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Intel Struggles to Compete with TSMC's Advanced Manufacturing
25 Jul
Summary
- Loop Capital initiates "Hold" rating on Intel stock
- TSMC's manufacturing capabilities seen as superior to Intel's
- Concerns that Intel Foundry may struggle to cover fixed costs
In a recent development, the semiconductor industry is closely watching Intel Corporation (NASDAQ:INTC) as it navigates through a critical period. On July 22, Loop Capital, a financial services firm, initiated coverage of Intel's stock with a "Hold" rating and a $25 price target.
According to the analysts, the primary reason behind this rating is the firm's belief that Taiwan Semiconductor Manufacturing Company (TSMC)'s advanced node manufacturing capabilities are superior to Intel's. This assessment has led the firm to conclude that TSMC is the "obvious manufacturing partner" for Intel to make its products more competitive against rivals like AMD, Nvidia, and Arm.
However, the analysts have also warned that if Intel's foundry business, Intel Foundry, is unable to secure enough volume from Intel's own products, the company may struggle to cover its fixed costs. This could potentially pose a significant challenge for Intel, as the firm's foundry operations are seen as crucial to its long-term competitiveness.
The article highlights the ongoing shifts in the semiconductor industry, where TSMC's technological prowess is emerging as a key factor in shaping the competitive landscape. As Intel navigates these challenges, the company's ability to adapt and leverage its resources will be crucial in determining its future success.
