Chip stock Intel (INTC) is counting on a win with its 18A process, and new reports suggest that it may be on to something after all. In fact, the latest reports suggest Intel will be able to compete with Taiwan Semiconductor (TSM) pretty effectively. But despite this, Intel shares were still down fractionally in Monday afternoon’s trading.
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The new word comes out of Intel itself, who published a paper about the 18A fabrication process. Most were looking for 18A to be a real powerhouse when it came to chip delivery, and the early reports say it should not disappoint. Chip density is expected to rise 30%, and chip performance is likely to increase 25%. Power consumption demands, meanwhile, will drop a dizzying 36%, which suggests lower pricing potential down the line.
Moreover, the new process has met Joint Electron Device Engineering Council (JEDEC) reliability tests, reports note, and that is not an easy task as JEDEC testing is said to be “stringent.” One of the tests involves a 1,000 hour test at high temperatures designed to simulate aging, as well as “extensive thermal cycling.”
A Hidden Restructuring Opportunity?
Meanwhile, some are looking at Intel not for what it can produce, but what it has already produced that remains locked up behind less-than-effective operations. Specifically, the value of Intel’s foundry operations. While the foundry arm has pulled a lot of capital, it is also front and center when it comes to talking about chip sovereignty, and that might be one of the quietest hot-button issues seen in some time.
In fact, some are already waiting for someone to force the issue onto Intel, making a play for that foundry operation. The case for a breakup or spinoff only becomes more pronounced the longer Intel keeps change waiting. And with the foundry now largely in control—Intel’s products division is certainly a power, but it is also a power that has recently lost ground to a number of competitors—it is likely to be a major draw to anyone who wants to come in and claim it.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 31.04% loss in its share price over the past year, the average INTC price target of $21.30 per share implies 1.19% upside potential.
