Intel: World-Class Financial Engineering

Aug. 30, 2022 11:20 AM ETIntel Corporation (INTC)NVDA, TSM143 Comments
Arne Verheyde profile picture
Arne Verheyde
9.66K Followers

Summary

  • Intel has announced a new program to reduce the capital burden of building fabs, called SCIP.
  • Essentially, SCIP allows Intel to build two fabs for the price of one.
  • The catch is that only one fab’s profit will go to Intel, to other’s goes to Brookfield. There is no free lunch.
  • As such, the program does not seem to benefit shareholders at all long-term.
  • While the CHIPS Act handouts in the U.S. and E.U. should be more effective forms of financial engineering, Intel will need real engineering to restore its former glory.

Entrance of The Intel Museum in Silicon Valley.

JHVEPhoto/iStock Editorial via Getty Images

Investment Thesis

Despite some distractions like the financial engineering discussed here, overall Intel (INTC) stock remains heavily impacted by two near-term issues: the recessionary and post-COVID decline in PC demand and the lingering process

This article was written by

Arne Verheyde profile picture
9.66K Followers
With an engineering background, looking for companies with expertise to be well-positioned for growth and leadership.

Disclosure: I/we have a beneficial long position in the shares of INTC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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