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Intel (INTC) Announces $20B Investment to Rev Up Manufacturing
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At the Intel Unleashed: Engineering the Future webcast, Intel’s (INTC - Free Report) CEO Pat Gelsinger announced a $20-billion investment to set up two factories (fabs) at its Ocotillo campus in Chandler, AZ. The planning and construction of the fabs are expected to begin with immediate effect.
Gelsinger further added that the new fabs are being created to back the increasing needs of the company’s product portfolio as well as its customers. The fabs will also offer committed capacity for foundry customers.
The establishment of these fabs will also create 15000 long-term employment opportunities in the region along with additional 3,000 new job opportunities for both for high-tech jobs and construction work.
Intel also provided updates regarding its outlook for the first quarter of 2021 and provided full year guidance. The chipmaker now anticipates exceeding its revenues and non-GAAP earnings per share guidance for first-quarter 2021. The outperformance is likely to be driven by sustained solid demand for notebooks amid work from home and online learning trends.
Intel’s earlier first-quarter 2021 non-GAAP earnings and revenue guidance are pegged at $1.10 per share and $17.5 billion, respectively.
For 2021, the tech giant continues to anticipate strong PC demand with double-digit percentage growth witnessed in PC total addressable market (TAM). Nonetheless, shortage of critical third-party components like substrates across industry will serve as an offsetting factor for PC revenue growth.
Intel expects 2021 non-GAAP earnings to be $4.55 per share and non-GAAP revenues of $72 billion. Capital spending for the year are expected in the range of $19-$20 billion, while non-GAAP free cash flow is projected to be $10 billion for 2021.
Intel’s IDM 2.0 Strategy: Key Points
Intel is looking to bolster its integrated device manufacturing (IDM) model by launching the IDM 2.0 strategy. Elaborating further on IDM 2.0 strategy, Gelsinger stated that the strategy combines the company’s Internal Factory Network and its new Foundry Services along with third-party foundry capacity.
Intel underscored its focus to continue manufacturing most of its products in-house. The chipmaker also stated that it is looking to consolidate its existing partnership with third-party foundries.
Intel is looking to outsource the manufacturing of different modular tiles based on advanced process technologies for both its client and data center segments’ offerings from 2023 to third-party foundries.
Intel’s ambitious turnaround plan also includes the formation of a new separate business division, Intel Foundry Services (“IFS”), which will be helmed by industry veteran, Dr. Randhir Thakur. With IFS, Intel is aiming to become a key provider of foundry capacity in the United States and Europe to capitalize on the increasing worldwide demand for semiconductor manufacturing.
Regarding its 7 nanometer (nm) ramp up, the chipmaker remains optimistic as it is accelerating the usage of extreme ultraviolet lithography (EUV) in a rearchitected and simplified process flow. Also, the tech giant is looking to “tape in the compute tile for its first 7nm client CPU” (dubbed Meteor Lake) in the second quarter of 2021.
Intel has been plagued by series of delays regarding its 7 nm technology development. Last year, the company detected a defect mode in 7 nm process, which caused yield degradation. As a result, initial production shipments of Intel’s first in house-based 7-nm data center CPU design are now scheduled in the first half of 2023.
In contrast, Advanced Micro Devices (AMD - Free Report) is currently utilizing Taiwan Semiconductor Manufacturing Company’s 7 nm process technology, which is facilitating it to deliver its advanced 7 nm chips faster to market.
Intel’s Turnaround Initiatives
After a series of setbacks, Intel is now working on its turnaround strategy. The company brought on board Pat Gelsinger, who took up CEO responsibilities in February 2021. Gelsinger earlier worked with Intel for three decades and recently served as the CEO of VMware from 2012.
Further, the chipmaker is well-poised to gain from increasing demand for its 10 nm SuperFin process-based 11th Gen core processors, triggered by coronavirus-induced remote work and online learning wave amid strong traction witnessed in PC market.
Intel also commenced shipping its first 10 nm based Xeon Scalable CPU (labeled Ice Lake) and aims to boost production volume through the first quarter of 2021.
Mobileye growth is anticipated to be driven by design win momentum and a recovering automotive industry through 2021. In the last reported quarter, Mobileye revenues increased 39% on a year-over-year basis to $333 million.
Recently, Intel teamed up with International Business Machines (IBM - Free Report) to work on development of next-generation logic and packaging technologies.
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After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
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Image: Bigstock
Intel (INTC) Announces $20B Investment to Rev Up Manufacturing
At the Intel Unleashed: Engineering the Future webcast, Intel’s (INTC - Free Report) CEO Pat Gelsinger announced a $20-billion investment to set up two factories (fabs) at its Ocotillo campus in Chandler, AZ. The planning and construction of the fabs are expected to begin with immediate effect.
Gelsinger further added that the new fabs are being created to back the increasing needs of the company’s product portfolio as well as its customers. The fabs will also offer committed capacity for foundry customers.
The establishment of these fabs will also create 15000 long-term employment opportunities in the region along with additional 3,000 new job opportunities for both for high-tech jobs and construction work.
Intel Corporation Price and Consensus
Intel Corporation price-consensus-chart | Intel Corporation Quote
Intel also provided updates regarding its outlook for the first quarter of 2021 and provided full year guidance. The chipmaker now anticipates exceeding its revenues and non-GAAP earnings per share guidance for first-quarter 2021. The outperformance is likely to be driven by sustained solid demand for notebooks amid work from home and online learning trends.
Intel’s earlier first-quarter 2021 non-GAAP earnings and revenue guidance are pegged at $1.10 per share and $17.5 billion, respectively.
For 2021, the tech giant continues to anticipate strong PC demand with double-digit percentage growth witnessed in PC total addressable market (TAM). Nonetheless, shortage of critical third-party components like substrates across industry will serve as an offsetting factor for PC revenue growth.
Intel expects 2021 non-GAAP earnings to be $4.55 per share and non-GAAP revenues of $72 billion. Capital spending for the year are expected in the range of $19-$20 billion, while non-GAAP free cash flow is projected to be $10 billion for 2021.
Intel’s IDM 2.0 Strategy: Key Points
Intel is looking to bolster its integrated device manufacturing (IDM) model by launching the IDM 2.0 strategy. Elaborating further on IDM 2.0 strategy, Gelsinger stated that the strategy combines the company’s Internal Factory Network and its new Foundry Services along with third-party foundry capacity.
Intel underscored its focus to continue manufacturing most of its products in-house. The chipmaker also stated that it is looking to consolidate its existing partnership with third-party foundries.
Intel is looking to outsource the manufacturing of different modular tiles based on advanced process technologies for both its client and data center segments’ offerings from 2023 to third-party foundries.
Intel’s ambitious turnaround plan also includes the formation of a new separate business division, Intel Foundry Services (“IFS”), which will be helmed by industry veteran, Dr. Randhir Thakur. With IFS, Intel is aiming to become a key provider of foundry capacity in the United States and Europe to capitalize on the increasing worldwide demand for semiconductor manufacturing.
Regarding its 7 nanometer (nm) ramp up, the chipmaker remains optimistic as it is accelerating the usage of extreme ultraviolet lithography (EUV) in a rearchitected and simplified process flow. Also, the tech giant is looking to “tape in the compute tile for its first 7nm client CPU” (dubbed Meteor Lake) in the second quarter of 2021.
Intel has been plagued by series of delays regarding its 7 nm technology development. Last year, the company detected a defect mode in 7 nm process, which caused yield degradation. As a result, initial production shipments of Intel’s first in house-based 7-nm data center CPU design are now scheduled in the first half of 2023.
In contrast, Advanced Micro Devices (AMD - Free Report) is currently utilizing Taiwan Semiconductor Manufacturing Company’s 7 nm process technology, which is facilitating it to deliver its advanced 7 nm chips faster to market.
Intel’s Turnaround Initiatives
After a series of setbacks, Intel is now working on its turnaround strategy. The company brought on board Pat Gelsinger, who took up CEO responsibilities in February 2021. Gelsinger earlier worked with Intel for three decades and recently served as the CEO of VMware from 2012.
Further, the chipmaker is well-poised to gain from increasing demand for its 10 nm SuperFin process-based 11th Gen core processors, triggered by coronavirus-induced remote work and online learning wave amid strong traction witnessed in PC market.
Intel also commenced shipping its first 10 nm based Xeon Scalable CPU (labeled Ice Lake) and aims to boost production volume through the first quarter of 2021.
Mobileye growth is anticipated to be driven by design win momentum and a recovering automotive industry through 2021. In the last reported quarter, Mobileye revenues increased 39% on a year-over-year basis to $333 million.
Recently, Intel teamed up with International Business Machines (IBM - Free Report) to work on development of next-generation logic and packaging technologies.
At present, Intel carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
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