Intel (INTC) - Get Intel Corporation (INTC) Report Chief Executive Pat Gelsinger said Tuesday that the semiconductor stalwart planned to build new chip-making factories in Europe, investing up to $95 billion.
The executive discussed the investment at an auto industry conference in Munich, according to The Wall Street Journal. A global chip shortage has hampered companies around the world.
Intel intends to build two new chip facilities in Europe and could expand from that, bringing the total spend to as much as 80 billion euros, or $95 billion, Gelsinger said, according to The Journal.
Intel’s stock recently traded at $53.52, little changed.
Morningstar analyst Abhinav Davuluri puts fair value for the company’s shares at $65.
“On July 26, Intel held an event detailing its process and packaging technology roadmaps through 2025,” he wrote.
“Beyond the detailed roadmap, Intel altered its process nomenclature to better align with industry naming. For Intel Foundry Services, the firm announced Amazon Web Services (AMZN) - Get Amazon.com, Inc. Report and Qualcomm (QCOM) - Get QUALCOMM Incorporated Report as future packaging and foundry customers, respectively.
“We think the process roadmap looks compelling as it includes annual performance increases, EUV [extreme ultraviolet] lithography adoption for 2023 products, and a new transistor structure for 2024.”
Still, “Intel faces considerable execution risk, while Taiwan Semiconductor (TSMC) remains ahead with more [extreme ultraviolet lithography] experience,” Davuluri said.
“This endeavor to regain process performance leadership by 2025 will be fraught with potential setbacks, but we do concede the shift from FinFET transistors to the next iteration (gate-all-around) could be an inflection point that allows Intel to revive its process competitiveness.”