Intel Outside

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What's going on?

Intel has a lot to process right now: reports over the weekend suggested the tech giant wants to outsource some of its chipmaking production to rivals Samsung and TSMC.

What does this mean?

The chipmaking industry can be split into two halves: the half that designs the chips which includes American heavyweights Nvidia and Qualcomm and the half that makes the chips, like TSMC. Intel, for its part, figured it could keep both plates spinning at once, but, uh, it mightve gotten a bit ahead of itself: the companys struggled to stay at the cutting edge of microchip technology, and its seen its grip on the market start to slip. Things came to a head last year when the company revealed its newest technology was six months behind schedule and now, it seems, Intels finally admitted it cant handle this alone.

Why should I care?

Zooming in: Everyone loves a quitter.


The news might be too little, too late in one activist investors not-so-humble opinion: the firm reckons Intels been too slow in outsourcing its manufacturing, and its now suggesting that selling the chip manufacturing business altogether could help revive Intels fortunes. And investors seem to think the hedge fund is onto something: Intels shares have outperformed the tech-focused Nasdaq index by around 5% since news of the activists involvement broke two weeks ago.



For markets: Samsmug.


Samsungs shares hit an all-time high on the news, and its shareholders had been feeling pretty positive to begin with: the South Korean conglomerates stock has risen 60% since September. And with its latest smartphone hitting the shelves this week, things could be about to get even better

Originally posted as part of the Finimize daily email.

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