Intel’s estimated fair value was maintained despite…

We’re not necessarily surprised that talks are taking place, as Intel is in the midst of a significant transformation that will likely include the shedding of additional assets and the internal division of its chip design and foundry businesses. However, a takeover by Qualcomm would not solve Intel’s fundamental problem of being at a competitive disadvantage in chip production to Taiwan Semiconductor Manufacturing Corporation 2330. We are not confident that ownership by Qualcomm would stop the bleeding in terms of regarding Intel’s stock losses vs. AMD’s AMD. either in server or PC central processing units.

If Qualcomm were to pay an unpalatable premium, then Qualcomm’s more stable chip and licensing businesses could bring additional cash into Intel to allow it to achieve its production aspirations, hopefully capped at Intel 18A in 2025. However , Qualcomm’s “added value” in this business could only come from fresh-eyed strategic analysis of Intel’s business, which may lead to a faster spin-off of Altera and/or Mobileye or a more aggressive design-change of Intel chips at TSMC. The latter move would again invite significant scrutiny, however, given the US government’s CHIPS Act awards to Intel and, more generally, the substantial geopolitical interest in the US and Europe to have high-end chip manufacturing on its shores.

Morningstar Key Values ​​for Intel

• Estimated fair value: $21
• Morningstar rating: 3 stars
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: Very High