Notes

Intel Corporation is an American multinational corporation and technology company with headquarters in Santa Clara, California, in Silicon Valley. The company is the world’s second largest semiconductor chip manufacturer and the processor supplier for computer system manufacturers such as Apple, Dell, HP, and Lenovo. Intel was founded in 1968 and went public in 1971 trading at $23.50 per share. The stock ticker is INTC and the common stock is traded on the NASDAQ Global Select Market. Intel delivered outstanding 2018 fourth quarter earnings and revenue reports.
Intel holds many strengths, but one that is unique for their market share is the loyalty shown by people and companies to having Intel processors. The logo ‘Intel Inside’ is also an insignia of reliability and quality that raises prices on products with the logo. Intel also has a growing revenue stream from the data-centric business units. In 2018, Intel had $70.8B in revenue, a 13% jump over 2017’s $62.8B mark. The guidance given by the company signaled higher revenue for 2019 as a whole. Intel’s continued innovation and strong manufacturing capabilities gives the company a small edge over market share competitors such as AMD, NVIDIA, Micron, and Qualcomm. While Intel’s 2018 revenue was buffered by an increase in prices, the quality remained a selling point compared to AMD and NVIDIA that suffered due to a decline in crypto mining. While Intel has continued revenue growth, the company relies on a few key markets like China, Taiwan, Singapore, and USA to sustain the growth rate. Intel is also very dependent on computer brands utilizing their chip technology for revenue. This is also an opportunity for Intel. Growing their own computing brand, vertical integration, will let Intel rely less on other brands giving them a steadier money flow. The digitization of the supply chain and the capital for acquisitions, like the recent takeover of Mobileye, gives Intel the opportunity to expand the name brand, create new revenue channels, and grow at a faster rate. However, regulations and legal issues plague the technology industry especially with the concerns of artificial intelligence growing. Regulations have tightened and more laws being passed loom over Intel. If the company does not manage to quickly fall into line, the fines and penalties will cause issues on the brand and the marketing campaign. Competition has never been as fierce until recently as well. The cryptocurrency market brought AMD and NVIDIA back and even though the crypto market has slowed, the two companies managed to take hold of a market share and put their names back out there. Intel does have the advantage of the recent patent legal issue between Qualcomm and Apple. The company has a chance to swoop in stealing Qualcomm’s deal and replace the Snapdragon processing units with Intel 86 phone versions instead. Intel powers the cloud and computing industry with their massive name recognition, quality and reliability, and innovation and shift from just PC centered to data centered. However, Intel is still struggling to adapt as quickly as the competition and is not generating new revenue channels as fast as it is attempting to grow.
Intel’s lack of new revenue channel generation is slowing revenue growth from 2018 to the predicted 2019 levels. With only another one billion added to revenue over the year by Intel’s guidance, this poses a poor outlook for growth. The gross margin for Intel is also predicted to decrease indicating less overall profit for the tech company. Intel is in prime position to capitalize on a volatile semiconductor market by reintroducing processors at a cheaper price. The infrastructure and marketability of the company would let it cut prices and sell more units forcing its major competitors that are less marketable to also slash prices and loss income. Intel also has a major opportunity to steal Qualcomm’s deal with Apple and create a new phone processing chip that may make major companies such as Samsung swap over. Intel should also continue expanding the computing units and complete their shift towards data-centric revenue giving them a unique place in the tech market.