INTC - Intel: Confronting Industry Shifts And ARM's Dominance

2024-06-26 08:12:18 ET

Summary

• Intel is adapting to market changes by separating Intel Products and Intel Foundry, positioning both businesses to compete better in their segments.
• Intel's transparency on the economics of their business can result in both firms pursuing efficiency and growth better than being consolidated into one.
• Intel is positioning Lunar Lake and Sierra Forest to address the potential disruption ARM poses to its core business.
• Even if you become more conservative than Intel's assumptions on their financial target model for their foundry to breakeven, Intel at $30 per share is almost 50% undervalued.

Introduction

In my first article about Intel ( INTC ), I discuss Intel's upcoming product and its role in Intel's strategy moving forward. Influenced by Clayton Christensen's book The Innovator's Dilemma and Solution , I will explain the industry shifts and disruption that forced Intel to adopt the IDM 2.0 Strategy, how Intel is positioning the company to face these problems, and how it will influence Intel's future.

Separation Of Intel Products And Intel Foundry

Clayton Christensen, in his book The Innovator's Solution , highlights that industries tend to start with an integrated value chain and, over time, into a modular value chain as products "become good enough." ...

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