With the news that the Trump administration may acquire stake in Intel, Intel's crystal foundry business has once again become the focus. However, investment bank JPMorgan believes that Intel's revitalization of crystalline foundry has a ver...
With the news that the Trump administration may acquire stake in Intel, Intel's crystal foundry business has once again become the focus. However, investment bank JPMorgan believes that Intel's revitalization of crystalline foundry has a very low impact on Telco and may even be beneficial to Telco, because it will prevent the government from conducting over-examination of its market leadership position.
JPMorgan pointed out that Intel should first focus on mature processes, establish a stable foundry foundation, and convince major customers such as NVIDIA and Apple, believing that it can supply chip orders stably.
Speaking of Intel's production dilemma, JPMorgan believes that the problem cannot be solved by capital injection. Previous reports pointed out that NT$ might fail to advance the process chip, but this news did not boost stock prices because of potential government reviews and supervision risks.
Therefore, JPMorgan believes that Intel's entry into the Grille Round will help NTEM avoid allegations of failure. At the same time, it is recommended that Intel must perform multiple processes stably to prove its chip manufacturing reliable and win the trust of major chip design companies such as NVIDIA and Apple.
JPMorgan also pointed out that even if Intel expands its foundry business, this may still affect the trust of customers because it also produces its own chips. In terms of restructuring strategies, cash flow optimization rather than single capital injection is the key to solving Intel's financial difficulties, because the cash flow of Intel's product business is not enough to completely support the foundry department.
According to Yahoo Finance data, Intel's overall free cash flow for 2024 was -1.57 billion USD, which has improved by $5 billion in the past twelve months, but the free cash flow for the past twelve months was -1.09 billion USD, but quarterly data shows a significant improvement compared with the same period last year.
Among them, the free cash flow in the second quarter of 2024 was -2.4 billion US dollars, which has improved to -1.5 billion US dollars under the guidance of executive chairman Chen Liwu. In the latest quarter, asset and equipment expenditures were the maximum cash flow consumption, reaching US$3.6 billion, a sharp drop from US$5.7 billion in the second quarter of last year.
JPMorgan supplement, Intel has always been focusing on products as its core, and the company is difficult to combine customer needs and cost efficiency in OEM business. It is recommended that Intel can first focus on more mature processes such as 5 nanometers and 3 nanometers to optimize OEM business and establish a stable position without causing customer competition.
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