Analyst Note| Abhinav Davuluri, CFA |
On Aug. 13, Intel hosted an Architecture day at which it highlighted key updates to its chip architectures, new GPUs, packaging technologies, and other areas. While the market has been preoccupied with Intel’s recent announcement related to its 7-nanometer process delay, we haven’t been as quick to claim Intel’s competitive demise. We were glad to see Intel depart from the “+” nomenclature of its process technology iterations, dubbing its latest 10-nm offering “SuperFin,” which includes a redefined FinFET transistor that enables the largest intranode enhancement Intel has ever achieved (off the initial 10-nm process). The initial products made on this process include its upcoming Tiger Lake laptop processors and low power Xe GPU. The Tiger Lake family will be critical to enabling Intel to fend off AMD advances in the laptop CPU realm, with CFO George Davis claiming the firm expects to regain share in the second half of 2020 as a result of this release. We are maintaining our $70 fair value estimate for wide-moat, negative moat trend Intel. Despite competitive and manufacturing headwinds, we remain positive on Intel’s scale in cloud computing and opportunities in automotive, 5G, and artificial intelligence, and we think long-term investors should find current levels attractive.