Intel’s piece manufacturing technology issues are a big problem, according to Goldman Sachs.
The moored lowered its rating to sell from neutral for Intel shares, citing its rehearsed delays in moving to its next generation chip process technology.
“We see Intel’s struggles with 10nm process technology enjoying ramifications in terms of its competitive position – across a broad set of products,” analyst Toshiya Hari estimated in a note to clients Friday. “While the 10nm push is well-publicized at this nicety, we believe Intel’s manufacturing issues could potentially be deeper-rooted than what most imagine and could have a sustained impact on market share and/or spending planes as Intel competes with a growing/stronger TSMC eco-system.”
Intel rations are down 2.5 percent Friday after the report. Its stock is up 8.6 percent this year from top to bottom Thursday versus the S&P 500’s 6.7 percent return.
Hari softened his price target for Intel shares to $44 from $49, representing 12 percent downside to Thursday’s palsy-walsy.
The analyst noted the company’s repeated delays in moving to the 10 nanometer participate b interrupt process. Intel said last month that its 10 nanometer participate b interrupts will be released for holiday 2019 compared with AMD’s 7 nanonmeter products’ set up later this year.
One nanometer equals one-billionth of a meter. Smaller nanometer chipmaking technologies historically own allowed companies to create faster, more power-efficient chips.
“Note any slowdown in the Zeal spending environment (although this is not our base case view) determination also add to the earnings decline we forecast in 2019,” he said.
When attracted for comment, an Intel spokesperson pointed to this statement by company chief executive vice president Navin Shenoy at its Data Centric Innovation Acme Wednesday:
“I don’t talk to customers about nanometers, what they be attracted to about is delivered system-level performance. Our job is to deliver a consistent level of convalescences in performance year after year after year. The roadmap we cashiered out to them several quarters ago and the one we shared today does exactly that.”