{"id":25981,"date":"2023-06-22T10:15:05","date_gmt":"2023-06-22T14:15:05","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/why-intel-was-the-dows-worst-performer-for-a-second-day-in-a-row\/"},"modified":"2023-06-22T10:15:07","modified_gmt":"2023-06-22T14:15:07","slug":"why-intel-was-the-dows-worst-performer-for-a-second-day-in-a-row","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=25981","title":{"rendered":"Why Intel was the Dow\u2019s worst performer for a second day in a row"},"content":{"rendered":"
\n

Intel Corp.\u2019s stock fell for a second consecutive session Wednesday, and was again the worst performer in the Dow Jones Industrial Average, after the chip maker laid out plans to compete against third-party fab giant Taiwan Semiconductor Manufacturing Co.<\/p>\n

Intel\u2019s
\n INTC,
\n -0.69%<\/bg-quote>
\n shares, which had been down about 2% before a late-morning event with Wall Street analysts started, closed down 6% near daily lows at $32.90. <\/p>\n

\n

That gave the stock the dubious distinction of being the worst-performing Dow
\n DJIA,
\n +0.12%<\/bg-quote>
\n component for a second session in a row, with Salesforce Inc. shares
\n CRM,
\n +1.56%<\/bg-quote>
\n Wednesday\u2019s second-worst, posting a 3.4% decline. Intel stock has fallen 9.5% in the past two days. On Wednesday, it was also the worst performer in the S&P 500 Index, with Advanced Micro Devices Inc.
\n AMD,
\n +0.55%<\/bg-quote>
\n second-worst, down 5.7%.<\/p>\n

For its part, the Dow finished Wednesday down 0.3%, compared with a 2.7% fall by the PHLX Semiconductor Index
\n SOX,
\n +0.53%<\/bg-quote>,<\/span>
\n a 0.5% decline by the S&P 500 index
\n SPX,
\n +0.17%<\/bg-quote>,<\/span>
\n and a 1.2% decline by the tech-heavy Nasdaq Composite Index
\n COMP,
\n +0.46%<\/bg-quote>.<\/span>\n <\/p>\n

Intel Chief Financial Officer David Zinsner told analysts earlier Wednesday that the chip maker will start giving its manufacturing business its own profit and loss statement beginning in the first quarter of 2024 as it moves to become competitive in the third-party fab sector.<\/p>\n

While Zinsner laid out the goal of being the \u201csecond-largest external foundry by\u00a02030\u201d with its Intel Foundry Services, or IFS, business, and forecast being the \u201csecond-largest foundry next year, with manufacturing revenue of greater than $20\u00a0billion,\u201d Intel has yet to name a major customer that would pose a challenge to TSMC
\n TSM,
\n +1.60%<\/bg-quote>,<\/span>
\n and said it hoped to name one by the end of the year.<\/p>\n

As a way of enticing customers, Intel said it was providing more transparency into the performance of its manufacturing arm versus its product business.<\/p>\n

\u201cManufacturing will begin to generate a margin,\u201d Zinsner told analysts during the event. <\/p>\n

Intel margins have been under fire since they have fallen well below the\u00a051% to 53% range that Zinsner promised more than a year ago. In its April earnings report, Intel reported gross margins of 38.4%, down from 53.1% in the year-ago period.<\/p>\n

Read:<\/strong> Intel stock drops as foundry capacity buildout plans have one analyst predicting a company split<\/p>\n

Intel said it will have a more \u201cexhaustive\u201d meeting on IFS in the second half of the year. Intel reports second-quarter earnings in late July. <\/p>\n

Read: <\/strong>Intel\u2019s first major contract foundry customer still a mystery as analysts sift through presentation<\/p>\n

Intel uses its own foundries \u2014 or fabs, those high-tech plants that create the silicon wafers onto which transistors are etched to make microchips \u2014 unlike other chip makers that are \u201cfabless,\u201d like Nvidia Corp.
\n NVDA,
\n -0.07%<\/bg-quote>,<\/span>
\n AMD and Apple Inc.
\n AAPL,
\n +0.84%<\/bg-quote>.<\/span>
\n Those companies use third-party fabs like TSMC for their chips.<\/p>\n

Read First Take:\u00a0<\/strong>Intel confirms it will be a long slog for its foundry business<\/p>\n

Following the event, analysts wondered whether Intel could hope to take significant market share in the third-party foundry space, which promises to be a long slog for investors.<\/p>\n

Earlier Wednesday, before the event, Intel announced it would sell a roughly 20% stake in its IMS Nanofabrication GmbH business to Bain Capital for about $4.3 billion.<\/p>\n

From last week: <\/strong>Intel\u2019s stock rocks best week in nearly 14 years as analyst notes a \u2018material AI opportunity\u2019<\/p>\n

On Tuesday, Intel confirmed reports from over the weekend that it was building new foundry capacity in Germany, Poland and Israel. <\/p>\n

Since Chief Executive Pat Gelsinger took over the reins of Intel back in 2021, one of his aims has been to build out fab capacity and take some share from TSMC in third-party foundry work through IFS.<\/p>\n

Read: <\/strong>TSMC stock gains on report that Nvidia AI-chip order has boosted production<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Intel Corp.\u2019s stock fell for a second consecutive session Wednesday, and was again the worst performer in the Dow Jones Industrial Average, after the chip maker laid out plans to compete against third-party fab giant Taiwan Semiconductor Manufacturing Co. Intel\u2019s INTC, -0.69% shares, which had been down about 2% before a late-morning event with Wall […]<\/p>\n","protected":false},"author":1,"featured_media":25982,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-25981","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nWhy Intel was the Dow\u2019s worst performer for a second day in a row | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Intel Corp.\u2019s stock fell for a second consecutive session Wednesday, and was again the worst performer in the Dow Jones Industrial Average, after the chip\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=25981\" 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