Intel hopes to invest as much as $100 billion to build eight factories on the 1,000-acre site over a decade. That would make Ohio one of the world’s biggest chip production sites.
Critics have questioned whether Intel can catch up to T.S.M.C. and Samsung in manufacturing technology, while others have been skeptical of the foundry plan. Some big chip makers would be reluctant to pay a competitor for such manufacturing services, they said.
And while T.S.M.C. offers production processes that are tweaked to make many kinds of chips, Intel is known for rigidly standardizing its manufacturing to make microprocessors.
If Intel succeeds in its plans eventually it would be a good long-term hold for a conservative investor like me. TMF just posted an article calling INTC a “screaming buy.”
If Intel succeeds in its plans eventually it would be a good long-term hold for a conservative investor like me. TMF just posted an article calling INTC a “screaming buy.” Crystal ball? Opinion based on actual knowledge?
Wendy,
Hopefully, Steve saw your post. I would trust his analysis of almost any individual stock - especially “conservative” picks.
I hold some INTC in one of my core ETFs, the First Trust NASDAQ Technology Dividend Index Fund (TDIV)
Intel is one of its top 10 holdings, representing 7.67% of the fund’s total assets, as the below data from Yahoo finance indicates:
Name Symbol % Assets Apple Inc AAPL 8.58% Microsoft Corp MSFT 8.47% International Business Machines Corp IBM 7.96% Broadcom Inc AVGO 7.88% Intel Corp INTC 7.67% Qualcomm Inc QCOM 4.15% Texas Instruments Inc TXN 3.96% Oracle Corp ORCL 3.86% Analog Devices Inc ADI 2.43% HP Inc HPQ 2.35%
If you decide to take a position in TDIV, please note that it generally moves in the same direction as the Nasdaq index, but that TDIV has outperformed INTC over the last 6 months and 1 year periods. I generally try to avoid purchasing anything that doesn’t pay a dividend, which limits my universe of possible Nasdaq holdings in this exchange-traded dividend index fund.
One thing that the Game of Thrones got right: when you are the King, everyone tries to take you down.
Intel was the king of the semiconductor industry for decades. They were unmatched in CPU design, FAB process technology and consumer product marketing by a component product. But when you are on top there is only one place to go … down.
Even Intel’s own design teams couldn’t build a better product than their x86 CPUs. They failed several times trying to build RISC chips (i960), VLIW chips (Itanium), ARM chips (Xscale) and acquired and internal failed GPUs (Real3D, Chips & Tech, Intel740, Timna, Larrabee, Knights Landing)
Intel’s famous “copy exactly” method for using the exact same FAB equipment & recipe to make all their chips worked great until they failed to have the latest process technology to copy. https://en.wikichip.org/wiki/intel/copy_exactly!
TSMC was founded to make chips for all the companies too small to own their own FABs (in the 1980s) and has now leap frogged Intel in transistor process technology in the past couple of years.
Apple uses the latest tech from TSMC for iPhones long after Intel declined Apple’s request to make iPhone CPUs. Now Apple makes their own CPUs for their Mac computers and iPhones/iPads. Intel failed to get any sizeable phone design wins and canceled that.
Nvidia has dominated in GPUs and overtook Intel in market cap recently.
AMD’s laptops, desktops and servers have been taking market share for years.
Many of the big cloud server companies are making their own chips now (AWS Graviton)
The days of Wintel dominating are over, now that we have phones, tablets, IOT, AI, cloud computing with SaaS, Chromebooks to go along with desktops and laptops.
OTOH, Intel’s gross margins have shrunk to the lowest level since the 2008-09 recession, so maybe they have no place to go but up, along with their 7th or 8th try at a GPU.
I hope that when their Ohio Fab opens (in 2025 or 2026?) they get lots of business for the sake of US manufacturing after spending $100B(??)
All that is fine, unless China goes after Taiwan for real. I think that is the real worry behind Intel’s plans.
Even a diplomatic solution that gives China more control over Taiwan could lead to real problems in the future. I’m glad someone is building fabrication plants here.
The thing is that Tesla is not just an automaker. It’s a cornerstone in the energy transition from fossil fuels to renewables and the core technology is not cars but batteries. Tesla is also a cornerstone in the transition to GAI (General AI), teaching robots to live in a homo sapiens dominated world.
To top it off, Musk is a rare entrepreneur willing and able to buck politics and conventional wisdom. If he weren’t so successful he would have fewer enemies/detractors. As an ex-management consultant I find his management style to be brilliant.
The Captain
should be thanking Putin for lowering the cost of ownership, down another 5.5% pre-market
The thing is that Tesla is not just an automaker. It’s a cornerstone in the energy transition from fossil fuels to renewables and the core technology is not cars but batteries. Tesla is also a cornerstone in the transition to GAI (General AI), teaching robots to live in a homo sapiens dominated world.
Oh, I agree. In fact, I think Musk is tiring of cars … he will probably leave Tesla pretty soon for his next big idea. But that doesn’t change the fact that much of what Tesla does is indeed very capital intensive.
should be thanking Putin for lowering the cost of ownership, down another 5.5% pre-market
BT[F]D cycles have been getting shorter and shorter recently, even hours or minutes now.
But that doesn’t change the fact that much of what Tesla does is indeed very capital intensive.
True but in 2021 despite funding two new Giga factories and several smaller venues plus paying down debt they were still cash flow positive. I like that kind of Capital Intensity.
Oh, I agree. In fact, I think Musk is tiring of cars
Next on the agenda, the Optimus Humanoid Robot to deal with all nasty, boring, and dangerous jobs.
BT[F]D cycles have been getting shorter and shorter recently, even hours or minutes now.
Over the past two days the market demonstrated how it reacts to uncertainty,
Wednesday: What is going to happen in Ukraine? NASDAQ -2.57% (Denny -5.4%)
Thursday: Russia invades Ukraine? NASDAQ +3.34% (Denny +6.7%)
Those are huge moves. Not everyone can handle this kind of volatility. Cathie Wood sold out Palantir a few days ago. Yesterday PLTR up 13.42%!
Hopefully you didn’t buy INTC back then…it has now fallen by about half since then.
Remember, no FAB-operating chip company has EVER fallen behind in the process technology for manufacturing chips and caught back up to ~parity with the leader(s).
Chip design companies (including those with FABs) have designed new chips that have leap frogged other chip designs. But Intel’s CPU designs are behind AMD and their nth attempt at a GPU is behind everyone and is nowhere to be found. They have lost all mindshare, momentum and market cap to Nvidia. And they will be delaying FAB construction…further delaying any ability to catch up to TSMC and Samsung as a foundry.
I hardly think Intel is a buy. More like a screaming sell.
The problem is Intel has lost it and now it wants it back? Do you think TSMC is going to lay down and let it? TSMC took the lead because the american chip players wanted to focused on design and ‘innovation’, and those have turned out to be higher value. Now they want to regain control that but some have not realized that manufacturing is not that easy, and it is going to take a much longer time than envisioned.
Also I think Intel has had a culture problem for a very long time now. They haven’t been able to execute for a long while now. Gelsinger doesn’t seem to have changed any of that despite making nice speeches.
