Latest news with #foundry
Forbes
11 hours ago
- Business
- Forbes
The 2nm Race: Intel's 18A Faces Uphill Task Against TSMC
CANADA - 2025/05/26: In this photo illustration, the Intel Corporation logo is seen displayed on a ... More smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images) Intel (NASDAQ:INTC) has been fully committed to transforming itself into a global foundry leader, especially as the competition for next-generation 2-nanometer (nm) chips intensifies with its 18A process at the heart of its strategy. Over the last four years, the company has poured more than $90 billion into capital expenditures aimed at expanding its foundry operations and narrowing the gap with TSMC and Samsung. The stakes are considerable. The foundry segment suffered losses of nearly $13 billion last year, and Intel's shares have decreased by nearly 50% since their peak in 2024. So, how does Intel's new technology compare with that of its rivals? In the realm of chip manufacturing, 'nm' indicates the size of the process node in nanometers. Generally, smaller nodes allow for an increased number of transistors to be integrated into a designated area, leading to enhanced performance, improved energy efficiency, and the ability to accommodate more intricate designs. This is particularly crucial for high-performance applications such as AI, smartphones, and advanced server tasks. However, transitioning to smaller nodes is a costly and complicated endeavor. Initial yield rates are often lower, and the investment required to construct and equip fabrication facilities for such advanced production is substantial. Intel is optimistic that its new 18A process, which employs 1.8nm technology, is presently in risk production. Here, initial batches are utilized to evaluate and enhance the manufacturing process before mass production begins. Laptops utilizing 18A-based processors are already being sampled with original equipment manufacturers (OEMs). This process creates chips employing technologies like RibbonFET gate-all-around transistors and PowerVia backside power delivery. These innovations permit the creation of smaller transistors that enhance performance and energy efficiency. PowerVia could provide significant benefits for AI applications as well as high-performance computing tasks. The rollout of Intel's 18A is occurring just as its competitors are gaining momentum. TSMC, the leading player in the foundry market, commands over two-thirds of the overall foundry space and is expected to retain its lead in the 2nm generation by a considerable margin. TSMC plans to commence mass production of its 2nm process in the latter half of 2025 at its fabrication facilities in Taiwan. TSMC's 2nm process represents its first incorporation of gate-all-around (GAA) transistor architecture, which promises a 10% to 15% enhancement in performance and up to 30% reduction in power usage in comparison to its 3nm node. Furthermore, TSMC has demonstrated exceptional manufacturing prowess. As reported by the Taiwan Economic Daily, current yields for the 2nm process are at 60%, indicating that out of every 100 dies sliced from a silicon wafer, 60 meet quality control standards. That's a remarkable statistic. Some reports from March estimated that Intel was only achieving yields of between 20% to 30% on its 18A process, while Samsung was reportedly achieving 40% yields on its rivaling technology. TSMC's customer base is also extensive and loyal, featuring major clients like Apple and AMD that have already committed to utilizing its 2nm process. Even Intel is diversifying its strategy, engaging TSMC as an alternative source for some of its forthcoming Nova Lake desktop processors, anticipated in 2026. Counterpoint Research projects that TSMC may achieve full utilization of its 2nm capacity by the fourth quarter of 2025. Now, Intel asserts that the 18A process will provide improved performance and reduced power usage compared to TSMC's competing node. Nonetheless, TSMC's chips are likely to maintain an edge in terms of density and cost. Compounding Intel's difficulties, the company has experienced ongoing delays in introducing new nodes, and its 18A process has already witnessed some external clients withdraw after initial trial production, resulting in demand that fell short of expectations. Meanwhile, TSMC possesses the scale, ecosystem, and a broad array of loyal customers who are ready to embrace its 2nm technology, potentially complicating matters for Intel. Not only has Intel's stock performed poorly, but its annual returns have also been significantly more volatile than those of the S&P 500. The stock's returns were 6% in 2021, -47% in 2022, 95% in 2023, and -60% in 2024. In contrast, Trefis High Quality (HQ) Portfolio, which includes 30 stocks, shows much lower volatility. It has significantly outperformed the S&P 500 over the past 4 years. What accounts for this? As a collective, HQ Portfolio stocks have delivered better returns with reduced risk compared to the benchmark index; a more stable experience, as reflected in HQ Portfolio performance metrics.
Yahoo
2 days ago
- Business
- Yahoo
Is INTC Stock a Buy Now as Intel Prepares for Another Round of Mass Layoffs?
Intel (INTC) is reportedly considering laying off between 15% and 20% of its foundry workers, which could impact thousands of employees. The layoffs come after a brutal 2024 when the once-iconic chip company eliminated 15,000 positions in its biggest-ever layoff. While we don't have the official confirmation, the layoffs would be hardly surprising given the company's focus on cost cuts amid mounting losses and cash burn, particularly in the foundry business, which has failed to take off significantly despite burning billions of dollars. In this article, we'll discuss Intel's outlook in light of the cost cuts and turnaround efforts. Trump Is Giving Tesla's Robotaxis a Leg Up Ahead of June 22. Should You Buy TSLA Stock Now? Dear Nvidia Stock Fans, Mark Your Calendars for July 16 The Trump Family Is Betting Big on Mobile Phones. Should Apple Stock Investors Be Worried? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Intel is currently in its second inning of a turnaround under new CEO Lip-Bu Tan, who took over earlier this year. Notably, when his predecessor Pat Gelsinger took office in 2021, he also embarked upon 'transforming' Intel under the IDM 2.0 strategy, which, in hindsight, we know did not go as planned. Intel continues to lose market share and is majorly losing out to Nvidia (NVDA) in the artificial intelligence (AI) chip market. The pivot to the foundry business, where Intel makes chips for third parties under contract manufacturing, also failed to get traction while that segment's losses mounted. Tan has spoken about building a 'new Intel' and has stressed that there are no 'quick fixes' to the company's woes. He admitted that the company lost out on talent and has talked about the need to revamp the company's culture by fostering a 'startup' mindset. Sell-side analysts have been in a 'wait and see' mode when it comes to Intel, which is reflected in its ratings. Of the 38 analysts covering Intel, 32 rate it a 'Hold.' The stock is rated as a 'Strong Buy' by only one analyst while five rate it as a 'Strong Sell.' Intel's mean target price is $22.42, which is 7.8% higher than the June 17 closing price. Its Street-low target price is $14, implying downside of 32.7%. Notably, while Intel has slumped over 70% from its 2021 highs, it does not necessarily mean that the stock is undervalued, as the price action is not too out of sync with its financial performance. For instance, last year it posted revenues of $54.2 billion with an adjusted gross margin of 36% and adjusted net loss of $600 million. In contrast, in fiscal year 2021, it posted revenues of $79 billion with a healthy adjusted gross margin of 57.7% and adjusted net income of $22.4 billion. The company's cash flows have also fallen prey to the burgeoning losses and capex in the foundry business, and it has posted negative free cash flows for three consecutive years. The result has been a steep rise in its leverage ratios, and the company's long-term debt soared to $46.2 billion at the end of 2024, an increase of almost $13 billion since the end of 2021. Credit rating agencies have also taken note of its weak financial condition, and last year, Moody's and S&P Global cut Intel's credit rating. Intel remains a turnaround play and could see a rerating if Tan can steer the long-awaited turnaround. Talking about valuations, given its current depressed earnings, it won't be prudent to look at earnings-based valuation multiples. The stock trades at a forward enterprise value-to-sales multiple of 2.53x, which is slightly higher than the last three years' average. Meanwhile, INTC trades at just 0.83x its book value, which might look quite tempting as a ratio below 1x is a sign of undervaluation. Previously, there have been reports of various companies being interested in buying Intel's foundry business, but none of these have come to fruition. I believe there is potential for value unlocking for Intel shareholders as the company explores its options under the new CEO, who has floated the possibility of spinning off non-core businesses. For now, though, the layoffs should help Intel cut down its costs and help uplift its margins that have plummeted over the last couple of years. However, Intel needs to return to top-line growth sooner rather than later, which is easier said than done as it faces intense competition from the likes of Advanced Micro Devices (AMD) in the PC chip market and Nvidia in the AI GPU market. Intel's foundry business could help revive growth as hyperscalers are developing their custom chips and need partners with foundries to manufacture these. However, Intel would need to compete with the formidable Taiwan Semiconductor Manufacturing Company (TSM), which is setting up new plants in the U.S. Overall, Intel remains a 'show me story' trading at a fair valuation, and the ball lies in the company's court. It needs to display some solid execution and strategic actions to drive shareholder value. On the date of publication, Mohit Oberoi had a position in: INTC, NVDA. All information and data in this article is solely for informational purposes. This article was originally published on Sign in to access your portfolio
Yahoo
3 days ago
- Business
- Yahoo
Is Intel Stock a Buy or Sell?
Intel is struggling in its core CPU markets, and its foundry effort has yet to pay off. However, a new CEO is refocusing and streamlining the company. Intel's manufacturing technology has advanced in the past few years, setting the stage for a successful turnaround. 10 stocks we like better than Intel › Semiconductor giant Intel (NASDAQ: INTC), once overwhelmingly dominant in its core central processing unit (CPU) markets, is scrambling to turn itself around. Market-share losses, missed opportunities in artificial intelligence (AI), and an expensive bet on becoming a foundry have all been weighing on the stock. While there are certainly legitimate reasons to sell, Intel stock still looks like a solid buy for long-term investors with plenty of patience. Intel fell into a common trap for companies that dominate their core markets -- complacency. Prior to AMD's renaissance, which began around 2017 with the first iteration of its Zen-based CPUs, Intel faced little competition from its rival. Back in 2017, Intel's desktop PC CPU market share was nearly 90%, and its server CPU market share topped 98%. The company appeared untouchable, and its in-house manufacturing gave it an important edge. Fast forward to today, and Intel's dominance has clearly deteriorated. While Intel remains the market-share leader, as of mid-2024, its share of the desktop CPU market had fallen below 80%, and its share of the server CPU market was around 75%. AMD now has great products available in both markets, putting pressure on Intel's core business. Intel's manufacturing technology fell woefully behind TSMC, which AMD uses to make its chips. Compounding Intel's problems are a weak PC market coming out of the pandemic-era boom and a hard shift in data center spending toward AI accelerators. Intel attempted to battle Nvidia in the AI accelerator market with its Gaudi chips, but the company fell well short of its own targets and has largely abandoned the effort. Intel's annual revenue has tumbled from more than $75 billion a few years ago to around $53 billion, and profits have vanished. Given these developments, it's all too easy to write off Intel's ongoing turnaround efforts. Despite plenty of problems and headwinds plaguing Intel, there's still a lot to like about its long-term prospects. Under new CEO Lip-Bu Tan, Intel is set to get serious about reining in its costs with a planned layoff over the summer. Bringing its cost structure down to reflect its current market position is critical to getting the company back on its feet. In the products business, Tan plans to eliminate layers of middle management and put the focus back on engineering. In the foundry business, Tan will emphasize listening to customers and adapting as needed to bring in enough external customers to make the company's massive manufacturing investments pay off. The Intel 18A manufacturing process, which is now complete and set for volume production later this year, has the potential to be a big winner for the company. The process delivers significant performance and efficiency gains over Intel's previous processes, and it's the first process available that includes backside power delivery. Intel now must scale up the process and achieve acceptable yields. Intel 18A will be used for the company's upcoming Panther Lake PC chips, which could give it a key advantage over AMD. It has won some external customers for Intel 18A, but not nearly enough. Panther Lake could act as a proof of concept for potential customers that are on the fence about committing to Intel for manufacturing. With a new focus on engineering, a plan for a streamlined organization capable of moving faster, and manufacturing technology that has advanced drastically over the past few years, Intel has all the pieces in place for a successful turnaround. Intel stock trades for around 0.9 times book value, meaning that the company is valued at less than its assets minus liabilities. While this valuation metric has limitations, Intel's is currently hovering around a multidecade low. Intel stock isn't for the impatient. The company must stabilize and then grow its CPU market share, cut costs and enact layoffs without killing morale or losing its best talent, and win multiple large external customers for its foundry. To make things more challenging, Intel faces a highly uncertain economic environment and U.S. trade policies that can change on a whim. Still, given Intel's deeply pessimistic valuation and a new CEO ready to make the painful but necessary changes to get the company back on track, Intel stock has the potential to deliver market-beating gains if the turnaround shows any meaningful signs of progress. Before you buy stock in Intel, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Intel wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,702!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $870,207!* Now, it's worth noting Stock Advisor's total average return is 988% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Timothy Green has positions in Intel. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy. Is Intel Stock a Buy or Sell? was originally published by The Motley Fool
Phone Arena
4 days ago
- Business
- Phone Arena
TSMC's 2nm yield shows why it dominates the industry and snags top-tier tech customers
TSMC is showing why it is the top foundry in the world. According to the Taiwan Economic Daily, yields on its 2nm production currently stand at 60% which means that out of every 100 dies diced from a silicon wafer, 60% of them meet quality control. The second largest foundry, Samsung Foundry, has been having issues with its yields for years and its latest performance trials at 2nm show a 40% yield which is 50% behind TSMC. Yields are a very important metric because they can determine the pricing of a chip and whether a chip is available or in short supply. Let's reuse an example from last week. Let's say two different bakeries are making chocolate chip cookies. Both are baking 100 cookies and TSMC (The Soft Melt in Your Mouth Cookie Company) is able to sell 60 cookies out of the 100 cookies they baked as 40 of them were cracked or crumbled. Sammy's Cookies baked 100 cookies and only 40 were in a condition to be sold. If both cookie companies hoped to generate $200 in sales, TSMC could sell each cookie for $3.33 ($200/60). Sammy's Cookies would have to charge $5 per cookie to make $200 ($200/40). So you can see how important yield is when comes to the chip industry. TSMC's star-studded customer list includes top tier tech firms such as Apple (TSMC's umber one customer), Nvidia, AMD, Qualcomm, and MediaTek. Apple, Nvidia, and AMD have already reserved 2nm production and MediaTek is expected to finalize a 2nm design in September. With its higher yields, TSMC can assure its customers that it can produce the large number of chips that they seek. Samsung Foundry might have figured that being the first foundry to use Gate-All-Around (GAA) transistors would give them an advantage. These transistors use vertically stacked horizontal nanosheets to cover the channel on all four sides. This reduces current leaks and improves the drive current allowing chips using these transistors to deliver better performance and more energy efficiency. Samsung Foundry started using GAA with its 3nm production last year but failed to capitalize on its head start and now TSMC will be using GAA for its 2nm production. Using GAA will improve the performance of TSMC's chips by 10% to 15%, energy consumption will drop 25% to 30%, and transistor density will increase by 15%. All these improvements compare TSMC's 2nm chips to its 3nm silicon. The Taiwan Economic Daily also says that TSMC's 2nm yield has crossed over the line where the foundry can now engage in mass production of chips at the 2nm node. Samsung Foundry is expected to use its 2nm process node to build the home-grown Deca-core Exynos 2600 application processor (AP). This processor will power some of next year's Galaxy S26 flagship models in certain markets.
Times of Oman
6 days ago
- Business
- Times of Oman
TSMC market share rises to 67.6% in Q1, extending global foundry lead
New Delhi: Taiwan Semiconductor Manufacturing Co. (TSMC) has further solidified its dominance in the global pure-play wafer foundry market, growing its market share to 67.6 per cent in the first quarter of this year, according to a report by Taipei-based research firm TrendForce Corp, reported by Focus Taiwan. Although TSMC's revenue declined by 5 per cent quarter-on-quarter to USD 25.52 billion due to seasonal slowdowns, the company's market share still edged up from 67.1 per cent in the previous quarter. TrendForce attributed this performance to continued strong demand for artificial intelligence (AI) and high-performance computing (HPC) applications, as well as accelerated client orders seeking to mitigate risks from ongoing U.S. tariff policies. TSMC's closest competitor, South Korea's Samsung Electronics, saw its market share fall to 7.7 per cent, down from 8.1 per cent in the prior quarter. Samsung's foundry sales dropped by 11.3 per cent to USD 2.89 billion over the same period. China's Semiconductor Manufacturing International Corp. (SMIC) maintained its third-place ranking with a 6.0 per cent market share, ahead of Taiwan's United Microelectronics Corp. (UMC) at 4.7 per cent, and U.S.-based GlobalFoundries at 4.2 per cent. Rounding out the top 10 were China's Huahong Group (2.7 per cent), Taiwan's Vanguard International Semiconductor Corp. (1.0 per cent), Israel's Tower Semiconductor (0.9 per cent, or USD 35.8 billion), China's NexChip (0.9 per cent, or USD 35.3 billion), and Taiwan's Powerchip Semiconductor Manufacturing Corp. (0.9 per cent, or USD 32.7 billion). TrendForce noted that the top 10 foundries accounted for a combined USD 36.40 billion in sales during the first quarter, representing about 97 per cent of the global total--an increase from 96 per cent in the previous quarter--despite an overall 5.4 per cent drop in revenue across the group.
