Intel Corp INTC

On July 26, Intel held an event detailing its process and packaging technology roadmaps through 2025. While the chipmaker historically pioneered many semiconductor innovations (including FinFET transistors), Intel’s 10-nanometer process node delays have allowed foundry peers such as TSMC to capture process performance leadership. Beyond the detailed roadmap, Intel altered its process nomenclature to better align with industry naming. For Intel Foundry Services, or IFS, the firm announced Amazon Web Services and Qualcomm as future packaging and foundry customers, respectively. We think the process roadmap looks compelling as it includes annual performance increases, EUV lithography adoption for 2023 products, and a new transistor structure for 2024. That said, we think Intel faces considerable execution risk, while TSMC remains ahead with more EUV experience. This endeavor to regain process performance leadership by 2025 will be fraught with potential setbacks, but we do concede the shift from FinFET transistors to the next iteration (gate-all-around, GAA) could be an inflection point that allows Intel to revive its process competitiveness. We are maintaining our $65 fair value estimate for wide-moat Intel.