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Intel Corporation Message Board

  • ideal_invst ideal_invst Jan 18, 2013 3:51 PM Flag

    Do analysts really think that Intel's capital spending is without solid basis?

    Due to its erstwhile focus on high-performance chips, Intel has taken a couple of years to extend its product line to include low-power processors which involved extremely complex design, and process, and manufacturing challenges. This has been the challenge for Intel for the last 2 to 3 years, which it has overcome with Medfield/Clover Trail+.

    But for this market transition, Intel's management has demonstrated continuously that it has a seasoned team that is capable of estimating future volumes and planning production around it. I find it very absurd that analyst firms think that these decisions may be whimsical on Intel's part and are concerned about Intel's capital spending levels.

    On the contrary, I think the huge capital spending outlay for 2013 is an indication that there are huge design and customer wins (both for own x86 production and foundry) in the pipeline. CEO, Paul Otellini is the previous conference call Q3-2012 had indicated that some of the customer wins have not been announced due to the difficulty in transitioning from foundries to Intel - some of which may be for smartphone manufacturers transitioning from ARM to x86.

    On its part, Intel should shed some of its conservativeness and provide more information to the investing community on its customer and design wins.

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    • Do analysts really think that Intel's capital spending is without solid basis?

      There is this BIG noise/stink about Intel increasing capex and nobody really knows what's going on.
      $2 billion are allocated to 450 mm which means it's NOT used to add capacity.
      Intels capex that actually results in (added) capacity is flat - but the media is repeating the same chit over and over again.

      Three months ago....
      In response to end-demand softness, Intel as expected is reducing its 2012 capex "pretty significantly" to $11.0B-$11.6B, a full billion dollars below its trajectory a month ago. CFO Stacy Smith reiterated the reasoning: reign in utilization to clear out inventory until demand recovers, and keep reusing existing equipment in its 14nm node efforts. "We are taking down utilization in the factories down to sub 50% again to take inventory out and free up the opportunity to move both space and equipment and redirect that to 14nm," noted Smith. He specifically declined to issue a forecast for 2013 capex, saying it will depend on unit growth and visibility into 2014 -- but "right now we want to fight through a Q4 where we don't have a lot of visibility before we lock in on a 2013 number."

    • How about THUNDERBOLT??? New investments?

    • As mentioned earlier, analysts are spreadsheet wonks. They don't run Fortune 500 companies and they don't understand what it takes to compete in the big leagues.

      Intel is committed to keeping its process advantage to;
      1) Maintain market dominance in its traditional markets,
      2) Achieve strategic advantage over its competitors in everything mobile,
      3) Produce enough volume to serve the largest device makers in a global market, and
      4) Produce product in volume with price advantage over its competitors while maintaining its enviable 60% gross margins.

      These are all very good reasons to continue their plan and investments.

    • Unfortunately, I seriously suspect market manipulation by MMs and institutions. Intel is a proven entity and shll be for a long long time. Hang in, longs...

      Good week-end, all...

      Sentiment: Buy

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