Investing.com -- Citi analysts remain skeptical of Intel’s foundry ambitions, pointing to a significant technology gap versus Taiwan Semiconductor Manufacturing and ongoing challenges in gaining traction with external customers.
Following Intel’s Foundry Connect event, Citi reiterated its Neutral rating on the stock, citing limited progress despite a strong commitment from management.
“Intel CEO Lip-Bu Tan reiterated the company’s commitment to merchant foundry,” Citi wrote. However, the analysts warned that “Intel merchant foundry is at least nine years behind TSMC, as it is only releasing 16nm now, which TSMC released in 2016.”
While Intel (NASDAQ:INTC) emphasized its internal progress on next-generation nodes, Citi noted a disconnect between that and its merchant foundry timeline.
“Intel stated it is on track for volume ramp of its own CPUs on leading-edge 18A process by the end of 2025, which is good. However, we believe merchant foundry is several years behind that,” wrote the bank’s analysts.
The firm also pointed out that Intel itself acknowledged lagging momentum in its foundry business.
“Intel acknowledged that the company hasn’t had as much traction as targeted with 18A for foundry customers,” Citi said, though it added that Intel “feels better about its upcoming 14A foundry offering due to the maturity of the process design kit (PDK).”
Citi maintained its $21 price target, equating to 20 times its 2026 EPS estimate, which it said is “below the average semiconductor companies’ valuation given lower profitability.”
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