Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<ul>
<li>By offering 15k and 30k/m 3nm capacity by 4Q24/4Q25 to Intel, TSMC will see Intel becoming one of its top 3 customers by accounting for 12% of TSMC 2025 sales</li>
<li>By leveraging 3nm outsourcing, Intel will have incremental sales/capacity growth of 19-20% per year by accounting for 28%/44% of sales in 2024/2025, beating consensus' 14%/9% y/y sales growth for 2024/2025.</li>
<li>We estimate 30-35% 5 years EPS CAGR for Intel, driven by TSMC's 2/3nm foundry support, lower cost and process R&amp;D, lower capex and depreciation cost, and AI PC CPU launch.</li>
</ul>


By offering 15k and 30k/m 3nm capacity by 4Q24/4Q25 to Intel, TSMC will see Intel becoming one of its top 3 customers by accounting for 12% of TSMC 2025 sales
By leveraging 3nm outsourcing, Intel will have incremental sales/capacity growth of 19-20% per year by accounting for 28%/44% of sales in 2024/2025, beating consensus' 14%/9% y/y sales growth for 2024/2025.
We estimate 30-35% 5 years EPS CAGR for Intel, driven by TSMC's 2/3nm foundry support, lower cost and process R&amp;D, lower capex and depreciation cost, and AI PC CPU launch.


A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC?

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

<ul>
<li>Intel's results last week beat expectations by a wide margin, with margins recovering better than expected by the Street and guided to keep improving through 4Q23E.</li>
<li>New Meteor Lake chips for PCs, branded as 'Intel Core Ultra' will officially launch December 14th and are expected to drive demand for new AI-optimized PCs in 2024E.</li>
<li>Intel said that the PC industry completed its inventory digestion in 1H23, drove sequential demand growth in 3Q23, and this is expected to continue into 4Q23E.</li>
</ul>


Intel's results last week beat expectations by a wide margin, with margins recovering better than expected by the Street and guided to keep improving through 4Q23E.
New Meteor Lake chips for PCs, branded as 'Intel Core Ultra' will officially launch December 14th and are expected to drive demand for new AI-optimized PCs in 2024E.
Intel said that the PC industry completed its inventory digestion in 1H23, drove sequential demand growth in 3Q23, and this is expected to continue into 4Q23E.


PC Monitor: Inventories Healthy & Intel Expects Over 100 Million AI PCs In Two Years

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

<ul>
<li>Q323 revenues of $14.2 billion, some $800 million above the guided midpoint, down 8% YoY but up 10% sequentially.</li>
<li>Current quarter revenue guided up QoQ to $15.1 billion at the midpoint, shares up 10% </li>
<li>Intel is betting big on a return to a 300 million unit PC TAM. Is this realistic?</li>
</ul>


Q323 revenues of $14.2 billion, some $800 million above the guided midpoint, down 8% YoY but up 10% sequentially.
Current quarter revenue guided up QoQ to $15.1 billion at the midpoint, shares up 10% 
Intel is betting big on a return to a 300 million unit PC TAM. Is this realistic?


Intel. Beat & Raise Sends Shares Soaring After Hours

<ul>
<li>Intel launched a new segment reporting structure under which its newly created Foundry P&amp;L allegedly racked up operating losses of ~$17 billion over the past three years</li>
<li>The Foundry P&amp;L is not expected to reach breakeven until the '27/'28 timeframe</li>
<li>Intel's share price is down &gt;10% in the two days since the new financial model was launched. </li>
</ul>


Intel launched a new segment reporting structure under which its newly created Foundry P&amp;L allegedly racked up operating losses of ~$17 billion over the past three years
The Foundry P&amp;L is not expected to reach breakeven until the '27/'28 timeframe
Intel's share price is down &gt;10% in the two days since the new financial model was launched. 


Intel's New Segment Reporting. Transparency Or Obfuscation?

Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

Thematic (Sector/Industry)

<ul><li>Hello! I went on a short hike this weekend, which always seems to cause something to change.</li><li>What changed was that we are seeing a very large leveraged unwind in the market, driven by the BOJ's hike in interest rates.</li><li>Let me write out the series of events. First and foremost, last week, we saw some of the first macro jitters. The CPI came to light, which was viewed as positive. But then NFP showed a bit of weakness.</li></ul>

Hello! I went on a short hike this weekend, which always seems to cause something to change.What changed was that we are seeing a very large leveraged unwind in the market, driven by the BOJ's hike in interest rates.Let me write out the series of events. First and foremost, last week, we saw some of the first macro jitters. The CPI came to light, which was viewed as positive. But then NFP showed a bit of weakness.

United States

Intel Corporation designs, manufactures, and sells computer components and related products.  The Company's major products include microprocessors, chipsets, embedded processors and microcontrollers, flash memory products, graphics products, network and communications products, systems management software, conferencing products, and digital imaging products.

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Intel Corp (INTC US)

A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC?

A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC? Intel needs TSMC foundry services more than TSMC needs Intel as a foundry...

Andrew Lu

PC Monitor: Inventories Healthy & Intel Expects Over 100 Million AI PCs In Two Years

New Meteor Lake chips launching in December are anticipated to boost demand for AI-optimized PCs in 2024. The PC industry's inventory digestion is...

Vincent Fernando, CFA

Intel. Beat & Raise Sends Shares Soaring After Hours

Q323 revenues $14.2 billion, down 8% YoY but up 10% QoQ. Q423 guided up QoQ to $15.1 billion. Shares soar +10%. Intel is betting big on a return to...

William Keating

Intel's New Segment Reporting. Transparency Or Obfuscation?

Intel's newly minted Foundry P&L racked up losses of ~$17 billion over the past three years.It's not expected to hit breakeven until '27/'28. Share...

William Keating

MARKETS AND SEMICONDUCTORS

Hello! I went on a short hike this weekend, which always seems to cause something to change. What changed was that we are seeing a very large...

Fabricated Knowledge

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