Speculation over a potential partnership between Intel and Taiwan Semiconductor has surfaced, but Citi analyst Christopher Danely remains doubtful about its success. Danely cited three main reasons why he believes the cooperation will fail.
Firstly, Intel staff would have to follow commands from Taiwanese workers, potentially leading to operational and cultural issues. Second, the two companies have distinct production process ecosystems that require significant adjustments for Intel staff. Lastly, work cultures vary significantly between Intel and Taiwan Semiconductor, requiring Intel staff to adapt to new expectations, including being on-call outside of regular hours.
Citi maintains a Neutral rating for Intel despite ongoing debates over its foundry strategy. Danely reiterates his opinion that the company should focus on its core microprocessor activities rather than expanding into the foundry industry.
Intel’s foundry business has seen $4.5 billion in sales, mostly from internal chip manufacturing. To expand, Intel aims to produce chips for Amazon and is investing in artificial intelligence chip manufacture. However, this space faces intense competition from Samsung and Taiwan Semiconductor, with Taiwan Semiconductor holding a significant lead in AI processor production.
The company’s Arizona-based facility is reportedly discussing a partnership with Nvidia to produce Blackwell GPUs at the location.
Source: https://finance.yahoo.com/news/citi-analyst-skeptical-potential-intel-145025597.html