Intel (INTC) and ASML Holding (ASML) have strengthened their long-running collaboration as they look to enhance semiconductor lithography technology, in the development of smaller and more functional semiconductors. The push comes at a time when smartphones and other appliances are becoming smaller, thus fueling demand for smaller semiconductors.
Intel is a U.S. company that manufactures and sells microprocessors, chipsets, and flash memory. It also deals in products and platforms for computing and storage networks. Intel’s upcoming earnings report for Q4 2021 is scheduled for January 26, 2022. INTC shares fell 2.08% to close at $53.62 in January.
Intel Purchase
The purchase of the extreme ultraviolet (EUV) production system aligns with Intel’s ambitions to deliver lithographic improvements. Additionally, the purchase should lead to reduced costs and cycle time, and the energy needed to enhance scaling.
Working closely with ASML should allow Intel to stay at the forefront of lithography technology. According to the company’s Executive Vice President and General Manager, Dr. Ann Kelleher, they stand to harness High –NA EUV resolution with the collaboration, to come up with even smaller transistor features, which is a game-changer in the semiconductor industry.
Analysts’ Take
Last week, KeyBanc analyst John Vinh downgraded Intel stock to a Hold from a Buy. According to the analyst, Intel as one of the best blue chip stocks has limited catalysts to steer the stock higher, given the missteps over the last several years. According to the analyst, the company is still far off to become a leader in the design and manufacturing of products as part of its integrated device manufacturing (IDM) 2.0 model.
Consensus among analysts is a Hold based on 6 Buys, 12 Holds, and 7 Sells. The average Intel price target of $55.17 implies 2.89% upside potential to current levels.
INTC scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations
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