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Intel’s Stock Slides Again
Intel Corporation, a leading chip maker, witnessed a second consecutive drop in its stock price on Wednesday, making it the worst performer in the Dow Jones Industrial Average for two consecutive sessions. The decline followed Intel’s announcement of plans to challenge Taiwan Semiconductor Manufacturing Co. (TSMC), a major third-party fab giant.
Intel’s shares closed down 6% at $32.90, representing a 9.5% decrease over the past two days. This downward trend also affected the S&P 500 Index, with Intel ranking as the poorest performer, while Advanced Micro Devices Inc. took the second spot.
During an event with Wall Street analysts, Intel’s Chief Financial Officer, David Zinsner, revealed the company’s strategy to enhance its competitiveness in the third-party fab sector. Intel plans to provide a profit and loss statement specifically for its manufacturing business as it aims to become the second-largest external foundry by 2030. Zinsner also expressed the company’s intention to secure a major customer by the end of the year. In an effort to attract customers, Intel emphasized the increased transparency it would offer regarding the performance of its manufacturing arm.
Intel’s move comes as the company faces challenges in its margins, which have fallen below the promised range of 51% to 53%. The chip maker reported gross margins of 38.4% in its recent earnings report, down from 53.1% in the same period last year. To counter these issues, Intel plans to hold a more comprehensive meeting on its Intel Foundry Services (IFS) business in the second half of the year. Additionally, the company confirmed plans to establish new foundry capacity in Germany, Poland, and Israel, reflecting its commitment to expanding its fab capabilities.
With its CEO Pat Gelsinger at the helm, Intel is intensifying its efforts to strengthen its position in the chip market and challenge TSMC’s dominance. By focusing on the IFS business and enhancing manufacturing margins, Intel aims to carve out a larger share of the third-party foundry work. The company’s second-quarter earnings report, scheduled for late July, will likely provide further insights into its progress and future prospects.