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Rating game: Apple confirms it's one of TSMC's first customers in Arizona, while Intel prepares to return to the forefront in 2023

Apple’s Tim Cook confirmed at an event that the company is one of TSMC’s first fab customers in Arizona, while Intel hopes to join TSMC by the end of 2023.

Cook says Apple AAPL, -2.54% will buy chips made as TSMC expands into US President Joe Biden’s visit, TSMC confirmed Will increase investment in Arizona from $12 billion to $40 billion and build a second silicon wafer fabrication plant in Phoenix.

Meanwhile, Apple shares closed down 2.5% for the day, while the Dow Jones Industrial Average fell 1%. ADR TSMC TSM, -2.52% fell 2.5%, while PHLX Semiconductor Index SOX, -2.36% fell 2.4%, Nasdaq COMP, which is dominated by technology stocks, -5.15% closed down 2%, the benchmark S&P 500 SPX, -1.44% down 1.4%.

Benzinga reports that Nvidia Corp. NVDA, -3.75% Also a customer in Arizona. Nvidia shares down 3.8%

On Tuesday, UBS analyst Timothy Arcuri, who has a neutral rating on Intel, said bringing in a major customer for the chipmaker’s first affordable chip was “key” Manufacturer profits stifle transformation. Currently, underutilization of Intel’s foundry capacity has negatively impacted Intel’s gross margin by about 300 basis points in December, a situation that could continue into March, he said. Intel INTC, -1.95% The share price closed down 2%.

Last year Intel stopped using the nano name for its chip, breaking with the convention since 1997 of using nanometers, or “nm,” to denote the size of each transistor on a computer chip, with the general rule being that smaller transistors are faster and more efficient. The “A” stands for Angstrom, which is one-tenth of a nanometer, which means that the transistor size of the 18A, which is planned to be launched in early 2025, will be comparable to TSMC’s planned 2nm architecture.

READ ALSO: The end of the single-chip wonder: Why there are huge fluctuations in the valuation of Nvidia, Intel and AMD

18A is also considered to be where Intel catches up with TSMC in cutting-edge technology. Before CEO Pat Gelsinger returned to Intel, the company revealed in July 2020 that its 7nm chips would be delayed by defects, while rival Advanced Micro Devices Inc. AMD, -4.55%, With TSMC as the foundry, 7nm chips have been launched last year. AMD shares fell 4.6% on Tuesday.

Arcuri said the 18A node is a “key fulcrum in the manufacturing narrative” and Intel expects to sign at least one major foundry customer in 2023, likely in the second half of the year.

“Customer adoption of the 18A node will be a good milestone,” Arcuri said. “Intel expects to announce more customer adoption of 18A early next year.”

Arcuri said Intel expects to complete its $5.4 billion acquisition of Israel’s Tower Semiconductor in the first quarter of 2023 and believes it will is “in part the reason for the reported departure of Randhir Thakur, the current head of Intel’s Foundry Services.” – Revenue in the fourth quarter of 2023 will be “not better than seasonal” compared to the fourth quarter of 2022, with analysts polled by FactSet expecting $14.67 billion.

Mizuho desk analyst Jordan Klein noted that Zinsner agrees that investors should use the 5% to 7% MoM decline as a seasonal starting point heading into 2023. With that translating into a drop to as high as $13.64 billion, Klein said investors are “ignoring” the current consensus of $14.38 billion, “suggesting that those are all over the weight and worry.” Intel shares closed down 0.8% on Monday. %.

Regarding TSMC, Klein said that neither Biden’s visit to China nor the news was a stock market event, nor was it a game-changing event.

“There was speculation before today, basically in the next 3 to 5 years, which will come from TSMC’s total global capex budget,” Klein said. If anything, he said it was a “modest positive” for chipmaking equipment suppliers like ASML Holding NV ASML, -1.29%, KLA Corp. KLAC, -1.37%, Applied Materials AMAT, -1.62% and Lam Research Corp. LRCX, -2.10% . Stock ends trading down 1% to 2% .



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