Index falls as earnings results weigh; pound above $1.33, Bodycote soars
On Friday, UBS analyst Timothy Arcuri maintained a Neutral rating on Intel Corporation (NASDAQ:INTC) with a consistent price target of $23.00. According to InvestingPro data, Intel, currently trading at $20.67, is showing signs of being undervalued despite facing significant operational challenges. The semiconductor giant, with a market capitalization of $91.66 billion, has seen its stock decline about 43% over the past year. Arcuri highlighted a recent preliminary agreement between Intel and Taiwan Semiconductor Manufacturing Company (TSMC) to establish a joint venture, where TSMC would acquire approximately a 20% stake in Intel’s chip manufacturing operations.
The proposed joint venture, as Arcuri noted, seems to resemble the American Semiconductor Manufacturing Corp structure that has been a topic of discussion in Silicon Valley. The structure would potentially include other U.S. companies such as Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), and Qualcomm (NASDAQ:QCOM), with the majority of shares being held by Intel and these U.S. entities. The agreement would involve TSMC contributing technology and personnel rather than direct capital investment.
This collaborative effort is in line with the previous Trump Administration’s push to increase domestic semiconductor production. The administration had encouraged such partnerships to ensure the manufacturing of more advanced chips within the United States.
While the exact motivations behind TSMC’s decision to enter this joint venture are not entirely clear to UBS, the partnership is expected to bring both capital and operational expertise to Intel’s foundry services. This could potentially lead to the separation of Intel’s foundry and product businesses, a move UBS has previously discussed. InvestingPro analysis reveals Intel is currently burning through cash rapidly, with negative free cash flow of $15.66 billion in the last twelve months, highlighting the potential strategic importance of this partnership.
The joint venture is seen as a strategic step towards enhancing the semiconductor manufacturing capabilities within the United States, a move that has garnered the interest of policymakers aiming to boost the domestic industry. The collaboration between Intel and TSMC, along with potential involvement from other major U.S. tech companies, could mark a significant shift in the semiconductor manufacturing landscape. With Intel’s next earnings report due on April 24, 2025, investors can access comprehensive analysis and additional insights through InvestingPro’s detailed research reports, which cover over 1,400 top US stocks.
In other recent news, Intel and Taiwan Semiconductor Manufacturing Co. (TSMC) are reportedly in discussions to form a joint venture. The proposed deal involves TSMC acquiring a 20% stake in a new company that would manage Intel’s chipmaking facilities, with Intel and other U.S. semiconductor firms holding the majority of shares. This collaboration is still under negotiation, with no final agreement reached yet. Meanwhile, BofA Securities has maintained a Neutral rating on Intel stock with a $25.00 price target, following Intel’s Vision event where the new CEO, Lip-Bu Tan, outlined his initial priorities. Bernstein analysts also upheld a Market Perform rating for Intel, echoing a cautious stance given the limited details presented at the event.
In another development, Barclays (LON:BARC) reiterated its Overweight rating on Jabil shares, maintaining a $184.00 price target. This follows Jabil’s strategic move into the high-speed transceiver market after acquiring Intel’s transceiver manufacturing assets. Jabil is in talks with major tech firms like Meta (NASDAQ:META) and AWS for its advanced transceiver products. These recent developments underscore significant movements and strategic shifts within the semiconductor industry, as companies like Intel and Jabil navigate competitive pressures and opportunities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.