC, Samsung to Outsource Some Chip ProductionIf Samsung goes ahead, it would effectively go head-to-head on American soil with TSMC, which is on track to build its own $12 billion chip plant in Arizona by 2024. Samsung is trying to catch TSMC in the so-called foundry business of making chips for the world’s corporations -- a particularly pivotal capability given a deepening shortage of semiconductors in recent weeks.Under Samsung family scion Jay Y. Lee, the company has said it wants to be the biggest player in the $400 billion chip industry. It plans to invest $116 billion into its foundry and chip design businesses over the next decade, aiming to catch TSMC by offering chips made using 3-nanometer technology in 2022.It already dominates the market for memory chips and is trying to increase its presence in the more profitable market for logic devices, such as the processors that run smartphones and computers. It already counts Qualcomm Inc. and Nvidia Corp. as customers, companies that historically relied on TSMC exclusively. It has two EUV plants, one near its main chip site in Hwaseong, south of Seoul, and another coming online nearby at Pyeongtaek.To close a deal, Samsung may need time to negotiate potential incentives with U.S. President Joe Biden’s administration. The company has hired people in Washington D.C. to lobby on behalf of the deal and is ready to go ahead with the new administration in place, the people said. Tax benefits and subsidies will ease Samsung’s financial burden, but the company may go ahead even without major incentives, one of the people said.Samsung has been looking into overseas chipmaking for years. Intensifying trade tensions between the U.S. and China and now Covid-19 are stoking uncertainty over the reliability and economics of the global supply chain. Plants in the U.S. could help the Korean chipmaker strike better deals with key clients in the U.S., particularly in competition with TSMC.From Microsoft Corp. to Amazon.com Inc. and Google, the world’s largest cloud computing firms are increasingly designing their own silicon to power their vast data centers more efficiently. All need manufacturers like TSMC or Samsung to turn their blueprints into reality.Samsung’s U.S. branch purchased land in October next to its existing Austin fab, which is capable of running older processes. The Austin City Council held a meeting in December to discuss Samsung’s request to rezone that parcel of land for industrial development, according to meeting minutes.The Korean company’s existing Texas facility is too small to to meet increasing orders for outsourced chips coming from Qualcomm, Intel and Tesla, according to research by Citibank. Intel in particular is likely to funnel more orders toward Samsung to offset any reliance on TSMC for its foundry needs, the brokerage said in a report.Late Thursday, Intel’s incoming Chief Executive Officer Pat Gelsinger told investors he was likely to keep most production of the company’s best processors in-house and that the delayed introduction of new manufacturing technology was showing signs of improving. Still, his comments disappointed some investors who have been lobbying for more outsourcing by the world’s largest chipmaker. Intel shares dropped as much as 9% in New York trading Friday, the most since October. Rival Advanced Micro Devices Inc., which relies on TSMC for production, gained as much as 4.8%.Read more: Samsung Intensifies Chip Wars With Bet It Can Catch TSMC by 2022Some analysts question Samsung’s ability to carve out a significant share of a market dominated by TSMC, which is spending a record $28 billion this year to ensure it remains at the forefront of technology and capacity. For its part, Samsung’s semiconductor division spent $26 billion on capital expenditure in 2020, but that’s been largely in support of its dominant memory business and not all of its expertise in making memory is directly relevant to creating advanced logic chips.Processors are more complex to manufacture than memory and their production yields are harder to control and scale up in the same way. Foundry customers also require bespoke solutions, imposing another barrier to rapid expansion and also making Samsung dependent on customers’ designs. But the Korean giant can draw confidence from its work with Nvidia, whose chief executive officer has sung Samsung’s praises in collaborating on the manufacturing for its latest graphics card silicon.(Updates with Intel plans in 14th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Intel Corp. shares tumbled after the incoming chief executive officer pledged to regain the company’s lead in chip manufacturing, countering growing calls from some investors to shed that part of its business.“I am confident that the majority of our 2023 products will be manufactured internally,” Pat Gelsinger said on a conference call to discuss financial results. “At the same time, given the breadth of our portfolio, it’s likely that we will expand our use of external foundries for certain technologies and products.”He plans to provide more details after officially taking over the CEO role Feb. 15, however Gelsinger was clear that Intel is sticking with its once-mighty manufacturing operation.“We’re not just interested in closing gaps,” he told analysts on a conference call Thursday. “We’re interested in resuming that position as the unquestioned leader in process technology.”Keeping production in-house may be bad for Intel because its manufacturing technology has fallen behind Taiwan Semiconductor Manufacturing Co., which makes chips for many of Intel’s rivals. If the U.S. company can’t catch up, its products will become less competitive and it could lose sales and market share.Intel shares fell 5.7%% at 9:36 a.m. in New York on Friday. They have declined about 6% over the last 12 months compared with a 16% increase in the S&P 500.Activist Dan Loeb has suggested the company consider spinning off its manufacturing business. Other investors have been waiting to see if Intel will outsource more production.“Where investors are going to be disappointed is that some were expecting some sort of larger announcement of a strategic partnership with TSMC,” said Edward Jones & Co. analyst Logan Purk.TSMC recently announced capital spending of as much as $28 billion for 2021 to maintain its lead. Purk said Intel would have to increase its own spending massively to try to catch the Asian company.TSMC dropped 3.6%, the most since March 23. Shares of some Intel suppliers also dropped, with Screen Holdings Co. down 3.7% and Tokyo Electron Ltd. declined 1.6%.Read More: Intel Probes Potential Unauthorized Access to Earnings ReportGelsinger is taking the reins of a company in the midst of its worst crisis in at least a decade. It has been the largest chipmaker for most of the past 30 years, dominating the $400 billion industry by making the best designs in its own cutting-edge factories. Most other U.S. chip companies shut or sold plants and tapped other firms to make the components. Intel held out, arguing that doing both improved each side of its operations and created better semiconductors.That strategy has crumbled in recent years as Intel struggled to introduce new production techniques on time. It is now lagging behind TSMC and Samsung Electronics Co., which make chips for Intel competitors, such as Advanced Micro Devices Inc., and big Intel customers including Amazon.com Inc. and Apple Inc.AMD shares rallied in extended trading while Gelsinger discussed his goal of improving Intel’s in-house manufacturing.Intel’s quarterly results, released before the market closed on Thursday, initially sent the shares higher. A hacker accessed sensitive information from Intel’s website, prompting the company to report the numbers earlier than planned.Revenue in the period ending in March will be about $17.5 billion, the Santa Clara, California-based company said. This excludes the memory chip division Intel is selling. Analysts were looking for $16.2 billion on average, according to data compiled by Bloomberg.Intel sees strong demand for laptops through the first half of the year, Chief Financial Officer George Davis said in an interview. Earnings in the second part of the year will partly depend on whether corporations increase spending on new hardware, he added.“The question is will we see support from enterprise,” he said. “They’ve been very quiet.”Intel’s personal computer chip division had revenue of $10.9 billion in the fourth quarter. Analysts expected $9.72 billion. Its higher-margin data center unit generated sales of $6.1 billion. Wall Street was looking for $5.37 billion.In Intel’s data center business, revenue from cloud service providers fell 15% from a year earlier. Enterprise and government sales slumped 25%. Volumes and average selling prices declined. Owners of large data centers are working their way through unused stockpiles of chips.In its PC business, Intel reported a 30% surge in laptop chip sales, even as average selling prices declined 15%.Fourth-quarter profit, excluding some items, was $1.52 a share on $20 billion of revenue, down 1% from a year earlier. Analysts had estimated $1.11 a share on revenue of $17.5 billion.Intel’s gross margin, the percentage of revenue remaining after deducting the cost of production, was 56.8%. This is a key indicator of the strength of its manufacturing and product pricing. Intel has historically delivered margins of about 60%.(Updates with shares in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.