“I think we may have underestimated the learning rate—when you have a technology that adds many more masks, as 14[nm] did...it takes longer to execute experiments in the fab and get information turned, as we describe it," Bohr said, when asked what went wrong. "That slowed us down more than we expected and thus it took longer to fix the yields. But we’re into high yields now, and in production on more than one product, with many more to come later this year.”
Bohr said that Intel’s pilot 10nm manufacturing line is running 50 percent faster than the 14nm line in terms of major steps per day, which will keep Intel’s 10nm development on track.
A new and very in-depth research report from UBS makes the case that while end-demand is still solid for smartphones, data centers and automotive applications, industrial and PC demand is slowing. The analysts also point out that wearables and applications for the Internet of Things are too early in development to make a huge difference. While they do like some additional chip companies internationally, only four based in the United States are rated Buy. They are Intel Corp. (NASDAQ: INTC), Micron Technology Inc. (NASDAQ: MU), Nvidia Corp. (NASDAQ: NVDA) and SanDisk Corp. (NASDAQ: SNDK).
Intel recently introduced the company’s fifth generation processor. The chip giant’s commitment to smartphone and mobile applications, combined with the resurgence of PC growth last year, made it one of the best large cap value stocks to buy in 2014, and the same outlook can drive the stock this year. Intel trades at less than 15 times forward earnings, a very reasonable multiple for investors looking for growth.
The UBS team points out that recent system-on-chip (SoC) development issues Intel has experienced were largely execution related and they believe, after some changes, that is behind the company. They also continue to see upside potential in the chip giant’s shares driven by the combination of a now-stable PC market, strong growth in DCG, improved profitability in mobile and a very large share repurchase plan
Intel shareholders are paid a very solid 2.8% dividend. UBS has a $41 price target on the stock, while the Thomson/First Call consensus price target is posted at $37.17. Intel closed Wednesday at $34.26 a share.