Replies to post #142524 on Intel Corp (INTC)

[Unkwn]

I do not share your pessimism.

Before you write Intel off keep in mind that Samsung has to divide its
process R&D and capex three ways - DRAM, flash, and logic. Intel only
has to push logic. Micron pushes the other two and carries the risk and
the costs associated with them.

Also keep in mind who Samsung has as its dominant logic customer. Intel
makes delicious margins on most of its chips. Dealing with big fruitco, I
bet Samsung execs feel lucky just retaining their family jewels after every
negotiation.

Oh, I am not pessimistic about Intel/Micron either. Samsung isn't strong enough to fully replace them and also is not willing to pay the price for this journey (low margins in their semiconductor business for years). But, Samsung is straight on the way to surpass Intel in semiconductor sales as the world's biggest semico. That's not a big issue for Intel and Micron, but I think it is for TSMC and certainly Globalfoundries, since Samsung seems to do a lot better when it comes to competition in the foundry space compared to Intel.

Regarding 10nm, you can take the bet. No significant process lead for Intel at 10nm anymore, also not regarding time to market. The lead at 14nm is already thin (not so much compared to TSMCs 16nm process).

Samsung's Capex is going into memory as well, that's correct. Micron's Capex this year should be around 3 billion I guess, so that is still quite below Samsung's 15 billion in 2015. Here's an interesting overview of 2015 semiconductor Capex. But Intel together with Micron is not far away, but I still doubt it is enough to keep a lead, especially since Samsung is already leading in memory process tech (DRAM and NAND).

Regarding margins, no, Samsung's semiconductor business doesn't largely depend on Apple. Samsung sells a lot of mobile phones and they are fully vertically integrated, much more than Apple. They keep almost all the margin, from process to phone/tablet. They nowadays mostly exclusively use their own processors instead of Qualcomm and the likes in their high end phones. That's good business. In addition, I expect them to get more and more foundry business from TSMC customers other than Apple, since they have a lead there. Intel is slow regarding foundry, really slow.

Anyway, as I said, I am not bearish on Intel at all, but Samsung is valued a lot cheaper and I think it will soon have the number one spot in global semiconductor revenue (including memories). Intel and Micron are no bad investments by any means and I am still invested there. Not so sure about the future of TSMC and Qualcomm though. They'll face a tough future I guess.