Intel INTC, has been the king of servers, desktops and laptops. However, despite a massive effort, it has had a limited success in mobile, especially at Apple AAPL. For a semiconductor manufacturer, the biggest prize is to get into iPhone 7.
Earlier today, Bloomberg published an enticing headline, ‘Intel Gets Chip Order From Apple, Its First Major Mobile Win‘. The headline is indeed enticing. Does this make Intel stock a buy?
Let us start by examining the performance of a number of semiconductor stocks, Nvidia NVDA, MaxLinear MXL, Qorvo QRVO, Qualcomm QCOM, Broadcom AVGO, and semiconductor-equipment manufacturer Applied Materials AMAT.
Please click here for the chart comparing semiconductor stocks this quarter.
You will notice from the chart that Intel has not performed well.
The big prize?
The big prize is the CPU that will go into iPhone 7. As enticing as the headline is, Intel did not win the big prize. Apple designs its own CPU based on RISC Architecture from ARM Holdings ARMH. Traditionally, Apple outsources manufacturing of the CPU to Samsung SSNLF, or Taiwan Semiconductor TSM.
Intel has been trying hard to win Apple’s business to manufacture the CPU chip, the foundry business in the industry lingo. If and when that news comes, it will be a big deal, and Intel will become a buy….Read more at MarketWatch
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