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Intel Corp INTC

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

What’s in a Name? That Which We Call a Node; Aggressive Intel Roadmap Not Without Execution Risk

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

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.

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Company Profile

Business Description

Intel is the world's largest chipmaker. It designs and manufactures microprocessors for the global personal computer and data center markets. Intel pioneered the x86 architecture for microprocessors. It was the prime proponent of Moore's law for advances in semiconductor manufacturing, though the firm has recently faced manufacturing delays. While Intel's server processor business has benefited from the shift to the cloud, the firm has also been expanding into new adjacencies as the personal computer market has stagnated. These include areas such as the Internet of Things, artificial intelligence, and automotive. Intel has been active on the merger and acquisitions front, acquiring Altera, Mobileye, and Habana Labs in order to bolster these efforts in non-PC arenas.

Contact
2200 Mission College Boulevard
Santa Clara, CA, 95054-1549
T +1 408 765-8080
Sector Technology
Industry Semiconductors
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 26, 2021
Stock Type Cyclical
Employees 110,600

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