Intel may get some foundry business from Nvidia.
----------------
http://blogs.barrons.com/techtraderdaily/2015/03/25/nvidia-may-use-intel-to-make-some-chips-says-rbc/

For you anything goes. If you are not interested in investing in
intel, it is your prerogative.

This will happen sooner or later. Question is when Intel will make money on these. First it needs to eliminate its losses. We will find out next month how much losses it has eliminated.

Interesting headlines to catch attention
--------------------
What Ends First - Intel's Stock Buybacks Or Mobile Strategy?
Mar. 23, 2015 2:14 PM ET | 4 comments | About: Intel Corporation (INTC), Includes: QCOM
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary

In 2014 Intel returned $15 billion to shareholders in the form of buybacks ($11B) and dividends ($4B). Total cash burn was $3.1B.
The mobile division incurred a $1.1B loss in Q4 as it has been buying market share to expand into mobile devices.
Cash and trading assets declined from $18B in 2012 to $14B in 2014.
If the mobile division keeps bleeding cash, Intel may have to shutter its mobile strategy or buyback program.
Companies usually embark on an expansion strategy or a share buyback program, but Intel (NASDAQ:INTC) is attempting to do both. The company's attempt to gain market share in mobile devices has been a strain. In July Intel outlined plans to add another $20 billion to its existing share buyback program. However, going forward, the company's mobile strategy or buyback program may have to go.

Mobile Strategy Is Creating A Financial Strain ...

Intel missed the mobile device trend. To catch up, it has been subsidizing the cost incurred by tablet makers for shifting away from chips licensed from ARM Holdings PLC (NASDAQ:ARMH). In effect, it has been buying market share. In Q3 2014 the company was the second largest supplier of tablet system-on-chips with 19% market share. Apple (NASDAQ:AAPL) was first with 30% share and Qualcomm (NASDAQ:QCOM) was third with 14%. However, its mobile division had negative revenue of $6 million and an operating loss of $1.1 billion.

The company's XMM 7360 4G baseband modem is rumored to be included in 2016 iPhone units in certain markets, possibly supplanting Qualcomm. Building a relationship with Apple could potentially be a coup for the company. However, the crowd believes that even if the rumors are true, the deal would merely be addition by subtraction:

Assuming that Intel were to win Apple's business for its Cat10 LTE modem for the emerging markets in 2016 (Asia and Latin America), it would be immaterial to its profit margin since (according to rumors) Intel is willing to sell the LTE modem to Apple at cost. However, this will hurt Qualcomm's earnings, so indirectly it would benefit Intel (addition by subtraction).

Share Buybacks Are Reducing Cash Balances ...

While Intel has been fighting a war on the mobile front, it has been giving money back to shareholders in the form of dividends and share repurchases.



In 2012 the company generated positive cash flow of $3.4 billion. Total cash out flows were $2.8 billion and $3.1 billion in 2013 and 2014, respectively.
Dividends have consistently been about $4.4 billion during the review period. However, stock buybacks were $4.8 billion, $2.1 billion and $10.8 billion in 2012, 2013 and 2014, respectively.
Intel returned over $15 billion in 2014 in the form of buybacks and dividends. That level may not be sustainable long-term.
Meanwhile, the company's liquidity has declined from $18 billion in 2012 to $14 billion in 2014.


How big of a war chest the company needs to sustain itself has yet to be determined.
And It Could Get Worse

Intel's bread and butter remains its PC client group which represents about 60% of its revenue base. However, growth in PCs has been stagnant. 2014 PC client group revenue grew about 4% Y/Y and according to the Gartner Group, PC vendor unit shipments in Q4 2014 grew about 1% to 84 million, versus 83 million in the year-earlier period:



In mid-March Intel lowered its first quarter revenue projection from $13.7 billion to $12.8 billion due to weaker demand for business desktop PCs and [ii] lower than expected inventory levels across the PC supply chain. The estimate assumes zero growth in comparison to revenue of $12.8 billion and $12.6 billion in Q1 2014 and Q1 2013, respectively.

Conclusion

Cash burn from expansion into the mobile market, in addition to share buybacks and dividends, has caused Intel's cash and short-term securities to decline from $18 billion in 2012 to $14 billion 2014. This is less than Qualcomm's $18 billion, which it wants to compete with. Furthermore, revenue from its PC client group is expected to remain stagnant. If its mobile division continues to burn cash Intel may have to shutter its mobile strategy or buyback program. I currently have a hold rating on the stock.

Yes. My mistake. It is annual revenue of $2B+. And yes it is not broken down by software and hardware.
Software revenue of Windriver is not that much. Intel does have a lot of embedded business which is counted towards IoT group.

Unless every one has forgotten, Intel IOT business is more than $2B in the past quarter and it was extremely profitable.

Can TSMC Close The Gap With Intel?

By Shuli Ren

This blog can’t have enough of Taiwan Semiconductor Manufacturing (2330.Taiwan/TSM), the world’s largest contract chip manufacturer.

Much of the debate lately is how much of the next-generation iPhone A9 chip business Apple (AAPL) will divert to TSMC’s chief competitor, Samsung Electronics (005930KS/SSNLF). On the technology front, Samsung is exerting very strong competitive pressure on TSMC in the 14/16nm node.

TSMC has been working hard on the next step, the 10nm node. Its management has said that 10nm would begin to make money late 2016. Leapfrogging Samsung is obviously one reason why TSMC is pushing for 10nm. But the company has also stated that its 10nm will close the technology gap with Intel3, “suggesting the ambition to get a slice of the lucrative PC market,” noted Bernstein Research‘s Mark Li and David Dai.

So how is TSMC doing on the 10nm node?

Not very well. According to the Bernstein analysts, TSMC was surpassed by Intel (INTC) on transistor density at 14/16nm node because TSMC’s 16nm is not a full shrink from 20nm, i.e., not a true technological development. To transition to 10nm, TSMC will have to reduce its transistor area by about 70%, “the most aggressive shrink in the history.” Good luck!

As such, “we forecast TSMC’s transition to 10nm will take 1.5 years at the earliest, and that it won’t be able to completely close the gap with Intel,” noted Bernstein.

Here are some more details:

Despite the elevated R&D intensity, we forecast 10nm won’t generate significant revenue for TSMC until mid-2017 and the transition from 16nm to 10nm will take ~1.5 years at the earliest.

Meanwhile, the recent slides from INTC indicate INTC is planning to have an aggressive shrink in 10nm too, while maintaining the 2-year cadence. We hence don’t think TSMC can catch up with INTC entirely, although narrowing the gap is possible.

In light of the history in 14nm, Samsung may offer two versions of 10nm as well. The first version (i.e. 10LPE) will be earlier, followed by a later version, 10LPP. 10LPE likely will have lower specifications but may be ready slightly earlier than TSMC’s 10nm. 10LPP, on the other hand, will arrive later but will deliver more compelling features.
http://blogs.barrons.com/asiastocks/2015/03/16/can-tsmc-close-the-gap-with-intel/?mod=BOLBlog

Who is the left in this business? TSMC, Samsung and Intel and some smaller companies like UMC, SMIC but why would Samsung or TSMC buy GF. They have their own fabs and processes optimized. Yes, if GF gives them away and some money, then some one will come along.

That is what I was thinking but the drop of Euro against $ is too steep to protect against that.
But the main thing is demand. If european have to buy in $ then it has to come up with a lot more money. eventually you are limited to budget and will end up buying less.

Intel talks ‘SoFIA’ At Mobile World; Could Boost Tablet Biz, Says Wells

By Tiernan Ray

Shares of Intel (INTC) today rose 81 cents, or 2.4%, to close at $34.06, amidst a mixed bag of commentary from the sell side.

Nomura Equity Research‘s Romit Shah, who was at Intel’s presentation at the Mobile World Congress today, has a Neutral rating on Intel’s shares, but nevertheless offers up some of the optimistic news from CEO Brian Krzanich — specifically, the formal unveiling of plans for Intels’ “SoFIA” modem and apps chip for tablet computers:

At MWC, Intel announced the launch of its 5-mode Sofia LTE solution for tablets, phablets, and smartphones. Intel indicated that 20 companies including ASUS, Jolla have selected the Sofia platform. In addition, Intel also announced its 14nm x5 and x7 Atom SoCs (formerly code-named Cherry Trail) for tablets and 2-in-1s. Intel also announced its Cat 10 LTE thin modem supporting LTE connectivity from smartphones to PCs. ? Intel also sees good progress in reducing mobile losses by $800m this year. Key drivers being smaller BOM differential in Sofia LTE and lowered investments in mobile due to partnerships with Rockchip and Spreadtrum. Intel indicated that it expects to use its own process technology to build the next gen Sofia LTE, which we expect to be launched in 1H16.

Intel has said that SoFIA is among parts that will help it stem huge losses in tablets.

One fellow who believes that is David Wong of Wells Fargo, who has an Outperform rating on Intel shares, noting today that data out Friday from research firm Strategy Analytics suggest Intel is gaining ground in chips for tablets.

Apple’s (AAPL) iPad, which uses Apple’s own chips, slipped to 26% of the tablet market in 2014, noted strategy analytics, down from 32.6%, and Samsung Electronics (005930KS), which uses some of its own chips in its tablets and some from Intel and others, slipped to 17% from 18.3%, the firm reports.

They both lost ground to “white box” tablets running other chips, perhaps many of them running Intel parts. White box tablets rose to 29% of the market from 24% a year earlier, ” via entry-level and ultra-low priced Tablets in emerging markets and as holiday promotions in developed markets,” said Strategy Analytics.

With Intel’s progress already, Wong thinks new parts such as SoFIA will help Intel gain more share while reducing its losses:

Our guess is that Intel will take action to limit tablet processor growth in low end tablets during the first half of 2015 as its Bay Trail and Cherry Trail tablet processor products still require subsidies when used in low end tablets. o However, we expect that in the coming week, Intel will launch its first SoFIA products. SoFIA is a family of tablet and smartphone processors (with integrated modems) that will not require any subsidies when used in low end tablets. o We think that the first SoFIA chips might ramp into volume in tablet products in 2H15. o In the next few months we also expect Intel and Rockchip will launch SoFIA-based chips jointly designed by the two companies, targeted at the Chinese tablet market. o We think that Intel’s will maintain its tablet processor market share in the 16-20% range in the first half of 2015 and then begin to show renewed share momentum in the second half of 2015 and through 2016. o We believe that by the end of 2016 Intel’s tablet processor revenues could have grown to several hundred million dollars per quarter, from being negative in the December 2014 quarter. We discuss Intel’s tablet and smartphone chip dynamics and products in more detail in an Intel note dated Feb 11, 2015.

It appears from this interview or news that Intel is about 12-18 months away from catching up in smart phones. Though no details.
===============
http://www.cnet.com/news/intel-takes-the-wraps-off-its-new-mobile-chips-series/

It is very strange that he will question every down movement but will ignore all up movement.
He questioned it yesterday why Intel is down. He is questioning it now why it is down in AH markets. But ignored what was happening all day.

I highlighted a couple of lines about progress on 10nm.

Intel: Moore's Law will continue through 7nm chips

Mark Hachman
@markhachman Feb 22, 2015 12:00 PMe-mailprint
Eventually, the conventional ways of manufacturing microprocessors, graphics chips, and other silicon components will run out of steam. According to Intel researchers speaking at the ISSCC conference this week, however, we still have headroom for a few more years.

Intel plans to present several papers this week at the International Solid-State Circuits Conference in San Francisco, one of the key academic conferences for papers on chip design. Intel senior fellow Mark Bohr will also appear on a panel Monday night to discuss the challenges of moving from today's 14nm chips to the 10nm manufacturing node and beyond.

In a conference call with reporters, Bohr said that Intel believes that the current pace of semiconductor technology can continue beyond 10nm technology (expected in 2016) or so, and that 7nm manufacturing (expected in 2018) can be done without moving to expensive, esoteric manufacturing methods like ultraviolet lasers.

Why this matters: The discussion is anything but academic. This year marks the 50th anniversary of Moore’s Law, Intel founder Gordon Moore’s axiom that transistor density doubles about every eighteen months. In the real world, that’s meant that the silicon chips that power PCs, phones, servers and more can run faster and consume less power as they move from generation to generation every two years or so.

The process to make silicon chips is complex—an Intel primer on the subject details some of the steps—but the gating factor is light itself. Chips are etched out of silicon using light, and chip makers have to wrestle with the wavelengths of light itself to continue to eke out new improvements. If the industry collectively fails to do so—or fails to do so cost-effectively—chip improvements will halt.

intel 10 nm challenges INTEL
Intel's diagram marks the improvements in cost and transistor size over the last few process generations.

Intel: 14nm "Broadwell" technology is back on track
Intel is on the cutting edge of silicon manufacturing, however, and Bohr’s role as its senior fellow of logic technology development carries weight. Intel will present five papers at ISSCC, three of them covering the current 14nm technology. It will also participate in the 10nm panel, where Bohr said he expects “spirited debate and discussion” on what the industry needs to do to get there.

Intel was already forced to delay its 14nm “Broadwell” chips by several months due to manufacturing issues, and hopes to avoid that during the 10nm generation.

“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.

That's good news for the majority of the PC market, which are powered by Intel's chips. But if the chip industry as a whole can eke out a few more years without radical changes in its manufacturing technology, that's even better.

The Price of Getting Apple's Attention: $12 Billion
Bloomberg By Tim Culpan
5 hours ago
????

(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. is locked in an investment duel with Samsung Electronics Co. to meet booming U.S. demand for Apple Inc.’s iPhone and other smartphones, benefiting electronics suppliers around the globe.

Taiwan Semiconductor, the world’s biggest custom-chipmaker, plans record spending on plants and equipment this year. It’s lavishing $12 billion on factories -- more than Intel Corp. has ever spent in a year -- to counter investments that Samsung is making to win chip orders from Apple, Qualcomm Inc. and its own handset division.

More from Bloomberg.com: Macquarie at 2008 High as Profit Seen at Upper End of Range

“The increase by TSMC is a response to Samsung,” said Samuel Tuan Wang, an analyst at Gartner Inc. in Santa Clara, California. While Suwon, South Korea-based Samsung is ahead for now in production technology, its Taiwanese rival “is moving aggressively.”

The spending is a boon for suppliers such as Applied Materials Inc. and Lam Research Corp. in the U.S. and ASML Holding NV in Europe, according to supply-chain data compiled by Bloomberg. Applied Materials, the largest maker of chip equipment, gets a third of its revenue from TSMC and Samsung. Globally, suppliers’ sales rose 19 percent last year to $38 billion and may jump 15 percent this year, estimates from industry group SEMI show.

More from Bloomberg.com: WTI Prices to Fall to $30 a Barrel: Szpakowski

The rush for smartphones, and the tools to make parts for them, is one reflection of economic growth prospects in the U.S. -- forecast to lead the G7 countries for the next two years -- and in China, where even reduced estimates of 7 percent expansion is about five times that of the euro zone. For the quarter that ended in December, Apple reported iPhone sales rose 46 percent to 74.5 million units, putting it just behind Samsung’s phone businesses at 75.1 million, according to IDC.

Arms Race
“That’s the No. 1 thing that drives our business, and it’s the key competitive battleground for our customers,” Applied Materials Chief Executive Officer Gary Dickerson said in an interview. “That battle is still playing itself out.”

More from Bloomberg.com: Noble Leads $1 Billion Share Drop as Reports Query Accounts

To keep enticing consumers, new phones need more powerful, and more power-efficient, brains. That’s where chipmakers come in, and why TSMC and Samsung are locked in an increasingly expensive battle to be first with new production technology.

By shrinking the circuit lines on semiconductors -- measured in nanometers -- manufacturers can improve chip capabilities or get more out of a production run. Modern plants cost more than $5 billion to build and equip and are obsolete in five years or less, so they need to operate 24 hours a day.

The tables can turn quickly. Samsung had been the supplier of the most important chip in Apple’s iPhone since its debut in 1997. That changed in the iPhone 6 with Apple’s A8 chips, which are manufactured by Hsinchu, Taiwan-based TSMC.

Samsung’s Bet
Now the South Korean chipmaker is trying to leapfrog TSMC in production technology to win the next round. UBS AG estimates Samsung made $3.7 billion in capital expenditures on its processor business alone in 2014 and may raise that to $4.9 billion this year. Samsung doesn’t disclose such numbers, but executives on a Jan. 29 conference call confirmed they will boost the spending this year.

“Samsung is in the lead because they’ve bet the farm on it,” said Len Jelinek, an analyst at IHS Corp. “They’ve had to.”

Founded in 1987, TSMC forged a business model that lets chipmakers like Qualcomm and Broadcom Corp. forgo expensive factories and outsource production of chips using their designs to facilities in Taiwan. Its annual revenue from the communications category more than doubled to $14 billion in five years, now accounting for more than half of sales.

For Taiwan’s biggest company, which gets an average of $8 in chip sales for every smartphone sold globally, keeping its factories equipped with the most advanced technology is important to compete with Samsung as well as other rivals including Globalfoundries Inc. and Intel, which recently entered the business of making chips for other companies.

Supply Chain
TSMC, Intel and Samsung’s processor businesses will account for around 60 percent of total spending on semiconductor equipment this year, according to Bloomberg calculations based on estimates from UBS and industry group SEMI.

Santa Clara, California-based Applied Materials gets about 21 percent of its revenue from TSMC and 12 percent from Samsung, according to the supply-chain data compiled by Bloomberg. Lam Research, based in Fremont, California, gets about 37 percent of its sales from the two Asian companies.

In 2014, share prices rose about 46 percent for Lam Research and 41 percent for Applied Materials, outpacing an 11 percent gain in the Standard & Poor’s 500 index.

Like Apple, other U.S. companies buy from, rather than sell to, TSMC. The Taiwanese company’s biggest customer is Qualcomm, a San Diego-based designer of mobile-phone processors and modems that accounts for about 22 percent of TSMC’s revenue. Apple makes up about 8.2 percent, the data show.

ASML Holding, based in the Netherlands, gets more than a third of its revenue from Samsung, with TSMC pitching in more than 8 percent.

Investment Risks
With Samsung and TSMC raising spending to add capacity, one of the two companies may be making bets that won’t pay off.

While TSMC is boosting spending by as much 25 percent this year from $9.5 billion last year, it’s forecasting only a 5 percent rise in chip-industry sales and 12 percent for the custom foundry business. That suggests it intends to win market share.

“We don’t build capacity on speculation,” Morris Chang, TSMC’s 83-year-old founder and chairman, told investors Jan. 15, predicting his company will outgrow the broader foundry sector by a few percentage points this year. “We build capacity when we know that it’s already sold.”

Expansion Plans
Samsung expressed similar confidence on a conference call with investors, saying its investment slated for the second half of 2015 “is already backed up by customers.” It dominates in memory chips, making it the world’s second-biggest semiconductor maker behind Intel. Because Samsung is also the biggest phonemaker -- therefore a direct rival to other potential customers -- it’s even more important for its production technology to be a must-have.

The big budget announcements by TSMC and Samsung haven’t yet translated into a flood of orders for chip equipment. Applied Materials said orders from foundries fell in the three months ended Jan. 25. The company expects that pattern to reverse in the second half of the year as the chipmakers work their way through the difficulties of shifting to more advanced production, Applied’s CEO said.

There’s another potential risk for chipmakers and, by extension, their suppliers. Apple wants to move production of chips for its phones to a so-called 14 nanometer process -- tighter circuitry than TSMC’s current 20 nanometers -- while other companies won’t need such advanced capabilities so quickly, according to Gartner’s Wang. With manufacturers building leading-edge capacity for so few clients, the result may be a glut of 14-nanometer capacity, leading to “fierce price competition,” he said.

Apple’s Chips
That would help boost profit at Apple, which spent $25.8 billion on chips last year, accounting for 7.6 percent of industrywide purchases, according to Gartner. The top two PC makers, Lenovo Group Ltd. and Hewlett-Packard Co., spent a combined $27.5 billion.

While Apple is the main prize, Samsung’s phone-making division, along with rivals like Lenovo and Xiaomi Corp., are looking for better-performing parts themselves as they try to take on the iPhone.

“All of these guys are racing to be on the leading edge of technology with their phones,” IHS’s Jelinek said. “TSMC are going to come forward and say we’re going to spend whatever it takes to win that next business. Right now they’re behind Samsung.”

All of you accept any response from David. Good luck. He wanted to throw it there for all of us to comments and defend Intel position.
He is a bearish on Intel.

But stock is doing well regardless. It gets a pass all the time.

I just don't like the tone of the headlines. Too much arrogance.
--------------------------------------------
Intel CFO: We're so far ahead, Apple's performance would be seriously hindered if it stopped working with us
Business Insider By Steve Kovach



AP Steve Jobs with Intel's then-CEO Paul Otellini in 2006.
In 2005, Steve Jobs made a historic announcement: Apple would start using Intel processors in Macs instead of chips it designed itself.

It was a shock because Intel was the biggest chip maker for PCs that ran Windows, and Microsoft was Apple's biggest rival at the time. (Now Apple and Google are enemies.)

But Apple was having trouble designing chips that could keep up with its ambitions for Macs and MacBooks, so it went with Intel. Macs have used Intel chips since 2006.

We're almost 10 years into Apple's partnership with Intel, and there's increasing talk that Apple will be able to start making its own Mac chips again in a few years. Apple already creates its own chips for the iPhone and iPad based on designs from ARM and then has manufacturers like Samsung build them.

The theory goes that eventually Apple's ARM chips will be powerful enough to run Macs and Apple won't need Intel anymore. There are also rumblings that some of Intel's new chips are coming out behind schedule, which means Apple has to wait on Intel before it can release innovative new products, like the new super-thin MacBook Air it's cooking up.

In an interview with Business Insider Thursday, Intel's CFO Stacy Smith brushed off those concerns. Smith said that Intel is so far ahead of the competition when it comes to PC processors that Apple (and just about every other PC maker) has no choice but to use Intel chips.

View gallery
.intel CFO stacy smith
Intel Intel CFO Stacy Smith.
"Apple is a great partner of ours," Smith said. "Like Intel they like bringing really cool stuff to the market ...As long as we're bringing great technology to the marketplace, we're enabling them to do great Apple products."

And it sounds like Apple will have to keep that partnership going for some time.

"Our leadership over the rest of the industry is extending," Smith said. "We're not delayed relative to the industry. We're actually ahead of the industry."

Basically, that means Apple needs to use Intel processors for now or risk losing a lot of performance in new Macs.

"For a customer like Apple you'd have to take a big step off performance to step off our architecture," Smith said. "That is what in essence enables us to win across different customers."

But the message is clear that US tax system is unfair for Intel to compete against Samsung and TSMC.

Intel CFO comments in interview to Bloomberg.
----------------------
Intel CFO: Obama Repatriation Tax Proposal ‘Lipstick on a Pig’
By Tiernan Ray

Intel CFO Stacy Smith visits Barron's offices, February 4th, 2015.
Intel CFO Stacy Smith visits Barron’s offices.
Intel (INTC) chief financial officer Stacy Smith was in New York Wednesday and was kind enough to stop by Barron’s offices for a chat.

One of the areas where Smith was most passionate was on the topic of President Barack Obama‘s proposal that U.S. companies pay a 14% tax to repatriate their overseas earnings.

Barron’s magazine executive editor Fleming Meeks asked Smith, “What do you make of President Obama’s proposal to allow companies to repatriate overseas cash at 14%. Do you think there’s any seriousness to that?”

Said Smith, “I’m from Texas, so I’ll use the Texasism: it’s kind of lipstick on a pig.”

Smith went on to say,

We need fundamental tax reform that helps companies like Intel that are big manufacturers. We are unique in that we do our highest-end manufacturing in the United States, by and large, that’s where our largest factories are. We need something that helps make us competitive on a worldwide stage. And if you look at it, we actually have tax policy that is punitive toward companies like us that create jobs in the U.S., that export outside the U.S., that manufacture in the U.S., and it makes us less competitive with a company like a Samsung [Electronics (005930KS)] or TSMC [Taiwan Semiconductor Manufacturing (TMS)], which are the people we compete with on a worldwide stage, because they have much more pro-business tax policies. So I think repatriation is one of the things that needs to be dealt with, but it needs to be dealt with in the context of a fundamental changing of our tax policy that helps companies that want to, in my opinion, do the right thing, create jobs in the U.S., and be competitive on a worldwide playing field.

Fleming pressed the point, asking “So, in the meantime, what do you do? You’re not just waiting for tax policy to change. In the meantime, what do you do with your cash overseas, etc.?”

What we do is run our business, at the highest level. We are somewhat unique in that we are a worldwide company, so we generate a lot of cash in the U.S., we generate a lot of cash outside the U.S. But because we build our own manufacturing facilities, we have uses for cash outside the U.S. So, for example, we have factories in Ireland and Israel and China, and so we take the cash we generate outside the U.S. and we invest it in factories we build outside the U.S.

Fleming did his best to press Smith even further about what Intel might do if it suddenly got a tax holiday, asking “Is that cash that could be invested here in the U.S.?” But Smith avoided answering directly what the company would do in such an event, instead replying:

We generate a lot of cash. If you just look at last year as an illustration, we generated $20 billion of cash from operations. We spend about $10 billion in capex, so even net of everything, we generated $10 billion of free cash flow. We generate cash in the U.S., we generate cash outside the U.S. In both of those cases we generate more cash than we need to invest in factories. So we are not cash-constrained is the short answer.

WD just announced-beat on earnings and revenues. It must be Seagate
issue only and not softness in the market as some analysts have concluded.

He is being sarcastic. His mind works like Seagate HDD and not like SSD.

Seagate earnings and its future forecast.

Here is some news on Intel downgrade today by one analyst and another analyst coming to Intel defense. Interesting tit bits.
----------------------------
Intel: RBC Rebuts JMP Server Worries; Possible Power Mgmt ‘Hiccup’
By Tiernan Ray
TAGS

Following a cut in rating on Intel (INTC) to Market Underperform from Neutral by JMP’s Alex Gauna this morning, RBC Capital Markets’s Doug Freedman comes to the stock’s defense, writing that any slowing that may exist is likely “a lack of supply of Grantley CPU power management solutions.”

Writes Freedman, who has a Sector Perform rating on Intel stock, and a $40 price target, Gauna may be right about some slowdown, but it’s not because demand is weaker, writes Freedman:

A competitor downgraded INTC/reported DCG growth stalling, driven by industry sources in the supply chain. We think that the direction could be accurate, but 1) it is not driven by a demand- related problem, and 2) it probably results in a 3 month delay and is caused by a technical problem in the custom server CPU power MOSFETs (pictures shown on pg. 3 and 4). Infineon claims a leading market share for Grantley power, and we are hearing from industry sources that Infineon has had difficulty building MOSFETs in the volume needed to support the Grantley ramp. We believe INTC shipped as many server chips as they could in the DecQ, and there was no inventory build.

Infineon (IFNNY), he notes, had supplied Intel with “MOSFETs” for power management for “Grantley” server chips, but is no longer supplying those and “has encouraged customers to redesign motherboards to accommodate competitor solutions,” according to Freedman’s “industry sources.”

While that’s a loss for Infineon, it could conceivably be a benefit to other power-management chip makers, such as Fairchild Semiconductor (FCS), Intersil (ISIL), Monolithic Power (MPWR), Maxim Integrated Products (MXIM), and Texas Instruments (TXN), writes Freedman. However, “the volume shift may not be large enough to materially affect any ‘winner’,” he adds.

Here’s his math on the market value at stake in those power chips:

If Grantley is 10-15% of server CPUs, maybe 1-1.5mil units were affected, meaning $10-$20mil of revenue for the market by our estimates. However, if we include memory power, we estimate the total increases to $40 in power management per board or up to $80m/qtr in market share shift that could result.

Here is the article from alpha. I am not sure you ar going to believe that. You can do your own analysis.
I have highlighted and underlined that particular line for you.
-----------------------------
Intel's Report Leaves A Slightly Sour Taste
Jan. 15, 2015 11:25 PM ET | 39 comments | About: Intel Corporation (INTC)
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary

Q4 revenues beat slightly.
Q4 EPS beat mostly due to low tax rate.
Q1 guidance a little soft.
Cash balance a slight worry for capital return fans.
After the bell on Thursday, chip giant Intel (NASDAQ:INTC) reported its fourth quarter and full year 2014 results. Overall, results were a little mixed. The company was slightly ahead of revenues estimates for Q4 but blew out the EPS number thanks to a low tax rate. Guidance for Q1 was a little light, and shares edged down in the after-hours session. Today, I'll analyze the company's results.

Fourth quarter results:

As I detailed in my Intel earnings preview, the company gave the following guidance for Q4:

Revenue: $14.7 billion, plus or minus $500 million.
Gross margin: 64%, plus or minus a couple of percentage points.
R&D plus MG&A spending: approximately $4.9 billion.
Restructuring charges: approximately $45 million.
Amortization of acquisition-related intangibles: approximately $65 million.
Impact of equity investments and interest and other: approximately $175 million net gain.
Depreciation: approximately $1.9 billion.
Tax rate: approximately 28%.
Full-year capital spending: $11.0 billion, plus or minus $500 million.
For the quarter, Intel announced revenues of $14.721 billion, slightly ahead of the consensus estimate for $14.7 billion. Gross margins came in at 65.36%, nicely ahead of Intel's forecast for 64%. This beat was mainly driven by higher platform average selling prices for the PC Client Group and Data Center Group microprocessors and chipsets. You can see the full gross margin analysis in the CFO commentary letter.

R&D plus MG&A spending came in at $5.039 billion versus the company's $4.9 billion forecast. These extra operating expenses were mostly due to profit dependent spending. Restructuring and amortization expenses were also a bit higher than the company's forecast. Overall, Intel had operating income of $4.453 billion, nicely ahead of the roughly $4.4 billion if you use guidance midpoints.

Further down the income statement is where things really took off. Intel had "other items" that totaled a $206 million gain, ahead of guidance for $175 million. Additionally, the company's effective tax rate came in at 21.42% versus guidance of 28%, thanks to the reenactment of the US R&D tax credit.

On the bottom line, Intel came in at $0.74 per diluted share, well ahead of the $0.66 that analysts were looking for. That's a tremendous beat, but a large share of that was due to the tax rate difference. If you put Intel's Q4 tax rate at the 28% that was guided to, EPS would have been roughly $0.68, two cents ahead of estimates.

Overall, this report was decent, although the headline numbers probably make things appear a little better than they actually were. While the gross margin number was strong, a lot of those gains were wiped out in operating expenses. Additionally, the other income items and much lower tax rate really helped the bottom line.

Other important Q4 items:

In the quarterly report, Intel detailed the following numbers regarding its business segments. Dollar values are in millions.



Q4 revenue growth was driven mostly by 25% plus growth in the Data Center Group. It is also important to note that the Mobile and Communications group racked up another $1.1 billion plus in operating losses. Getting this segment closer to profitability in 2015 is a key goal for Intel, although we probably will see some steep losses there. Intel's goal for 2014 was to ship 40 million tablets. On the conference call, management stated that 46 million were shipped, so the company blew past its goal.

Q1 guidance:

Intel provided the following details for the first quarter of 2015:

Revenue: $13.7 billion, plus or minus $500 million.
Gross margin percentage: 60 percent, plus or minus a couple of percentage points.
R&D plus MG&A spending: approximately $4.9 billion.
Restructuring charges: approximately $40 million.
Amortization of acquisition-related intangibles: approximately $65 million.
Impact of equity investments and interest and other: approximately zero.
Depreciation: approximately $1.8 billion.
Analysts were looking for $13.77 billion in revenues, so the top line forecast was a little light. The gross margin number is a big disappointment, especially when you look at things sequentially. If you use the midpoints of the given guidance, along with the full-year tax rate that I'll discuss later, you get an EPS number of 47.5 cents per share. This is using the Q4 diluted share count, and the Q1 number probably will be a little lower thanks to the company's buyback. Analysts were looking for $0.51 in EPS from Intel, so overall, this forecast is a bit light.

Gross margins seem to be the main culprit for this weak guidance, and that's mainly due to higher factory start up and platform unit costs related to Intel's new 14nm products. The 14nm node is the next generation of chips for Intel, and will help to power all sorts of devices. Intel has already started shipping devices based on the new platform, and the company recently announced a number of new 14nm products at the Consumer Electronics Show.

In the second half of 2014, Intel's gross margin guidance proved to be very conservative, so I'll be very interested to see how things shake out by the time the April report comes around. Basically, for every full percentage point (100 basis points) Intel deviates from its gross margin forecast, we should see a 2 cent impact on the bottom line (per quarter). If Intel can come in at 61% in gross margins for Q1, I think we can easily see an EPS print of $0.50 or above. If analyst estimates come down on this guidance, we'd see another beat in April.

2015 guidance:

We had a mini preview of what this year might look like when Intel held its investor meeting back in November, as the company provided the following initial details for 2015.

Revenue: Growth in the mid-single digits.
Gross margin: 62%, plus or minus two points.
R&D plus MG&A spending: Spending as a percent of revenue is expected to be down with spending of approximately $20 billion, plus or minus $400 million.
Capital spending: Approximately $10.5 billion, plus or minus $500 million.
At that time, the revenue forecast was quite decent. However, the gross margin forecast was a bit worse than expected, and the operating expense forecast seemed a little high. The capital spending number would have been a $500 million decrease over the 2014 projection at that time. Included in Intel's report was the following guidance for 2015:

Revenue: growth in the mid-single digit percentage points.
Gross margin percentage: 62 percent, plus or minus a couple of percentage points.
R&D plus MG&A spending: approximately $20.0 billion, plus or minus $400 million.
Amortization of acquisition-related intangibles: approximately $255 million.
Depreciation: approximately $8.1 billion, plus or minus $100 million.
Tax rate: approximately 27 percent.
Full-year capital spending: $10.0 billion, plus or minus $500 million.
The revenue, gross margin, and R&D plus MG&A spending numbers are all the same, although the wording changed slightly on the gross margin range. The company did also provide some extra details, although Intel did not provide a full year number for restructuring charges. Going into this report, analysts were looking for 4.2% revenue growth and $2.37 in EPS. The one interesting item to note is that the capex forecast was reduced by $500 million. Intel only used $10.1 billion on capital spending in 2014, a bit below the company's forecast for $11 billion.

One key takeaway is that the gross margin forecast for the year is a bit higher than the Q1 forecast. As I detailed above, the 14nm costs will impact the company early in 2015. Those costs should subside a bit as the year continues, improving gross margins later in the year. Intel's dividend raise also makes a lot of sense now, given the reduction in capital expenditures late in 2014 and into 2015. With the company not spending as much on capex, free cash flow improves, and thus the dividend was hiked by 6 cents.

Back in November, I outlined a plan for how Intel shares could get to $40 this year. As part of that, I determined that the company needed to get to $2.50 in EPS, and my above article gave some potential numbers on that. Unfortunately, using Intel's yearly guidance, and using 5% for revenue growth, I only get $2.39 at the moment. I was hoping for 63.5% in gross margins, so the 62% forecast obviously was a disappointment in my opinion. If Intel's gross margins for the year were to come in at 63%, holding all else equal, EPS would probably jump to around $2.47. I also used $100 million in restructuring expenses, and did not add any "other income" items in my forecast. Should Intel improve in either of those two areas, the company probably could get another penny or two in the bottom line. Intel analysts were looking for $2.37 in EPS, so the $2.39 number above is not weak, but I'm not sure it gets Intel shares to $40 unless the market has another big year in 2015.

Capital return update:

Intel spent $4 billion in the fourth quarter to repurchase stock, which I am sure pleased investors. The company also raised its dividend for 2015 payments, something investors have been waiting a few years for. One important item to note is that the company finished Q4 with just $2.1 billion listed in its US cash pile. The company spent $10.8 billion to repurchase stock in 2014, but investors probably should not expect the company to come anywhere near that in 2015 unless more debt is taken out or funds are repatriated. Free cash flow minus the expected dividend payments will not be enough to satisfy another nearly $11 billion in repurchases, not with the current US cash balance.

Final thoughts:

Overall, this report leaves you with a slightly sour taste. Revenues were barely above the analyst average, while the huge bottom line beat was mostly due to a tax rate issue. Guidance for Q1 also seemed to be a bit light, and investors probably shouldn't expect as much of a buyback in 2015. Intel shares declined in the after-hours session on this news, and that makes sense given the huge run over the last year. I would recommend Intel investors stay the course over the next couple of days, and I'll be back in another week or two after things settle down a bit.

You are repeating what negative analysts are saying. If the tax rate was high as before Intel will beat by $0.02.
You see it glass half empty and whereas other see it half full.
That what makes the market.

Some here are to obsessed with hatred for Intel that they are missing the investment opportunity Intel presented to all of us over the last 12 months or so.
Even today analysts were worried about depreciation amount what is being spent on cap-ex. Other were worried about Intel holding back some shipments to OEMs

In a investment world, market speaks loud and it has spoken big time today.

Here is some positive on Intel process technology lead.
-------------
Qualcomm: Drexel Cuts to Hold; Intel’s Process Advantage Threatens Mobile Chip Share

By Tiernan Ray

Shares of Qualcomm (QCOM) are down 50 cents, or 0.7%, at $70.88, in early trading, after Drexel Hamilton’s Rick Whittington cut his rating on the shares to Hold from Buy, and slashed his target to $75 from $100, writing that “process and competitive questions reduce visibility.”

In addition to unresolved legal issues for the company, such as the ongoing investigation by China’s government, Qualcomm faces heightened challenges from Intel (INTC), Whittington believes.

Intel’s semiconductor process technology overtakes that of contract chip makers such as Taiwan Semiconductor Manufacturing (TSM) that are tasked with making Qualcomm’s chips:

Intel moving quickly to 14nm Trigate, leading-edge Qualcomm parts are still coming out on 20nm planar processes, older ones on 28nm planar. Tier-one foundries slow to efficaciously ramp 14nm/16nm FinFET limit QCOM ability to reduce power consumption while upping performance Intel is also appears set on commoditizing low-mid-range LTE for incorporation in their mobile processor offerings, conjuring a price war. Intel looks to incorporate its lesser but increasingly capable LTE baseband into now essentially free, or even subsidized, app. processors.

Despite the risk to application processors, Qualcomm’s lead in the most advanced baseband processors remains “intact,” he writes.

This review should make chipguy happy. That is what he was looking for-better performance, better graphics, and low power.

That is one way to raise expectations and if not met trash the stock.

Intel was late with 14nm per original schedule but it seems that numerous SKUS have been released.
As far as yield is concerned, I think it is there now otherwise so many SKUS will not be released.
Independent validation by reputable sites will surely prove this over time.
At least that is how I see it.

Chipguy,
You are our resident expert on this topic along with some others.
This was a tick. Did Intel not achieve lower geometry and low power with this tick process? What were you expecting that you did not see.
It appears that die size significantly lower and Intel will get a lot more good chips per wafer. It appears these low power chips-come down from 15w to 4.5w range.
I would like to hear your technical explanation for this.
thanks.

This may affect Intel stock negatively-just may be.
---------------------
Intel: Many PC makers plan to skip desktop Broadwell PCs and wait for Skylake CPUs

Two Intel chips at the same time could sow PC confusion
121214 innovation

Intel
Mark Hachman By Mark Hachman Follow
PCWorld | Jan 5, 2015 10:57 AM PT
Intel CES 2015
LAS VEGAS—The more powerful the PC, the less important Intel’s Broadwell chip appears to be.

On Monday, Intel launched the Broadwell-U microprocessors for all-in-ones and traditional notebooks, representing the traditional Core i3, i5, and i7 parts that distinguish low, midrange, and high-end PCs.

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The problem for Intel and PC makers, however, is that Intel’s next-generation chip architecture, Skylake, is due to launch in the second half of 2015, according to Kirk Skaugen, senior vice president and general manager of the PC Client Group, at a dinner meeting at the Consumer Electronics Show here Sunday night.

Surface Pro 3: An amazing tool for digital photographers
That pinches PC makers, who will have to decide which chip architecture to focus their resources on. And where higher-end desktop and gaming PCs are concerned, hardware makers appear to be placing their bets on Skylake.

“It depends on... we have a multi-faceted roadmap, as you know. For traditional desktop towers, there’s not a lot of fifth-generation Cores,” Skaugen said. “So it’s Skylake.”

Why this matters: Gaming PCs have had to wait for the new Broadwell chips. And with Skylake looming on the horizon, it makes sense for vendors to try and sell Broadwell as quickly as possible. If PC gamers must wait for a quarter or two for a high-end part, why won't they wait a quarter longer for a Skylake chip? It might not be the best argument, but it's one that's apparently resonating with pinchpenny PC makers.


The Broadwell delay makes Skylake more appealing

Intel’s fifth-generation Broadwell chips take the same microprocessor design as the Intel fourth-generation “Haswell” Core chips and shrink it into a new 14-nm process. While the finer process is expected to boost performance by 22 percent in integrated graphics alone, manufacturing glitches during the process delayed production by several months. Intel’s follow-on chip, Skylake, will use the same 14-nm process as Broadwell but feature a redesign that will bring new improvements.

That means for now, “desktop” PCs may use mobile Broadwell chips inside them, indicative of the blurring between the two platforms.

“For these all in ones you see over here, they’re taking a mobile processor and putting it in an all in one,” Skaugen said, referring to a table of all-in-one PCs from various manufacturers. “For most of the OEMs, my guess is that 80 percent of their resources for the last six months have been on Skylake anyway. Because the fifth-generation [Broadwell] Core is a pin-compatible upgrade to the existing Haswell systems.”

Skylake, however, is not. And if PC makers are going to perform chassis redesigns to include Wireless Display (WiDi) and 3D RealSense cameras, they’re probably going to invest in Skylake, too, Skaugen said.

As for WiDi, Skaugen promised that it finally works now.

Also on the agenda: wireless charging

Intel’s chief executive Brian Krzanich is scheduled to speak Monday night at a keynote address at CES. Intel executives said the topics of his speech will be wearables, the user experience, and wireless charging. Without confirming specific names, Skaugen said that new wireless charging partners would be named, with 20-watt adapters—enough to recharge a Core M-powered tablet—going into production in the first quarter for between $150 to $200 apiece. Intel is part of the A4WP (Alliance for Wireless Power) consortium.

You wanted to buy at Intel. That will be your chance. You can get Intel today below $35.00 if you are willing to play options.
Sell Intel $35.00 Jan. 215 puts for $0.50+. That will give you Intel at $34.50 if assigned. If not pocket $0.50+ for next 10 days. That is 1.5% return.

This is the highest price target I have seen for Intel.
-------------------------
Intel: MKM Ups to Buy on Data Center Surge
By Tiernan Ray

MKM Partners‘s Ian Ing today raises his rating on Intel (INTC) stock to Buy from Neutral, and raises his price target to $45 from $40, as part of a broad overview of end-market conditions for semiconductors in 2015, with one of the main themes being the explosion in data traffic that requires more server processing.

“We likely kept our neutral rating (with positive bias) for too long,” writes Ing, “as PCs stabilized, data center improved, and INTC demonstrated a flexible approach to succeed in tablets and access existing China consumer channels.”

Now, Ing likes “the setup” for this year, he writes, as the data center explosion is “just getting started”:

In addition to the Grantley server refresh, there are a number of 3rd party catalysts for datacenter upgrades over the coming quarters. On July 14, 2015, Microsoft will officially end support for Windows Server 2003. In July 2014, Microsoft reported that there are 12 million physical servers running Windows Server 2003 globally. Additionally, in Q3 of 2014, Broadcom began sampling its StrataXGS “Tomahawk” switch solution to lead customers to enable higher data center switching bandwidth. Tomahawk (below) packs up to 2 Tbps of switching performance and likely ships in volume in 2016.

In also lauds Intel’s “flexible” approach to trying to succeed, eventually, in newer markets such as mobile devices:

INTC chose the path of least resistance to accessing fully developed channels in China. In 2016, we would not be surprised by other practical non-organic actions to scale up INTC’s MCG as it plays catch up. Recall in May 2014, INTC announced a strategic agreement with Rockchip, a fabless semi company focused on mobile-internet SOC solutions. Additionally, in September 2014 INTC announced a 20% stake (costing $1.5B) in the holding company of Spreadtrum and RDA, both of which are fabless. Spreadtrum develops mobile chipset platforms and RDA designs, develops, and markets wireless SOCs.

Ing lists Intel as one his four top picks for this year, along with wireless chip makers Skyworks Solutions (SWKS) Qorvo (QRVO), Avago Technologies (AVGO).Ing’s parting advice to semi investors is to tread carefully in 2014:

We suggest semiconductor investors pick their spots carefully. In 2014, the Philadelphia SOX index was up ~30% largely on earnings multiple expansion. Earnings power increased to a lesser extent than multiples, and is now ~6% below prior peaks from 2011.

Intel shares today are down 20 cents, half a percent, at $36.16.

Vuzix says received Intel investment for smart glasses
7:09 PM ET, 01/02/2015 - Reuters
By Noel Randewich

SAN FRANCISCO, Jan 2 (Reuters) - Vuzix Corporation said on Friday that Intel Corp invested $24.8 million in the company to speed up the launch of Internet-connected eyewear.

Intel bought preferred stock that is convertible into common shares equivalent to 30 percent of Vuzix, Vuzix said in a press release.

Rochester, New York-based Vuzix develops computerized, Internet-connected glasses and other video eyewear aimed at consumers, businesses and entertainment.

Intel officials were not immediately available for comment.

Intel, which was slow to launch chips for smartphones and tablets, is striving to be at the forefront of future trends in mobile computing and expand into new markets, including smart watches and other Internet-connected "wearables".

A month ago, Italy's Luxottica said it was joining forces with the US chipmaker to develop glasses that combine its top fashion brands with technology that could allow wearers to access information about their health or location.

Intel has also teamed up with watch retailer Fossil Group and fashion brand Opening Ceremony to develop wearable devices such as fashion bracelets with communications features and wireless charging. (Reporting by Noel Randewich; editing by Andrew Hay)

I know of few folks who work for Oracle. They are thankful to Uncle Larry(that is how it was put to me) for allowing them to keep investing in its own "T" and "M" series processors. It is planning to abandon x86 completely very soon.
Based on this article, that will further impact Oracle market share.
And Cisco will get the maximum benefits because of that.

Ronster,
That was not me. It was biginvestors. I am sure he got your response.

Seems like good news for Intel.
-------------------------------
Cisco overtakes Oracle in the global server market
Market Realist By Anne Shields
45 minutes ago
????
Key takeaways from Oracle's 2Q15 earnings (Part 4 of 13)

(Continued from Part 3)

Oracle loses its position to Cisco in server space
As mentioned in the earlier part of the series, Oracle’s (ORCL) good quarterly results have been rewarded with a major jump in share price. This led Oracle’s market cap to soar to $203 billion, and it became the fourth biggest technology company, replacing Intel (INTC). However, in the global server space, Cisco (CSCO) beat Oracle.

According to the IDC and Gartner, Hewlett-Packard led the $50 billion global server market in 3Q14. The company had a market share of 27%, followed by IBM (IBM) and Dell, both of which commanded 18% in this space. Cisco and Oracle held 6% and 4% market share, respectively.



Sun Microsystems acquisition marked Oracle’s entry into the enterprise server space
Oracle acquired Sun Microsystems in 2010 and entered the enterprise server and storage hardware business, which together forms the company’s enterprise hardware business. Through this acquisition, Oracle got hold of Sun Microsystems Java and Solaris-based software offerings. Instead of retaining its interest in low-margin x86 servers, Oracle reinvested Sun’s proprietary reduced instruction set computing (or RISC) microprocessor to Unix platforms.

Unix-based servers are facing a decline in demand
As the above chart shows, shipments of RISC/Unix-based servers have witnessed a steady decline, while x86 servers have managed to register a marginal growth owing to better performance at lower prices. As a result, it has been difficult for Oracle to register growth in its server business.

Again as the above chart shows, while the leading players are struggling in the server market, Cisco has managed to achieve year-over-year (or YoY) growth of more than 30% in the last four quarters. Although Oracle has managed positive growth, it is nowhere near Cisco’s growth. If Cisco continues to post such growth, Oracle’s server business will lose even more of its market share to Cisco.