Intel’s Road To Recovery
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Going To Need Strong Shoulders
by Alex King, CEO, Cestrian Capital Research, Inc
Intel’s mission, which it has seemingly accepted, is to carry the hopes and dreams of re-shoring the US semiconductor industry. If you listen to China hawks they will tell you that the US needs to and in fact is decoupling from China (ergo from Taiwan, which in this doctrine will fall to China sooner or later), meaning the priority move in semiconductor is to get the local US fabs working, at small feature sizes, at high yield, yesterday. This is not easy, as former CEO Pat Gelsinger found.
There has been some progress on this front of late.
The press release quoted above doesn’t talk about yield; right now yields (the % of working chips produced from any one wafer) are subpar, as commented upon by Intel itself, here. Progress in yields is necessary for progress in Intel cashflow margins and also for progress in Intel’s manufacturing plant actually being a viable alternative to TSMC, which today it is not.
That’s the reality of the situation; a good start but nowhere near there yet. The narrative, though, is good; NVDA investing, SoftBank investing, the U.S. Government investing, this all conveys a sort of confidence in future success, and that has been good for the stock.
Let’s take a look at the numbers, then the stock chart and where $INTC may be headed next.