Chip ‘Manufacturing Issues’ Cited As Intel Shares Downgraded By Goldman Sachs To Sell

Goldman Sachs says that Intel is facing a big problem with the issues in technology for manufacturing chips.

The repeated delays in graduating itself to the manufacture of next generation chip process technologies resulted in the lowering of the rating for Intel by Goldman to sell from neutral.

“We see Intel’s struggles with 10nm process technology having ramifications in terms of its competitive position – across a broad set of products,” analyst Toshiya Hari said in a note to clients Friday. “While the 10nm push is well-publicized at this point, we believe Intel’s manufacturing issues could potentially be deeper-rooted than what most think and could have a sustained impact on market share and/or spending levels as Intel competes with a growing/stronger TSMC eco-system.”

Following the downgrading of the shares by Goldman, there was a drop of 2.5 per cent in the stocks of the company. so far this year, the shares of Intel has risen by 8.6 per cent in comparison to a 6.7 per cent increase in the S&P 500.

A 12 per cent downside to the last price stocks was noted as Hari reduced the price target for Intel stocks from $49 to $44.

The recurring delays in Intel’s attempts to graduate to the 10 nanometer chip process was noted highlighted in the note by the analyst. Compared with the launch of AMD’s 7 nanonmeter products’ slated to be held later this year, last month Intel announced that it would not be until holiday 2019 that it would be bale to launch its 10 nanometer chips.

One nanometer equals one-billionth of a meter. Faster and more power-efficient chips are being able to be built by chipmakers historically because of smaller nanometer chipmaking technologies.

“Note any slowdown in the Enterprise spending environment (although this is not our base case view) would also add to the earnings decline we forecast in 2019,” Hari said.

There were no specific comments on the development available from Intel. However, the company’s spokesperson referred to a statement that was made by the company’s executive vice president Navin Shenoy at its Data Centric Innovation Summit last Wednesday:

The statement read: “I don’t talk to customers about nanometers, what they care about is delivered system-level performance. Our job is to deliver a consistent level of improvements in performance year after year after year. The roadmap we laid out to them several quarters ago and the one we shared today does exactly that.”

(Adapted from


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