Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

It has been rumored that the world’s largest manufacturer of semiconductor products, Intel Corp’s (INTC - Analyst Report) processor has been chosen to power a new version of one of Samsung Electronics’ top-tier Android tablets, according to Reuters.

Reportedly, Samsung will use Intel's Clover Trail+ mobile chip for at least one version of its 10.1-inch Galaxy Tab 3.It is still not clear whether Samsung plans to introduce other versions of the 10-inch Galaxy Tab equipped with its own processors or that of other companies. Earlier, all Samsung devices were powered by ARM Holdings plc's (ARMH - Snapshot Report) chips.

Despite being one of the largest chipmakers, Intel’s main business of making processors for PCs is seeing sagging demand. This can be attributed to the increasing customer shift toward tablets and hybrids. Though Intel is well ahead of its closest rival Advanced Micro Devices (AMD - Analyst Report), its new products and even Ultrabook laptops have so far failed to excite consumers.

In fact, Brian Krzanich, Intel’s new chief executive officer, stated that the chipmaker is primarily focusing on expanding its footprint in the mobile market. The company is preparing itself for the emerging mobile segment and is trying to get its chips into new hardware. The company is also gearing up to ship its next-generation processor, Haswell, which is expected to drive Intel’s success in the mobile segment.

A new survey on tablets released by IDC this week shows that the tablets market continues to expand at a healthy rate. Easily exceeding numbers for the entire first half of 2012, tablet shipments for the first quarter of 2013 came in at 49.2 million units for the first quarter of 2013.

Though Apple Inc. (AAPL - Analyst Report) continues to lead the pack, with a market share of 39.6%, Samsung holds the second place with a market share of 17.9%. Samsung grew year over year by a whopping 282.6%.

Even a single version of Galaxy Tab 3 based on an Intel chip is a big deal for the chipmaker, as Samsung is the world's second largest manufacturer of tablets. We believe this win will give Intel a chance to prove that its Atom chip has the right combination of power and efficiency to compete in the growing mobile market and thereby help Intel to capitalize on the existing opportunity in the mobile market. The next version of the product is likely to be even better.

Intel is also the leader in process technology with the capacity to ship in high volumes, which could be the reason Samsung picked Intel instead of its own chips. The fact that Clover Trail+ can be used in both Windows and Android devices could also have influenced the decision. If successful, the companies will likely expand their relationship, which is exactly what Intel is looking for.

Intel has a strong market position and technology lead and continues to show solid execution.

The company delivered decent first quarter 2013 results. The top-line numbers for the quarter were within the guidance range and slightly better than normal seasonality, while the bottom line was slightly disappointing.

Although the decline in PC demand will affect results in the upcoming quarter, we believe that the focus on the mobile segment, adoption of new products, growth in data centers and new offerings should help Intel get back on track.

Intel shares carry a Zacks Rank #3 (Hold). Another stock in the sector that is performing well currently is STMicroelectronics (STM - Snapshot Report), carrying a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 35.33 +14.82%
ANI PHARMACE ANIP 24.79 +14.66%
E-HOUSE CHIN EJ 10.99 +9.24%
CANADIAN SOL CSIQ 26.97 +7.15%
INTL CONS AI ICAGY 33.30 +5.38%