2023-07-05 15:25:03 ET
Intel's ( NASDAQ: INTC ) is "on track" to regain its technology leadership from its competitors, according to investment firm Northland Capital Markets, but it's the chip giants's push to be a global foundry that is seen as a necessity.
Analyst Gus Richard, who reiterated his outperform rating and per-share price target of $45 on Intel ( INTC ), said it looks as if Intel is catching up with AMD ( AMD ) and Nvidia ( NVDA ) when it comes to process technology. However, the transformation to create a "profitable" foundry business for external customers is likely to help the company's financials.
Richard added that Intel ( INTC ) could fill its older fabs with foundry customers and that should fix the company's business model.
Intel's ( INTC ) transition to become a successful foundry is no sure thing, Richard conceded, as it goes up against the likes of Taiwan Semiconductor ( TSM ), GlobalFoundries ( GFS ) and others. However, if it does succeed in the transition, led by CEO Pat Gelsinger, it could generate "high margin, leading edge" revenue from its internal products and "decent" trailing gross margins from its foundry business.
Intel ( INTC ) shares fell more than 2.5% in late trading on Wednesday.
More on Intel and semiconductor production
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- Intel: Foundry Model Illusion
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Intel 'on track' to regain tech leadership, foundry a necessity: Northland