More trouble emerged for chipmaker Intel (INTC) as its 20A process turned out to have a few issues connected to it. Investors were willing to extend the benefit of the doubt, though, as Intel shares were up fractionally in Thursday afternoon’s trading.
Reports noted that Intel was set to turn over production of its Arrow Lake chip line to an external foundry after the 20A process turned out to be insufficient. This news hits doubly hard, as just yesterday, we found out about Intel’s 18A process being insufficient to handle silicon wafer production for Broadcom (AVGO).
For its part, though, Intel is still claiming “continued momentum” for the 18A line and expects to use 18A to turn out both Panther Lake and Clearwater Forest chips starting in 2025. However, the Arrow Lake lineup will be “…built primarily using external partners and packaged by Intel Foundry.” Still, this development leaves some questioning whether or not the Arrow Lake lineup will meet its originally projected launch date, which might have been in October.
A Boost to R&D
While this does not sound like great news, there is a bit of a boost to Intel’s future. Intel got together with the Advanced Industrial Science and Technology (IAST) group in Tokyo to create an advanced research and development (R&D) center.
The move is expected to give Japan’s own semiconductor industry a boost, along with giving Intel a leg up on its own development. Chip designers therein will have access to the latest in process technologies and, ultimately, produce new chips that are a match for the most world-class releases. The biggest edge is that the center will offer access to Extreme Ultraviolet Lithography (EUV) technology, which previously was only available in some of the most select research centers.
Is Intel a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds, and five Sells assigned in the past three months, as indicated by the graphic below. After a 46.32% loss in its share price over the past year, the average INTC price target of $26.09 per share implies 34.04% upside potential.
