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TheStreet Open House

Intel Must Play Catch-Up Now

NEW YORK ( TheStreet) -- It's been a nice ride for investors of Intel (INTC) who bought shares in late February after they'd fallen from above $23 in mid-January to nearly $20.

That 13% decline, in retrospect, was a terrific buying opportunity. Since late February shares rose to Tuesday's intraday high of $25.98, which equates to a nearly 30% gain if you were fortunate enough to have purchased it at $20.10.

The most recent stock-price-boosting hype surrounds Intel's newest mobile chips. Public announcements at the Computex conference in Taiwan that Samsung will use Intel's processors to power a version of its Android tables lifted shares almost 8% from the mid-day low last Friday.

Now it's time for cooler heads to prevail and to reconnect to the here and now. Having recently read a revealing cover story in the Sunday business section of The Oregonian newspaper with the catchy title "Intel's Choreographer" I realize the INTC exuberance has gotten a little ahead of itself.

The article revolved around an interview with Rani Borkar, the multi-talented vice president and general manager of Intel's Architecture Development Group. Up to the exciting news that Samsung will use Intel's 1.6-gigahertz dual-core processor in its 10.1-inch Galaxy Tab 3 tablet beginning next month, INTC had almost no presence in either the tablet or smartphone markets.


With the PC and laptop markets waning, INTC has been putting the pedal to the metal to play catch-up in creating competitive microprocessors that can compete with Apple's (APPL) preferred microprocessor company ARM Holdings (ARMH). The problem is that INTC is still far behind in this semiconductor race.

"What I told people is we've got to run fast," Borkar told the newspaper concerning Intel's daunting challenge. "If one shoe is missing, don't wait. We have got to run fast. We will figure that out as we go."

This tells investors about two important factors regarding INTC: It's been awakened and knows it has a do-or-die mission it must complete quickly, and it's flying by the seat of its pants and running a race even "if one shoe is missing."

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