The manufacturer of microprocessors Intel collapsed this Friday in the first hours of listing on Wall Street more than 16% for the poor reception that the delay announced this Thursday in the development of the new generation of chips built in 7 nanometers (nm).
In the second quarter results presentation this Thursday, Intel indicated that its 7nm chips, more compact than the current ones, suffer a delay of six months and they won’t be ready until, at the earliest, 2022.
This made investors nervous, seeing Intel’s hegemony jeopardize against competitors like AMD.
In the last 24 hours Intel $ 25 billion was left on the road in market capitalization, while AMD, which already markets 7nm chips, it rose 11 percent in the first hours of trading.
$ 25 billion less. (Reuters)
Bank of America lowered Intel’s stock valuation on Friday morning “buy” from “neutral”, with a target price of $ 62, below the previous $ 70.
The unexpected delay in the departure of its new generation of 7nm chips put the negative note to a second quarter results with a 23% increase in net profit and a 20% increase in income.
10th generation: Intel bets on its new architecture at 7nm, but with delay. (Intel)
The delay in the chips 7nm seems to replicate delays of more than two years in the market launch of the current 10nm chips, which casts doubt on the company’s long-term competitiveness.
Intel CEO Bob Swan said Thursday in a call with analysts that there are “no fundamental obstacles, but we are investing in contingency plans to protect ourselves against uncertainty.”
The battle in the background: the smaller the better
AMD Ryzen, AMD’s 7nm processors. (AMD)
The fight for “nanometers” is a discussion that Intel has with AMD, its main competitor, for a long time.
“10nm” is the metric that Intel uses to manufacture its processors that were released in the fourth quarter of last year, while “7nm” refers to the process on which AMD’s processors and Apple’s A12X chip are based.
What a nanometer measures is the number of millions of transistors that make up a processor. The smaller the measurement, the less space it takes up. The less space it takes not only consumes less energy but they are also more efficient because they generate less heat.
AMD, A historical competitor of Intel who has always struggled to overcome, already works on a more efficient technology than Intel, who has long been expected to jump to 7nm and then to 5nm.
Wall Street, with a tough day by Intel and Apple; Microsoft on the rise
Bad day for the markets. (AP)
It was not a good Friday for Wall Street to open. The Dow Jones Industrial Average main index lost 0.46% to 26,530.49 points, the Nasdaq technology index fell 1.74% to 10,279.59 points and the expanded S&P 500 index fell 0.72% to 3,212.25 units.
“The US stock market continues this morning its decline on Thursday with mounting friction between the United States and China, after the Asian giant ordered the closure of the US consulate in Chengdu, “said analysts at Charles Schwab.
However, it was not just the NY Stock Exchange that was affected. The main European stock markets opened this Friday with falls due to the rise in tensions between Washington and Beijin, the outbreaks of the coronavirus epidemic and some negative macroeconomic indicators, especially the rise in US unemployment benefit claims.
In the spirit of investors, the progress in the development of vaccines against the virus, the business results in the US – which are exceeding expectations – and the possibility that new stimuli are approved in that country weigh less.
Microsoft, one of the winners. (Bloomberg)
Microsoft, on the other hand, within the technological ones, showed an immense growth: it closed its fiscal year 2020, which ended on June 30, with record profits and income Despite the coronavirus pandemic, which led him to close all of his physical stores but in turn favored the demand for cloud computing, his most successful business.
The technology giant co-founded by Bill Gates in 1975 and currently led by executive Satya Nadella increased its net profit by 13% in the last twelve months and reached $ 44,281 million, while its turnover increased almost 14%, to 143,015 million, in both cases exceeding the maximum data from the previous year.