Despite a second-quarter report featuring fundamentally good financials, Intel's stock produced an unprecedented drop on Friday on Friday after Bob Swan, the company's CEO, raised the possibility of a chip maker for the first time since the chip's existence in a conference call on Thursday. you can trust manufacturers to mass-produce the processors they design.
Thursday's speech by Intel's management shocked analysts, although signs pointing in the direction of the process had been seen before. In its 50 years of existence, the manufacturer has never shown up to outsourcing the production of chips, and one-handed design and manufacturing has always been one of the most distinctive features of the American company, which has dominated the market for decades. At the same time, the company was forced to postpone the introduction and mass production of new processors with 10nm manufacturing technology, and last week the company announced that its first 7nm lines for the consumer market would have an unexpected impact on the introduction of the manufacturing process. due to problems with further delays, at the earliest in 2022.
Meanwhile, at Taiwan Semiconductor Manufacturing Co. (TSMC), which entrusts chip design to its partners, which gave Intel’s biggest rivals a competitive advantage, most notably AMD, which manufactures at TSMC.
Analysts say the TSMC could be obvious and, in fact, the only partner for Intel in a possible manufacturing outsourcing process, but this could raise additional questions. Thus, for example, it is questionable whether the Taiwanese company will be willing to prioritize Intel’s orders, whether it has sufficient capacity at all to serve Intel’s orders. While setting up additional plants or production lines may be a solution, TSMC may not be willing to do so in such a way that Intel may return production to its own plants after the manufacturing technology drawback has been overcome.
Intel’s stock fell almost immediately by 15% in trading, while shares of AMD and TSMC rose 17 and 12 percent, respectively. Nvidia closed the day with a smaller gain of 1.1%, bringing its market value to $ 252 billion, while Intel's fell to $ 217 billion.
Gellert is Technology Editor at Counting News Media and contributor at other major tech publications. Her interests includes testing new gadgets and reading.