Robert McDonald's  Instablog

Robert McDonald
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FROM INSIDE SILICON VALLEY: Sorting the truth or likely truth from the noise is a key attribute of the successful investor. My commentary is a distillation of some of this effort relative to particular stocks and investment areas. My publishing at this point in time is limited to the blogsphere,... More
    Jan 27, 2013 11:50 AM | about stocks: AAPL, TSM, INTC, QCOM

    If Intel is going to be successful in mobile they will be a viable competitor for Apple's chip business. They now have a golden opportunity.

    Apple is in the process of pulling all of its current ARM based A series microprocessor manufacturing out of Samsung for competitive and copying reasons. The credible rumors, rumors that provide specific detail including trial runs, the process technology to be used and a possible US Fab, say Apple is well on its way to moving to the TSMC foundry using their 20 nm process technology.

    I would not be buying Intel until this situation is clarified. If they cannot get Apple's business now or in the near future, then there is something wrong with Intel's viability in the mobile business,. They can do this in two ways and ideally both.

    I would ask why are they not being discussed as an alternative foundry to TSMC, the foundry that is rumored to be the beneficiary of Apple's movement out of Samsung?

    And why are they not being discussed as a downstream provider of a next generation high performance processor that Apple would migrate to in future products. Apple would then be leaving it ARM based A series processors it designs behind putting Intel into the cat birds sear. Intel'sTrigate 22 and 15 nm process technology is at least one generation ahead of competitors, it consumes 50% less power and now can potentially include an LTE radio on board the chip. This provides a true system on a chip solution (SOC) that could potentially eliminate the need for a separate QCOM broadband processor with radio capability.

    If Intel does not get this business in one form or the other it is a strong warning that Intel has cost, commitment or flexibility issues which they can little afford at this point in time.

    Disclosure: I am long AAPL, QCOM.

    Stocks: AAPL, TSM, INTC, QCOM
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