Big chipmakers evaluating Intel’s foundry but Citi doubts deals will materialise

Investing.com -- Several large chipmakers including Qualcomm, Broadcom and Apple appear to be evaluating Intel’s foundry and packaging technologies but Citi analysts do not expect any of the possible engagements to become meaningful given Intel’s technical challenges and its lag behind TSMC.

Citi said job postings at Qualcomm referenced Intel’s EMIB packaging technology, suggesting the company may be assessing Intel for data center ASIC work.

The brokerage added that the potential business would be small, representing less than 1% of Qualcomm’s sales, and unlikely to be a material driver for Intel.

Similar job listings at Apple and Broadcom referenced Intel packaging processes. Citi said any potential work across the three companies would be limited to packaging, which carries lower prices and margins than front end chip manufacturing.

The bank added that attempts to diversify packaging supply likely reflect U.S. government efforts to expand domestic semiconductor production under the CHIPS and Science Act, as well as tight supply for TSMC’s CoWoS technology, rather than a shift in preference toward Intel.

Citi said it still does not expect Intel’s foundry strategy to gain traction, citing industry feedback that Nvidia abandoned a packaging project with Intel due to technical issues. The bank said Intel remains years behind TSMC and reiterated its Sell rating on Intel. It kept a Neutral rating on Qualcomm.

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