You might have heard about Intel's tri-gate (or 3-D) 22-nanometer chips, but few actually understand the importance of this development. MIT's Technology Review, one of my favorite tech blogs, dubbed it one of the 10 most important technological milestones of the past year. Why? The electrical current in a 3-D transistor has virtually no leakage, allowing for lower-power operation in a smaller space with superior performance. As anyone following the Intel-vs.-ARM battle knows, power efficiency has been a key reason for the latter's mobile success.
No other chipmaker has similar designs in the works -- ARM's most advanced designs now entering production are 28 nanometers -- and Intel Architecture Group VP Steve Smith recently told Forbes that current-gen 32-nanometer Atom chips are already within spitting distance of ARM architecture in terms of power use. Other chips suffer increased power leakage as transistor gate widths shrink, which poses significant hurdles for all of ARM's designs going forward.
If the tri-gate works as intended, its minimal leakage (and, thus, superior power efficiency) could be an insurmountable obstacle for chipmaking rivals and thus ensure Intel's future dominance of the mobile space.
A generational lead in chip technology is a tremendous advantage, and Intel has the added bonus of being the last fully vertically integrated chipmaker left standing. Sean will mention (spoiler alert!) Intel's server-chip dominance, and Travis has pointed out that the company's renewed its Wintel tag team to make mobile inroads. New system-on-a-chip designs play to Intel's fabrication strengths as well and will be vital in capturing mobile market share when they roll off the production line. To sum up, there are a number of compelling reasons to invest in Intel now (including that Treasury-trashing dividend yield), and few reasons to stay away.
[Few understand the importance and of those that do none are on Wall Street. American investors have become a bunch of moaning bottom-feeders who are incapable of research and therefore attempt to rely totally on the doom and gloom momentum play. The current disconnect is solid evidence of the sheer numbers of boneless bears who have become addicted to trying to feed off of the country's economic woes. Well, it's time to throw the deadbeats under the bus. If you can't make a contribution to economic recovery, then get the hay out...]
Everything you say is correct but the message will appeal mainly to those with a deep enough understanding of the technology to appreciate the long term consequences. That will exclude the majority of professional money managers who will sit on the sidelines until their inside sources give them the heads up about Intel's design wins.
In the interim, it creates favorable investment opportunity for the technically astute.
I would not be surprised if Intel actually comes in at over $3 EPS this year rather than 2013 due to this huge fabrication process lead using trigate technology. Market will be surprised though. Stock obviously has once again become extremely cheap. I'm buying as fast as I can get the money transferred to my account. This latest drop with most of the techs could be due to the hype on buying Facebook stock as well.
I think that Intel themselves will crank up the buyback action at current levels. I'm not too hopeful about Warren Buffett's actions anymore. He just doesn't understand technology.