Yesterday was a bad day for Intel. As the company CEO, Bob Swan hinted at the possibility of outsourcing fabrication of upcoming processors to TSMC, Intel stocks dropped by a meaty 16% as analysts downgraded the company’s ratings. Amid this bloodbath, there were two key winners: rival AMD and its foundry partner, TSMC. Stocks of both firms soared by unprecedented amounts as investors ditched Intel.
As per Susquehanna analyst Chris Rolland, Team Blue has pretty much zero chances of regaining the process lead or even leveling with TSMC in the next five years. He believes Intel’s best bet would be to sell its foundries to TSMC, though that is unlikely to happen.
With the latest push out of process technology, we believe that Intel has zero-to-no chance of catching or surpassing TSMC at least for the next half-decade, if not ever.
Susquehanna analyst, Chris Rolland
A few analysts sang a different tune, claiming that Intel’s foundries have been the reason for its dominance in the processor market in the last half-century.
By outsourcing leading-edge technology, presumably to TSMC, Intel would give up what has been its main source of competitive advantage for 50 years
Caso, Raymond James
At the time of writing, AMD’s shares were up by 16.50% to $69.40, the highest they’ve been this century.
Meanwhile, Intel’s share value plummeted by the same percentage to $50.59, offsetting all gains over the last six months to pre-COVID-19 levels.
