Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

Intel Corp’s shares fell 7% on Friday as Wall Street analysts raised concerns about how soon the chipmaker can close the gap with rivals as it spends billions of dollars to increase manufacturing.

In recent years, Intel has struggled with building new manufacturing technology causing it to fall behind rivals Advanced Micro Devices Inc and Nvidia Corp in the race to make smaller chips with a faster processing speed.

Patrick Gelsinger, who returned to the company as CEO this year, has announced plans to spend as much as $20 billion to build two factories and open its factories to other chip makers and advance chip manufacturing capacity.

Story continues below advertisement

“There are significant issues that must be overcome if this is to be a success, with investment ahead of time and profits unlikely until after 2025 if not later,” Atlantic Equities analyst Ianjit Bhatti said.

“In the near term (2-3 years), we do not believe that Intel has an answer to AMD’s market share gains.”

On Thursday, Intel announced its second-quarter profit forecast that fell short of analysts’ average expectation. The company’s Chief Financial Officer George Davis told Reuters that the lower profits were because the company was investing in ramping up its new 10-nanometer and 7-nanonmeter manufacturing technologies.

Gelsinger has also announced plans to make chips for car plants at its factories to help alleviate a global chip shortage that has hit the automotive industry.

Analysts were largely on the sidelines; 26 of the 40 covering the stock have a “hold” or lower rating. Fourteen analysts have a “buy” or higher rating on the stock. The current median price target on the stock is $65, as per Refinitiv data.

“The shortage...is going to require spending on a mammoth scale for chipmakers. Spending that Intel can ill-afford as it attempts to reclaim its title as the most valuable chipmaker in the U.S.,” said Samuel Indyk, senior analyst at uk.Investing.com.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies