Triumph Or Disaster

Next year is the year that it plans to regain industry process leadership but this year the USA’s  most influential  chip industry financial analyst Stacy Rasgon says that Intel’s issues are “approaching the existential”.

The shares are down from 60 to 20; it made a $1.6 billion loss last quarter; it’s attempt to set up a foundry business is taking time and it has another faulty processor situation on its hands.

But Intel says it has $20 billion of foundry business lined up; it is spending $25-27 billion on capex this year; it has revenue of around $13 billion a quarter, and 18A – the process with which it aims to regain industry leadership – is looking good.

18A, with GAA transistors and backside power delivery, has delivered two commercial processors which, says Intel, “are out of the fab and have powered-on and booted operating systems” – a result that came “less than two quarters after tape-out” – with both chips “on track to start production in 2025.”

We don’t know about yield and volumes but so far so good. In the foundry business, Intel says a “first external customer is expected to tape out on Intel 18A in the first half of next year.”

Lubricating the wheels are $8.5 billion in Chips Act grants, a 25% tax credit on capital investments and  an additional $11 billion in loans.

If this all comes good, and when the Yanks put their minds to a big project like this then it usually does come good, then Intel will have the industry’s Crown Jewels. 

If not, well the irony could be that the shares will soar because it can go back to being a trailing-edge cash cow