Chip stock Intel (INTC) and its aspirations toward being a foundry gained a little farther today as reports noted that its ASML Holdings machines are now up and running. That should have been good news, but as far as investors were concerned, it was a disaster. Shares plunged nearly 5% in Tuesday afternoon’s trading.
The reports note good news, too; the first two ASML Holdings machines are in place, and so far, they are proving even more reliable than the last generation to come out. Steve Carson, senior principal engineer with Intel, noted at a conference that Intel has produced over 30,000 wafers so far with the new machines.
With 30,000 wafers already made, Intel can make thousands of individual chips from there, and hopefully give itself some kind of edge in the chip market that it sorely needs. The events of the last several months have left Intel in sore need of such edges. It may well have them now, though, as Intel was the first chipmaker to take delivery of new high numerical aperture lithography machines. These new devices, reports note, are expected to make chips that are both smaller and faster than the kind seen now, which will be a big win for Intel.
Fear of a Wider Market Problem
However, we know that this news is not having the impact one might expect. A new report suggests a reason, as it turns out early Tuesday saw a significant slump throughout the chip sector. The reason? The Chinese market may find itself further strictured against imported chips.
The Trump administration is reportedly considering another set of controls on the Chinese export market, in a move to keep China from bringing out the kind of artificial intelligence developments that might surpass the United States. By keeping the chips necessary for such developments out of Chinese hands, that reduces the odds they will be able to fully compete. But that also takes one major market out of the picture, which could be an issue for chip makers.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 27 Holds and five Sells assigned in the past three months, as indicated by the graphic below. After a 45.78% loss in its share price over the past year, the average INTC price target of $22.69 per share implies 1.9% downside risk.
