Intel’ troubles

Intel shares fell as much as 17 per cent yesterday after it said it had pushed back the planned launch of its next generation of chips by six months, throwing into doubt its efforts to regain the manufacturing edge it lost to TSMC. The US chipmaker also said it was considering contracting out more of its manufacturing to make up for the delays and ensure its products from 2023 onwards remain competitive. The greater reliance on other manufacturers for advanced technology — with TSMC a likely beneficiary — marked a rare adjustment by a company that long led the global industry in successive generations of chips, where features grow progressively smaller and more computing power is squeezed into a tinier space. It suffered several delays in moving to the current, 10 nanometre generation of chips, allowing TSMC to slip ahead. In a statement after the end of the trading day on Thursday, it warned that its next generation of products, using 7nm technology, “was shifting six months relative to our prior expectations”… Investors punished the stock when trading opened yesterday, pushing it down 17 per cent to below $50 for the first time since the depths of the coronavirus sell-off in the spring… Intel also issued financial guidance for the rest of this year that could lay to rest some of the concerns about a sharp fall-off in chip sales in the second half as the first wave of the coronavirus-induced buying passes. 

Richard Waters