By Adam Clark
Intel's boost from the appointment of its new chief executive proved to be short-lived. But news that it has hit a key milestone in its new chip-manufacturing process could help get the company's stock moving again.
Intel shares were down 0.7% at $21.89 in premarket trading on Wednesday. That was set to add to a 6% loss over the previous five trading sessions, which leaves the stock close to where it was before a surge induced by the announcement of new CEO Lip-Bu Tan last month.
However, there could be another catalyst on the horizon. Intel executives said on Tuesday that it has begun "risk production" on its new 18A chip-manufacturing process, speaking at the Intel Vision conference in Las Vegas.
That means the company is now doing low-volume testing of its manufacturing before scaling up to bigger volumes. Intel has said its 18A process is poised to give it a technological lead against rival Taiwan Semiconductor Manufacturing.
The key questions now are the timeline and what customers Intel has lined up. The company intends to start manufacturing its own next-generation Panther Lake processors on its 18A process in the second half of this year.
"The 2H [second half] roll-out of Panther Lake seems to be a necessary milestone to hit, in order to get volumes ramping and is a key timeline metric we now know to watch," wrote Stifel analyst Ruben Roy in a research note.
Roy kept a Hold rating on Intel stock with a $21 target price. While producing Intel's own chips will provide some validation for its costly chip-manufacturing efforts, the real test will be whether it can attract significant external customers for the 18A process. Nvidia and Broadcom are running tests on the process, Reuters reported previously.
Investors will be hoping to hear more on that topic at the company's Foundry Direct Connect event on April 29, where it is expected to give more details on its turnaround strategy.
Write to Adam Clark at adam.clark@barrons.com
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April 02, 2025 08:20 ET (12:20 GMT)
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