Sources at Intel's LTD development site in Ronler Acres outside of Portland report - Several of these process modules lack the requisite process characterization and process control to provide economically viable yields". The Finfet transistor design isn't "manufacturable" with the lithography process we are using. CD control on the gate oxide and super fine pitch interconnects have a process capability index of 4.1 sigma which essentially means - 15% of the transistors are "out of spec". The other foundries require a minimum 5.5 sigma level of control so they can get viable yields which mean only 2% of the transistors are outside process tolerances. TSMC yields are 220% better for their equivalent version of Intel 4.
The foundry industry as a whole is over building semiconductor capacity by 24%, but Intel's "most likely to be the one left holding the bag"
One source in Ireland stated, "Ronler has thrown a big bag of dog sh__ over the fence and didn't meet 30% of the criteria for tech transfer"
Intels 2025 capacity utilization will be less than 40% as capital depreciation will skyrocket from $4B/qtr to $8.5Billion/qtr. Reports from Intel's supply chain folks are that, "We've dropped the demand forecast by 38% over the past year and are showing an uptick in mid 2025, but we have very little visibility to the true demand". As such Gross Margins will likely dive from $4.3B/qtr to $2.4 to $2.8B/qtr.
None of the big fish - i.e. Nvidia, AMD, Broadcom... have any confidence in big blues ability to deliver on time. After over a decade of false promises that everything is "On Track", none are willing to risk partnering with Intel.
Moreover neither the developers nor the foundry customers have confidence they'll be able to deploy Intel 3, 2 and 18A in adequate volume. Consensus statements from developers and foundry customers are - "We can't sell VAPORWARE!"
Gross Margins will continue to decline and stay under 40% forcing a need to cut back headcount by 15 to 20%. Traditionally Intel had +60% margins.
On the internal demand front....Intel lacks the low level software and tools to enable rapid deployment of AI solutions. As such they have a dirth of developers willing to commit the time and energy required to adopt Intel's inadequate AI technology. Lisa Su at AMD has come to this realization and is buying out a small AI software company.
We expect Intel shares to drop another $9 to $10/share once they are forced to come clean about the true state of "Intel 4" and their AI efforts. Another $40B class action lawsuit is very likely...