https://www.nytimes.com/2022/01/21/technology/intel-chip-fac…
https://www.wsj.com/articles/intel-to-invest-at-least-20-bil…
**Intel to Invest at Least $20 Billion in Ohio Chip-Making Facility**
**Company will make cutting-edge processors at new site near Columbus, creating around 3,000 permanent jobs**
**by Meghan Bobrowski, The Wall Street Journal, 1/21/2022**
**...**
**A combination of strong demand that industry officials expect to persist, the chip drought and governments’ willingness to offer subsidies to land semiconductor-production plants has triggered an investment spree among companies. Last year, Samsung said it would spend more than $205 billion over the next three years, with chip-making a priority, and unveiled a $17 billion investment in Taylor, Texas. Taiwan Semiconductor Manufacturing Co. , the world’s biggest contract chip maker, has said it would spend a record $100 billion over the next three years to increase production capacity. Other chip companies, such as memory-chip maker Micron Technology Inc. and Texas Instruments Inc., have also detailed fresh investment plans....**
**Last year, the U.S. Senate approved $52 billion in funding to support semiconductor research and production, though the legislation still needs to make its way through the House. ...** [end quote]
Construction of the first two factories is expected to begin later this year with production to start by 2025, Intel said. The site is more than 1,000 acres — enough space to hold up to eight total factories and related operations.
https://www.google.com/search?client=firefox-b-1-d&q=int…
Intel has a P/E ratio of 10 and a dividend yield of 2.65%. This dividend is highly sustainable since it’s only 26% of trailing 12-month earnings. INTC has been volatile over the past 2 years. Right now, it’s near a low point. Starmine rates it bullish, 8.1. SP Global rates it undervalued and high-quality. Unfortunately, I bought INTC at one of the peaks. If I didn’t already own as much as I wanted I would buy now.
https://www.google.com/search?client=firefox-b-1-d&q=sam…
Samsung has a P/E ratio of 14 and a dividend yield of 4%. Samsung is listed on the Korean stock exchange, not a U.S. exchange.
https://www.nerdwallet.com/article/investing/how-to-buy-sams…
https://www.google.com/search?client=firefox-b-1-d&q=tsm…
TSMC has a P/E ratio of 30 and a dividend yield of 1.5%. TSMC makes some of the world’s most sophisticated chips, which INTC isn’t able to make. But TSMC is under the shadow of China’s designs to take of Taiwan.
My concern from the article is that all the majors are building new capacity at the same time. This could lead to oversupply in a few years, depressing the price of the chips at a time when the expensive new fabs need to be paid for. This has happened before.
Wendy