Fitch downgrades Intel rating, it's almost junk

winjer

winjer

Member


Intel is learning that no matter how bad things are, they can always get worse. The beleaguered company has just had its credit rating downgraded by Fitch, placing Team Blue just two places above the dreaded junk credit status.

Fitch carried out an assessment on Intel that found the company was facing increasing challenges in maintaining demand for its products. It also noted the growing competition from the likes of NXP Semiconductors, Broadcom, Qualcomm, and AMD, many of which have stronger financial structures, though with weaker market positions.

Following the assessment, Fitch has downgraded Intel's credit status to BBB from the previous BBB+. That puts it just two spots above junk status, and is Fitch's lowest "investment grade" rating.
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For Intel to recover its previous credit rating, the company will require both stronger end markets and successful product ramps, along with net debt reduction over the next 12-14 months, Fitch wrote.

Intel falling behind in the AI race was also highlighted by Fitch. The credit agency said its AI strategy remains unclear and depends on a systems and software approach, an area where the company has traditionally been weak or absent.
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And to make things even worse....

wccftech.com

Intel is Reportedly Struggling With Its Next-Gen Panther Lake Chips, As The 18A Yield Rates Are Making It Difficult To Scale Production For Retail Launch

Intel's CPU chip ambitions are now at a stall, as a new report claims that Panther Lake production is facing difficulties.
wccftech.com wccftech.com

It seems like Intel's high-end CPU chip ambitions are now at a stall, as according to a new report, it is claimed that Panther Lake production is facing difficulties.

Intel's PTL Chips Are Seeing "Three Times Too Many Defects", Making Rollout Difficulty By Year-End
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Reuters has disclosed that the first Intel 18A-based product hasn't managed to reach the expectations of Intel when it comes to production volume, as a small percentage of PTL chips being made are satisfactory for customers, mainly due to insufficient 18A yield rates, and an overall slowed momentum of the foundry and CPU business. Panther Lake is expected to bring Intel back into business, but it seems like things are getting gloomy.
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Intel has a planned PTL launch for Q4, with volume eventually going up moving into Q1 of next year, but as of now, supply chain sources report that there's a stall with Panther Lake's progress, mainly due to little yield rate advancements with 18A. More importantly, only 10% of PTL chips made by the 18A wafer are up to the specifications Intel wants them to be at, which indicates that chip defects are massive right now. It is said that Panther Lake chips have "three times too many defects" for HVM, and this is a concerning situation.
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Can I buy some of the used equipment and setup in my backyard shed? :) You don't really need those clean suits right?
A little dirt never hurt anyone.
 
Magic Carpet said:
Can I buy some of the used equipment and setup in my backyard shed? :) You don't really need those clean suits right?
A little dirt never hurt anyone.
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Man this reminded me of the old Intel commercials way back that featured the people in the bunny suits. I feel like that had to be mid to late 90s? Who knows at this point, the years just blend beyond a certain point.
 
10 years ago the 4790k was stomping all over AMD's best offering and Intel seemed unstoppable.

Now it looks like they may struggle just to stay relevant going forward. The tech industry is ruthless.
 
Rosoboy19 said:
10 years ago the 4790k was stomping all over AMD's best offering and Intel seemed unstoppable.

Now it looks like they may struggle just to stay relevant going forward. The tech industry is ruthless.
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Intel's best bet is to do what AMD did.
Sell off their Fabs, to stop the bleed and use that money for R&D, to try to recover from this disaster.
 
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They are still up over 3% today. Weird. I am torn on this. I kinda like to see them fail because working for them was fucking abusive and awful, but we need a second desktop CPU designer and a leading edge US foundry is also not something we want to lose.
 
winjer said:
Intel's best bet is to do what AMD did.
Sell off their Fabs, to stop the bleed and use that money for R&D, to try to recover from this disaster.
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Not going to happen. One, Intel is run by idiots who only care about the current quarter and won't allow for Intel to embark on a long term plan for the future - this is why Gelsinger is gone. Two, the R&D would have to be in places Intel has no presence now beause of past incompetence, like ARM (They oncer had a great ARM chip, and abandoned it). The future isn't in x86 and Intel has basically nothing in all the places computing is going. They're Kodak.
 
They slow walked technology for decades in order to maximize profit. When the competition finally caught up Intel had no ability to compete.

This is fucking shocking to someone who built computers most of their lives. There was a time when AMD was shit under a shoe for CPUs and I wouldn't dream of touching one.

This goes to show you how fast anything we love could fall off. Cherish it today. If this can happen to Intel after their monopoly over the cpu market for so long it can happen to Call of Duty, or Sony, or Nintendo.

Intel was bigger than all 3 combined in the CPU mindshare and now they are a junk bond.

If their management hadn't slow rolled R&D where would we be today? There is a danger in complacency just like there is a danger in worrying too much about quarterly earnings. An imagined plateau in technology affected Intel's plans. Their plans stretch far into the future. Because these plans were too conservative they may never come to fruition. They planned for long cheese, but they planned for too long. Worrying only about long term or short term gain can both lead to ruin.
 
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Zacfoldor said:
This goes to show you how fast anything we love could fall off. Cherish it today. If this can happen to Intel after their monopoly over the cpu market for so long it can happen to Call of Duty, or Sony, or Nintendo.

Intel was bigger than all 3 combined in the CPU mindshare and now they are a junk bond.
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Shit, I think it's fair to say this would have been unexpected for Intel even just 5 years ago, but they've fucked up so much so fast that here we are.
 
For those that do not understand why this is important: once you hit junk status the institutional investors e.g. gigantic pension funds are legally obliged to dump your stock. This will cause a massive sell-off of Intel's stock unless the stock ownership structure is different but I CBA to check it right now.
 
Article:
The Trump Administration Is Reportedly Demanding That Taiwan Acquire a Huge Stake in Intel for a Trade Deal to Lower Tariff Rates, Potentially Giving the American Chipmaker a New Lifeline

It seems like the US government is focused on Intel getting back on track, as the chipmaker has been part of the ongoing trade negotiations with Taiwan.

Intel Is Apparently Part of the Trade Negotiations With Taiwan, and TSMC Might Receive a Huge Stake as Well
Before we dive into this, it is essential to take this rumor with a grain of salt, considering that information within the Taiwanese supply chain tends to change dramatically. Based on a report by UDN, it is claimed that the Trump administration is looking for a breakthrough for Intel, and they are demanding that Taiwan get a 49% stake in Intel, in order for the trade deal to proceed further. More importantly, the other option is to invest $400 billion into the US, which is a much more costly venture, so for Taiwan and TSMC, an Intel stake acquisition actually makes sense here.
 
I've been reading a book on the history of Intel.. my god have they fallen, and not just in financial value, but in everything from culture, to brand image, to engineering and talent acquiring ability. They are a walking husk of a corpse right now, held up only by their past and lots of still lucrative government contracts.
 
Fucking crazy. 7 or so years ago I considered Intel a "can't lose" stock. I'm so glad this happened to divorce me from the notion that such a thing can exist. Thankfully I didn't invest or give that advice to any of the people in my orbit. But they were on that short list.

But I agree with Fitch. There isn't even anything on the horizon to be excited about for Intel. I assume if they had anything they'd be trumpeting it as loudly as they could. The wildcard here is AMD. Their management is bad enough to still fuck this up, and all Intel really has to do is tread water and stay in the game until that happens to have another shot.

IDK, would a recall of the crispy 13 and 14 chips have saved things? I really don't know how anyone could have handled a situation like that. Seemed like no good route out. I'd love to know how much their internal testing showed this before release. Seems like it HAD to have shown up. Much like the Western automakers, the future is uncertain, bleak and scary as fuck.

Snapdragon is waiting in the wings for both their hides if you ask me.
 
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Their products are junk and nothing on their roadmaps is poised to change that. Their days are numbered and rightfully so. Free market working as intended. When they go under I look forward to seeing what happens with the X86 ownership they currently hold.
 
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The Tortoise vs the hare but more extreme. It's baffling how Intel have lost all pace entirely. I don't want a single horse race, Intel need to do something.
 
Thats what happens when you prioritize greed over innovation. Many American companies will be following intel in the next decade. Short sighted thinking always loses in the end. Intel, Boeing are some of the legacy companies on their road to biting the dust.
 
Intel is a pretty standard Harvard Business Review example of the vicious cycle of engineering talent not wanting to touch your company with a 10 foot pole and that makes it impossible to catch up after being behind for too long

If you're a decent engineer, you want to work at TSMC or Nvidia or Samsung or even AMD. So Intel can only hire scraps, people who can't cut it anywhere else. You can see the results after 20 years of decline

I don't think there is a way to reverse this stigma. Intel is dead
 
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Rosoboy19 said:
10 years ago the 4790k was stomping all over AMD's best offering and Intel seemed unstoppable.

Now it looks like they may struggle just to stay relevant going forward. The tech industry is ruthless.
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Bruh entire Core 2 Duo/Quad era they ate AMD's lunch, Athlon X2 sucked

Then Sandy Bridge (shoutout 2500K) was a GOATed chip for YEARS

Skylake after that was great too

Wild how far they've fallen.
 
phant0m said:
Bruh entire Core 2 Duo/Quad era they ate AMD's lunch, Athlon X2 sucked

Then Sandy Bridge (shoutout 2500K) was a GOATed chip for YEARS

Skylake after that was great too

Wild how far they've fallen.
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The Athlon X2 didn't suck but in any case. Yea the Sandy Bridge was a good chip and AMD stumbled at that time with Bulldozer or whatever… but instead of doubling down they re released the same chip for five generations until AMD was able to start catching f up.
 
b0uncyfr0 said:
AMD was in that same position 10-13 years ago but they managed to survive. Theyve gotta have something.
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Yeah it wasn't long ago when AMD was circling the drain, with constant rumors of this or that Chinese company buying them out + everyone worried that their x86 cross-licensing deal wouldn't be transferrable to another company.

I heard a very interesting interview with Jim Keller who rescued AMD. He basically said that it ain't worth spending R&D CPU unless it can come within like 10% of Intel's competition. So he made the very ballsy decision to kill off BOTH their desktop and laptop CPU architectures and essentially bet AMD's future on Zen.
 
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