Oh boy. Remember how chip stock Intel (INTC) was putting a lot into its foundry aspirations? Well, it looks like those may have died on the vine, as new reports suggest Intel will be doing a lot more outsourcing to Taiwan Semiconductor Manufacturing Corporation (TSM). The news hit investors like a bus, and Intel was down over 3% in Tuesday afternoon’s trading.
A new report from WCCFTech noted that Intel is looking to place more of its Arrow Lake chips—which were already seen suffering from a somewhat botched launch—into TSMC’s hands. The move is designed to “…maintain market competitiveness and cover sluggish IFS performance.”
Intel is not only ramping up its Arrow Lake outsourcing but is also outsourcing its Lunar Lake chips. Much of that is likely connected to the potential new market threat that Nvidia (NVDA) represents, with the AI powerhouse looking to make a play for the desktop PC market in the coming months.
More Processor Troubles
But that is not where the troubles end. Rather, they only begin there. A report from XDA Developers detailed the unfortunate saga of the Intel Core i9-14900K processor that was just one year old but, apparently, now useless. The report detailed attempted fixes—many of which seemed to help for a while—but the damage was already done. This is a black eye that Intel did not need, especially if Nvidia does get involved.
Another unfortunate case found by PC World revealed that Intel was voiding warranties over liquid metal getting on manufacturers’ labels, though this is not so much a problem for Intel as it is for Intel users. The biggest users of liquid metal are PC modders, who use thermal paste to improve conductivity between processors and coolers.
The practice is considered somewhat risky by some, and Intel—likely having problems enough already—is simply staying out of it, refusing to replace processors damaged in such a fashion.
Is Intel a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 22 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 35.71% loss in its share price over the past year, the average INTC price target of $24.43 per share implies 0.66% upside potential.
