Intel jumps on report it could speed up production of 10-nanometer chips

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• Shares of Intel were up nearly 5% after a research report said the long-time chip-industry leader could ramp up production of its 10-nanometer processors sooner than the expected June 2019 timeline.
• “Intel’s second-half production levels suggest upside to analyst revenue estimates for the fourth quarter and first quarter of 2019,” says BlueFin Research Partners.
• Follow Intel trade here in real time.

Intel shares were up nearly 5% Tuesday after a report said the long-time chip-industry leader may begin to ramp up production of its 10-nanometer processors sooner than expected.

“Intel’s second-half production levels suggest upside to analyst revenue estimates for the fourth quarter and first quarter of 2019,” Steve Mullane, analyst BlueFin Research Partners wrote in a note sent out to clients on Tuesday, according to Bloomberg. The note said suppliers think production of the processors could be pulled forward from the June 2019 timeline by four to six weeks.

Intel has been grappling with a shortage of processors as the growth in demand for PC’s has caught them off guard. Last week, Bob Swan, Intel’s interim CEO noted, “The surprising return to PC TAM growth has put pressure on our factory network.”

On Monday, RBC Capital Markets and Barclays predicted Intel’s earnings would be impacted in the coming quarters as it grapples with a processor shortage. RBC lowered its target price to $55 from $57 and maintained its “sector perform” rating while Barclays lowered its rating to “underweight” from “equal weight” and reduced its price target to $38 from $53 — a 20% downside to where shares settled on Monday.

Analysts believed that Intel’s shortage would boost AMD’s market share in the high-end commercial desktop and server markets. Shares of AMD were down 3.6% in wake of this news.

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