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INTC is at a very critical
point ...
With Moore's Law seemingly breaking down (although we have been
there several times before), and notwithstanding IBM's recent
breakthrough, these challenges INTC is facing, specially in the
semiconductr process where INTC's ability to shrink its die well
ahead of competition and produce its CPUs cheaper, as well as able
to run them at ever higher speeds, promise to make the chip fab
process more even among its competitors, i.e. no longer the clear
advantage it has historically enjoyed.
The continual deterioration of the PC segment is not helping at
all, and there seems to be cracks that are appearing in the Data
Center market for high end servers.
On a side note, INTC's delay of its next gen chips to late 2016
(I think that is what I heard), opens up a window for AMD to
release theirs ahead, not that there is any gurantee AMD is going
to manage it, but the window is nevertheless open. AMD also
has an good slate of product releases in the CPU, APU and GPU
coming up in the mid term, if it does not manage to impress and
gain design wins that lead to substantial sales traction, game
could be over for AMD. Stock is trading at $1.79, Wow!
This Barron's INTC article on the Fab Process outline
both the challenges and opportunities INTC is facing, subscription
required:
online.barrons.com/ar..._mag_h
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lt cap,
Haven't read the Barron's article you cited yet. I agree that
INTC is at a more critical point than it has been for....well, for
at least as far as I can remember (okay, let's peg it to AMD's
'beat', being the first to a 1ghz cpu - which Intel quashed with
illegal coercive trade practices, and AMD sued 5 years too late.)
That die shrink and cpu delay is really the thing that gives me
pause not to buy in here - yet. They do have the financial
resources to undercut competition and 'bleed' longer than any of
the competing foundries. Altho no one, including analysts are that
fond of profits going south. Their quarter was actually not bad -
beat in some areas, guided 3rd q to the high end of its range. But
yes, that die shrink and the fact that so far, their large capex
expenditures to become a significant player in other niches doesn't
show signs of really bearing good fruit. And the long term
prospects certainly trump whatever short term good news there may
be.(But jeez, horribly unfortunately 'tied' to MSFT as a 'partner'
- like having a quadraplegic running a leg in a relay race for
you.)
Still, I *think* their ability to solve big crises is better
than is thought. And I would jump back in here - but that die
shrink lead is about as critical as you cite. I'd sure think about
it in mid-20's if the macro isn't what causes the drop, as I don't
see their dividend suffering.
On AMD, I'm still a skeptic, altho for some odd reason I never
sold my 1k shares @$3.70 - I don't think they can really compete,
and will follow that historic trend. I don't know about the cpus
but they're still playing catchup with Nvidia in the gpu arena and
that 'lower price for not-quite-as good' cards has never blossomed
for them. I said in a previous post that their new 3XX line of gpus
are mostly the same cruddy 32nm die, same cards rebranded, with
some clock and memory speed tweaks, mostly. I know these cards are
supposed to 'hold the fort' while they ready the nextgen, but
at trusted sites like Tom's Hardware, the AMD chip's that used to
win 'best in class' have mostly capitulated to Nvidia's offerings.
Even at $1.79, I think AMD is like having Helen Keller play
videogames for your team in an online 'deathmatch' competition. I'm
sorry- I don't think I've left any politically correct rules
unbroken.
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Author:
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Jam
ok
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Subject:
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Off Topic
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Sentiment:
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Neutral
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Date:
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07/19/15 at 4:45 PM CDT
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