Global semiconductor giant Intel Corp. (INTC) has entered into a strategic partnership with MediaTek to produce chips by utilizing the advanced process expertise of Intel Foundry Services (IFS). The strategic move enables MediaTek to bolster its supply chain by bringing on a foundry partner with a presence in the U.S. as well as Europe.
IFS President, Randhir Thakur, commented, “As one of the world’s leading fabless chip designers powering more than 2 billion devices a year, MediaTek is a terrific partner for IFS as we enter our next phase of growth. We have the right combination of advanced process technology and geographically diverse capacity to help MediaTek deliver the next billion connected devices across a range of applications.”
The move further builds on MediaTek’s 5G data card partnership with Intel, extending it to the production of smart edge devices. IFS plans to expand capacity at its current locations and is also planning new investments in Ohio and Germany.
Upcoming Q2
On July 28, Intel is expected to announce second-quarter numbers, and the Street anticipates earnings of $0.69 per share. In the year-ago period, Intel posted earnings of $1.28 per share, handily beating estimates of $1.07.
Analysts’ Take on INTC
Susquehanna’s Christopher Rolland has reiterated a Hold rating on the stock while decreasing the price target to $40 from $42. Amid weakening PC demand, the analyst sees the company posting lower-than-expected results as well as guidance on Thursday.
The Street has a Hold rating on Intel with an average price target of $47.41, which implies 20.94% potential upside.
Closing Note
Intel’s foundry unit continues to make major progress. The company stands to benefit with significant capacity additions and expanding geographic footprint. The second quarter results on July 28 remain a key event to keep an eye on as the industry faces slowing demand due to worsening macro conditions.
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