Intel (INTC.US) plans to skip the 18A process and directly use 14A DaMo: the short-term impact is minimal

The Zhitong Finance App learned that according to reports, Chen Liwu, the new CEO of Intel (INTC.US), is considering major reforms in its foundry foundry business and directly using the 14A process against competitors to attract major customers such as Apple (AAPL.US) and Nvidia (NVDA.US).

According to industry sources, judging by Chen Liwu based on industry feedback, the Intel 18A process is facing difficulties in attracting new customers. Therefore, he is considering investing more resources into 14A process nodes that are more likely to compete with TSMC. If it finally decides to stop further promoting the 18A process, Intel may face hundreds of millions to billions of dollars in asset depreciation. The decision is complex and involves a large amount of money, and it is expected that the board will not make a final decision until the fall meeting. However, it should be emphasized that this potential adjustment will not affect Intel's own product division, as well as existing external customers such as Microsoft (MSFT.US) and Amazon (AMZN.US) AWS, which continue to use the process series.

In response, Morgan Stanley said that Intel's move will have little impact in the short term. The bank rated Intel's stock as “wait and see,” with a target price of $23.

A team of analysts led by Joseph Moore said in an investor report on Thursday: “To some extent, the ambitions of the 18A process have already been reduced. We think the potential impact of these steps is minimal, and the write-down is minimal.” “Even in the most optimistic situations, customers will evaluate Intel's capabilities starting with smaller projects, and the capital expenses associated with these smaller projects aren't significant. The company's management has always emphasized that the way to achieve foundry foundry break-even depends very little on external customers. So for 2025/26, none of these will have much economic impact.”

Morgan Stanley also pointed out that despite Intel's recent difficulties, the company still has a large share of the client and server CPU market. “More importantly, the market seems to want a faster solution, although Chen Liwu has reminded us many times that this will be a long road,” the analyst said. “We've heard reports from various media about various business splits or joint ventures that seem completely unrealistic. It's enough for us that the company is successful with processors, but we're not sure if the market is in the same position as us.”