Intel shares dip on apparent drop in manufacturing; rival chip stocks jump

By Noel Randewich

(Reuters) – Intel shares collapsed and rivals surged on Friday after the U.S. chipmaker signaled it could abandon manufacturing its own components after falling far behind in developing its new technology.

Intel plunged 15% after CEO Bob Swan told investors in a conference call Thursday night that Intel’s new 7-nanometer chip technology was six months behind and Intel could pay other manufacturers to produce its chip designs.

Designing and manufacturing its own personal computer and server chips have given Intel a lead over rivals for decades, and moving away from this model would strengthen little rival Advanced Micro Devices. , which jumped 15%.

“This, our 45th Intel earnings call, was the worst we’ve seen in our career spanning the company,” Bernstein analyst Stacy Rasgon wrote in a customer rating, reducing her Intel rating to “underperforming.” .

Frankly, none of the numbers matter. In fact, investors could have stopped reading the press release after the fourth line of the first page, which indicated that Intel was delaying its trajectory by 7nm with returns. a year behind on internal goals, ”Rasgon wrote.

U.S. stocks of Taiwan Semiconductor Manufacturing Co , the world’s largest contract chip maker, jumped 12%. Intel’s potential surrender in manufacturing means one less competitor for TSMC and one potential new customer.

Manufacturers of semiconductor manufacturing equipment KLA Corp , Applied Materials and the American shares of ASML Holding fell between 2% and 6% on expectations that Intel could build and modernize fewer factories.

Nvidia climbed 1.1%, taking its market cap to $ 252 billion and extending its lead as America’s most valuable chipmaker after eclipsing Intel earlier this month. After Friday’s plunge, Intel’s market value was $ 217 billion.

(Reporting by Noel Randewich; editing by David Gregorio)

Source link

About Perry Perrie

Perry Perrie

Check Also

Sports owners are borrowing at skyrocketing interest rates to survive the coronavirus pandemic

Justin Gaethje of the United States celebrates after beating Tony Ferguson of the United States …

Leave a Reply

Your email address will not be published. Required fields are marked *