Intel Corp_ Logo by mobile phone under Piotr Swat via Shutterstock
Intel (INTC), once the Titan of semiconductor production, has experienced many transformations in recent years. From the fall for competitors such as Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing Company (TSM), starting with ambitious foundry business, the company has seen many ups and downs.
Now that Intel is retreating from its aggressive click of the 18A foundry and focusing on its next generation 14a node, the question arises whether this is another false or strategic return restoration.
Although Intel shares have so far increased by 12.3%, they have fallen by almost 40% compared to the highest-37.16 USD, indicating potential purchase. Let’s see if there is a good time to invest or sit down.
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By ReutersThe newly appointed CEO of Intel, Lip -u Tan, is preparing a new course for the company’s troubled contracts. According to the report, Tan thinks about the transition from the 18A production process to the newer generation process known as 14A.
According to the report, the 14A process is a more mature node with higher economy and is expected to be competitive by 2026. The end of the end. This solution can lead to a write -off worth hundreds of millions of dollars. According to sources, the Board of Intel Directors can start discussing this month about potentially suspending 18A external advertising. However, due to the complexity of the financial and strategic decision, the final judgment may not be issued later this year.
Intel, while refusing to comment on this issue directly, has reiterated in the statement that it is still committed to strengthening her plan, restoring customer confidence and improving its financial health. The transition from 18A to 14A is formalized as a strategic step up TSMC – the dominant force in global chips production. On the contrary, Intel believes that the 14A process, which is still being developed, will give it the advantage of performance and efficiency over the upcoming TSMC N2 technology, so Intel Foundry Business will be more attractive to industrial heavyweights such as Apple (AAPL) and NVDia (NVDA), which are very relying on SMC.
The report also states that the company must fulfill existing obligations such as limited Amazon (Amzn) and Microsoft (MSFT) chips using the 18A process. In addition, Intel is still planning to use 18A for internal chips. During the Q1 profit call, the management stated that the Panther Lake, which would be built in the Intel inner 18A knot, is expected to send its first Sku by the end of the year. – Wider commercial accessibility.
Intel reported that the first quarter revenue $ 12.7 billion, which was the same per year. The adjusted profit per share has fallen to $ 0.13 from $ 0.18 last year. Intel Data Center and AI Segment (DCAI) reported better results than expected than expected in the demand for several hypercales than expected. However, the company expects the Q2 to be weaker consistently due to the one -off traction of customers and the constant normalization of macroeconomic uncertainty.
Intel Foundry Services (IFS) remains a long -term strategic bet and management has reiterated that progress will be gradual. CEO Lip -u Tan described the process of creating an internal foundry as “step by step”, emphasizing that it is important to first build an inner confidence in Intel product groups.
The Tan’s management is still at an early stage, but it has already begun to rearrange the company’s internal structure. This slimmer organization increases the cost reduction.
Intel plans to significantly reduce operating costs over the next two years to save about $ 17 billion in 2025. And $ 16 billion in 2026. A complete transition from 18A sales foundry to customers would be the boldest step in his career so far. This is the estimated risk. By focusing on a more complex process, Intel hopes to restore its reliability in the foundry industry and himself as a serious TSMC competitor.
Whether that excitement pays off, it depends not only on the successful installation of 14A, but also on the opportunities for Intel to present and restore confidence with the main customers. Intel will report its second quarter revenue on July 24th. We will find out more about it. Analysts expect the company to announce $ 11.88 billion revenue, 7.4% will decrease by a year, and the revenue of $ 0.01 per share was adjusted compared to $ 0.02 per share in 2024. March Analysts predict that 5.1% of revenue will be reduced to $ 50.4 billion.
Despite these constant efforts, the company continues to recover from a difficult period. 2024. Intel suffered a staggering loss – its first unprofitable year since 1986. It is now hoped that the company will report that in 2025 Would lose $ 0.30 per share. It is expected that 2026 Income will increase by 153% to $ 0.16 per share.
Morgan Stanley analyst Joseph Moore supports a “detention” rating showing that Intel’s turn will take time and will probably be gradual. M. Can positively focus the company’s attention, it remains careful and set the price of $ 23.
All in all, Wall Street appreciates Hold. Of the 38 analysts covering the shares, they make it a “strong purchase”, 32 values ”detention” and five “strongly sold”. The shares are trading almost the average target price of $ 22.42. However, the estimation of $ 62 street indicates that in the next 12 months, stocks have 182% potential.
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On the day of the publication, Sushree Mohanty had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are only for information purposes. This article was originally published in barchart.com
