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Wednesday, February 28, 2024

Intel’s rebirth could see it become the US national chip champion, says GlobalData

Following the publication of Intel’s Q4 and full-year 2021 financial results, analysts at GlobalData, a leading data and analytics company, give their comments on the results:

Dr Lil Read, Analyst in the Thematic Research Team at GlobalData, offers her view:

“Intel hasn’t got the metaverse memo, leaving Nvidia in pole position to shape the evolving virtual world where users share simulated scenarios. The emergence of the metaverse has already spurred the biggest mergers and acquisitions (M&A) deal in tech history—Microsoft’s $69bn acquisition of Activision Blizzard—but Intel has been relatively quiet on this emerging mega theme. It may expand on its metaverse strategy at its investor day on February 17.

“There is no doubt that Intel has some fantastic technology. It leads in advanced packaging, which will redefine the semiconductor industry in the next few years, and dominates the PC and data center CPU markets. Intel is also developing futuristic technologies such as quantum computing, neuromorphic computing, and silicon photonics, that are critical for speeding up data center communications and networking.

“Intel is also on the road with autonomous vehicle (AV) technology. By taking its autonomous driving system Mobileye public this year, Intel will ensure that it is at the forefront of the technology’s development in partnership with car firms like Geely, Volkswagen, and Ford.”

Mike Orme, Consultant Analyst in the Thematic Research Team at GlobalData, offers his view:

“Over the next four to five years, Intel will spend at least $40 billion and receive several billions more in federal and state subsidies to build out its production capacity in the US. The company aims to become a giant integrated device manufacturer again, as well as a major contract manufacturer for third parties. That will put Intel in direct competition with the seemingly unassailable TSMC and an increasingly ambitious Samsung.

“However, the odds are shifting in Intel’s favor because it is at the forefront of the (now urgent) US national drive to make leading-edge chips at home. Global supply chains look increasingly fragile and unreliable in the wake of the chip shortage, hence the prospect of lavish public sector subsidies for America’s emerging national chip champion. That is an industry game-changer that nobody could have foreseen two years ago when the world was a categorically different place.’’

David Bicknell, Principal Analyst in the Thematic Research Team at GlobalData, offers his view:

“Two years ago, Intel was facing an existential crisis. Under Wall Street pressure, it looked ready to become a fabless chip operation to benefit from TSMC’s process technology after its own fell well behind the curve. However, new CEO Pat Gelsinger has made Intel an engineering company again. We will see over the next four or five years whether Gelsinger’s Intel is indeed reborn as the industry’s mover and shaker. The jury’s out.”

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