TSM

Taiwan Semiconductor Manufacturing Co Ltd (TSMC) will prioritise production of auto chips if it is able to further increase capacity, Taiwan's Economics Ministry told Reuters, amid a global shortage that has hampered car production. A ministry official said Minister Wang Mei-hua spoke to senior company executives on Sunday about the issue. TSMC had told the ministry it will "optimise" the production process of chips to make it more efficient and prioritise auto chip production if it is able to further increase capacity, the ministry said.

The market didn't appear to like new CEO Pat Gelsinger's "stay the course" strategy, but it's the right move long-term.

Germany has asked Taiwan to persuade Taiwanese manufacturers to help ease a shortage of semiconductor chips in the auto sector which is hampering its fledgling economic recovery from the COVID-19 pandemic. Automakers around the world are shutting assembly lines due to problems in the delivery of semiconductors, which in some cases have been exacerbated by the former Trump administration's actions against key Chinese chip factories. The shortage has affected Volkswagen VOWG_p.DE, Ford Motor Co F.N, Subaru Corp 7270.T, Toyota Motor Corp 7203.T, Nissan Motor Co Ltd 7201.T, Fiat Chrysler Automobiles and other car makers.

Taiwan's Ministry of Economic Affairs said on Sunday it has received requests through diplomatic channels to help ease a shortage of chips for the auto sector and that it has asked local tech firms to provide "full assistance". Automakers around the world are shutting assembly lines because of a global shortage of semiconductors that in some cases has been exacerbated by the former Trump administration's actions against key Chinese chip factories, according to industry officials. The shortage has affected Ford Motor Co, Subaru Corp , Toyota Motor Corp, Volkswagen, Nissan Motor Co Ltd, Fiat Chrysler Automobiles and other car makers.

(Bloomberg) -- Intel Corp.’s new Chief Executive Officer Pat Gelsinger wants the company to regain its former glory as the world’s leading chip manufacturer and he says it’s a strategic priority for the U.S.That pits the industry veteran against investors and analysts who are hankering for quick results and think Intel’s bottom line takes precedence.“This is a national asset. This company needs to be healthy for the technology industry, for technology in America,” Gelsinger told analysts late Thursday after pledging to keep most of Intel’s semiconductor production in-house. “It’s an opportunity to help and to unquestionably put Intel and the United States in the technology leadership position.”The stock dropped 9% in New York Friday, its worst day since October, on concern a manufacturing turnaround will take years and cost billions of extra dollars. Some investors had advocated for Intel to outsource more production before Gelsinger revealed his hand.“Catching up is both a long shot and long journey,” Jefferies LLC analyst Mark Lipacis wrote in a note titled “U.S. Semi Manufacturing Crusade = No Quick Turnaround.”Intel will struggle to live up to Gelsinger’s assertion that the company can catch and pass Taiwan Semiconductor Manufacturing Co., the current leader in chip production. However, his rallying cry resonates more with other audiences and may bring Intel allies in the new administration of U.S. President Joe Biden.The chip industry is at the heart of a growing national rivalry between China and the U.S. China is the biggest consumer of semiconductors and the government there has vowed to spend more than $160 billion to create a domestic semiconductor sector. So far, though, it still relies heavily on U.S. chipmakers.That equation has become more complicated amid increasing scrutiny of the global technology supply chain. While many U.S. companies still design advanced chips, they have them made by TSMC in Taiwan.Intel is one of the few remaining chip companies that supply themselves with leading manufacturing. And it still makes many chips in the U.S., with factories in Oregon, Arizona and New Mexico. These components power computers that run or design government encrypted communication, nuclear power plants, military hardware and banking systems.If Intel outsourced production to TSMC -- as some on Wall Street want -- the U.S. would lose a major advanced manufacturing sector and hand more crucial know-how to Taiwan, a country China calls a rogue province that is only 100 miles off the coast of the mainland.Some U.S. lawmakers have begun listening to Intel and other U.S. chip industry players who have argued for years that incentives to keep manufacturing in the country just aren’t enough compared with what’s offered in China and other parts of the world.Last year, a bipartisan bill to provide $50 billion of incentives to build production in the U.S. was proposed. But to put that seemingly staggering amount of money into perspective, earlier this month TSMC said it’s planning to spend as much as $28 billion on new plants and equipment this year.Read more: Chip Industry Wants $50 Billion to Keep Manufacturing in U.S.“What we’ve heard from the U.S. government is, we need access to advanced microelectronics technology and manufacturing here in the U.S.,” Intel’s outgoing CEO Bob Swan told analysts late Thursday. “We need a safe and secure supply chain increasingly here in the U.S.”While improving its own manufacturing, Intel could develop a technology partnership with TSMC and other major operators of chip foundries. TSMC and Samsung Electronics Co. are either working on or considering new factories in the U.S.Read more: Samsung Mulls $10 Billion Texas Plant“This type of a partnership could also leverage new U.S. tax credits for onshore manufacturing for further value creation,” Timothy Arcuri, an analyst at UBS, wrote in a note to investors on Friday.Last year, Biden proposed a 10% “Made in America” tax credit covering projects such as increasing domestic production and retooling or expanding manufacturing facilities.Even U.S. government spending power won’t quickly fix Intel’s main problem: The sheer difficulty of making chips. The tiny squares of silicon are home to billions of tiny switches or transistors. Intel factories in Oregon, Arizona and New Mexico churn out millions of these semiconductors a month. But doing that reliably has become increasingly difficult and TSMC has forged ahead by gaining more experience as the biggest maker of smartphone chips.Semiconductors made using Intel’s latest production technology, called 7-nanometer, won’t arrive until 2023, executives said late Thursday. The TSMC equivalent has been used by Apple to mass produce chips for the iPhone for about a year already.“Even if Intel does successfully execute on 7-nanometer, they are still a node behind TSMC,” said Raymond James analyst Chris Caso. “And we don’t think Intel can deliver leadership products without leadership in transistors because it has never been done before. That keeps Intel behind the industry for four more years.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Wall Street wants to know whether the company will make its next-generation chips in-house, but a call with management left that up in the air.

(Bloomberg) -- Samsung Electronics Co. is considering spending more than $10 billion building its most advanced logic chipmaking plant in the U.S., a major investment it hopes will win more American clients and help it catch up with industry leader Taiwan Semiconductor Manufacturing Co.The world’s largest memory chip and smartphone maker is in discussions to locate a facility in Austin, Texas, capable of fabricating chips as advanced as 3 nanometers in the future, people familiar with the matter said. Plans are preliminary and subject to change but for now the aim is to kick off construction this year, install major equipment from 2022, then begin operations as early as 2023, they said. While the investment amount could fluctuate, Samsung’s plans would mean upwards of $10 billion to bankroll the project, one of the people said.Samsung is taking advantage of a concerted U.S. government effort to counter China’s rising economic prowess and lure back home some of the advanced manufacturing that over the past decades has gravitated toward Asia. The hope is that such production bases in the U.S. will galvanize local businesses and support American industry and chip design. Intel Corp.’s troubles ramping up on technology and its potential reliance in the future on TSMC and Samsung for at least some of its chipmaking only underscored the extent to which Asian giants have forged ahead in recent years.The envisioned plant will be its first in the U.S. to use extreme ultraviolet lithography, the standard for next-generation silicon, the people said, asking not to be identified talking about internal deliberations. Asked about plans for a U.S. facility, Samsung said in an email no decision has yet been made.“If Samsung really wants to realize its goal to become the top chipmaker by 2030, it needs massive investment in the U.S. to catch up with TSMC,” said Greg Roh, senior vice president at HMC Securities. “TSMC is likely to keep making progress in process nodes to 3nm at its Arizona plant and Samsung may do the same. One challenging task is to secure EUV equipment now, when Hynix and Micron are also seeking to purchase the machines.”Read more: Intel Talks With TSMC, Samsung to Outsource Some Chip ProductionIf Samsung goes ahead, it would effectively go head-to-head on American soil with TSMC, which is on track to build its own $12 billion chip plant in Arizona by 2024. Samsung is trying to catch TSMC in the so-called foundry business of making chips for the world’s corporations -- a particularly pivotal capability given a deepening shortage of semiconductors in recent weeks.Under Samsung family scion Jay Y. Lee, the company has said it wants to be the biggest player in the $400 billion chip industry. It plans to invest $116 billion into its foundry and chip design businesses over the next decade, aiming to catch TSMC by offering chips made using 3-nanometer technology in 2022.It already dominates the market for memory chips and is trying to increase its presence in the more profitable market for logic devices, such as the processors that run smartphones and computers. It already counts Qualcomm Inc. and Nvidia Corp. as customers, companies that historically relied on TSMC exclusively. It has two EUV plants, one near its main chip site in Hwaseong, south of Seoul, and another coming online nearby at Pyeongtaek.To close a deal, Samsung may need time to negotiate potential incentives with U.S. President Joe Biden’s administration. The company has hired people in Washington D.C. to lobby on behalf of the deal and is ready to go ahead with the new administration in place, the people said. Tax benefits and subsidies will ease Samsung’s financial burden, but the company may go ahead even without major incentives, one of the people said.Samsung has been looking into overseas chipmaking for years. Intensifying trade tensions between the U.S. and China and now Covid-19 are stoking uncertainty over the reliability and economics of the global supply chain. Plants in the U.S. could help the Korean chipmaker strike better deals with key clients in the U.S., particularly in competition with TSMC.From Microsoft Corp. to Amazon.com Inc. and Google, the world’s largest cloud computing firms are increasingly designing their own silicon to power their vast data centers more efficiently. All need manufacturers like TSMC or Samsung to turn their blueprints into reality.Samsung’s U.S. branch purchased land in October next to its existing Austin fab, which is capable of running older processes. The Austin City Council held a meeting in December to discuss Samsung’s request to rezone that parcel of land for industrial development, according to meeting minutes.The Korean company’s existing Texas facility is too small to to meet increasing orders for outsourced chips coming from Qualcomm, Intel and Tesla, according to research by Citibank. Intel in particular is likely to funnel more orders toward Samsung to offset any reliance on TSMC for its foundry needs, the brokerage said in a report.Late Thursday, Intel’s incoming Chief Executive Officer Pat Gelsinger told investors he was likely to keep most production of the company’s best processors in-house and that the delayed introduction of new manufacturing technology was showing signs of improving. Still, his comments disappointed some investors who have been lobbying for more outsourcing by the world’s largest chipmaker. Intel shares dropped as much as 9% in New York trading Friday, the most since October. Rival Advanced Micro Devices Inc., which relies on TSMC for production, gained as much as 4.8%.Read more: Samsung Intensifies Chip Wars With Bet It Can Catch TSMC by 2022Some analysts question Samsung’s ability to carve out a significant share of a market dominated by TSMC, which is spending a record $28 billion this year to ensure it remains at the forefront of technology and capacity. For its part, Samsung’s semiconductor division spent $26 billion on capital expenditure in 2020, but that’s been largely in support of its dominant memory business and not all of its expertise in making memory is directly relevant to creating advanced logic chips.Processors are more complex to manufacture than memory and their production yields are harder to control and scale up in the same way. Foundry customers also require bespoke solutions, imposing another barrier to rapid expansion and also making Samsung dependent on customers’ designs. But the Korean giant can draw confidence from its work with Nvidia, whose chief executive officer has sung Samsung’s praises in collaborating on the manufacturing for its latest graphics card silicon.(Updates with Intel plans in 14th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Taiwan Semiconductor Manufacturing Co Ltd and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review discussion held on 19 January 2021 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.

When so many changes and challenges are happening all at once, there is always great opportunity and great risk. But what we’re seeing in the market now is that a new class of stocks — mega-cap stocks — has been created that capitalizes on both. They are the new market titans, but they are also the stocks that investors turn to when times get worrisome. Generally, once “new rules” get set in the market, a correction comes along and resets the rules back to the long-term standard. And before I utter the words, “it’s different this time,” I will simply say that these stocks represent some of the most widely held stocks in the world. They are held by institutions and individuals alike on such a massive scale it’s hard to imagine any of them falling off a cliff. Now, they may have tough times, as some already have, but these seven mega-cap stocks with solid foundations are long-term stocks that will continue to deliver come what may.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 7 Great Sub-$20 Stocks to Buy After Inauguration Day Each and every stock on this list has either an “A” or “B” rating in Portfolio Grader. Let’s take a look: Apple (NASDAQ:AAPL) Amazon (NASDAQ:AMZN) PayPal (NASDAQ:PYPL) Taiwan Semiconductor (NYSE:TSM) Microsoft (NASDAQ:MSFT) NVIDIA (NASDAQ:NVDA) Walmart (NYSE:WMT) Mega-Cap Stocks: Apple (AAPL) Source: pio3 / Shutterstock.com At the beginning of August 2018, AAPL was the first stock to break the $1 trillion market capitalization ceiling. That was pretty amazing. You know what is even more amazing? It only took two years before it was the first stock to break the $2 trillion market cap ceiling. That is some incredible growth. And in that time, the company didn’t do much differently than it usually does, upgrading products and shuffling its product line. It didn’t launch a new line of products or move into a new sector. It simply became a stock that everyone wanted for both growth and safety. Apple represents the best of big tech but is also well established — the perfect long-term stock. And the talk about moving into electric or self-driving vehicles is pretty exciting stuff for the decade ahead. In the past year this behemoth is up a whopping 73% and still has a dividend that is better than most bank certificates of deposit (CDs). Amazon (AMZN) Source: Sundry Photography / Shutterstock.com There are two things that founder and CEO Jeff Bezos has developed that have launched Amazon into the stratosphere of mega-cap stocks and made it one of the most reliable long-term stocks in the market — a focus on customers and Amazon Web Services (AWS). The former was there from the very beginning. When the company was young and faced off against Barnes & Noble, the biggest bookseller in the world at the time, Bezos told his small crew to worry about the customers, not the competition. And after building a thriving book business and moving into consumer goods, Bezos and his engineers built a massive database that turned into the most successful cloud-computing businesses in the world. 7 Dividend Stocks That Are Growing Their Payouts With a $1.66 trillion market cap, AMZN continues its expansion. And so does the stock, up 75% in the past 12 months. PayPal (PYPL) Source: JHVEPhoto / Shutterstock.com Launched by super-investors Elon Musk, Peter Theil, Musk’s brother and a handful of others, PYPL is one of the forefathers of the fintech movement. And it continues to expand its horizons today, even after the founders have moved on to new ventures. The launch of peer-to-peer (P2P) payments platform Venmo wasn’t fully embraced when it started, but now it has spread like wildfire and is one of the dominant P2P payment platforms in the world. At this point, PYPL would be a big fish to swallow by a big financial or tech firm, but it could do some interesting joint ventures or even buy a bank and get into a broader range of traditional bank offerings. That’s a trend in fintech now, and a merger of equals could be interesting. The stock is up 113% in the past 12 months. It’s not exactly cheap, but it has some really exciting long-term prospects to boost its growth. Taiwan Semiconductor (TSM) Source: Sundry Photography / Shutterstock.com One long-term trend sped up last year — the adoption of the digital economy. Between lockdowns and self-imposed isolation, reaching out was done more with electronic devices than in-person interactions. It’s no surprise then that chipmakers had a very good 2020. And that isn’t over. These are long-term stocks that will continue to grow, because we’re not going back to a less digital world when the pandemic is over. There are chips in everything now, from toaster ovens to earbuds. Server farms are getting bigger as the demand for cloud computing and 5G telecom expands. And the largest chipmaking foundry in the world is TSM. You can name almost any major fabless semiconductor maker and it is a client of TSM, including AAPL and NVDA in this article. The 7 Best Stocks To Buy In The Dow Jones Today The stock is up 123% in the past year, yet it’s still trading at a P/E (price-to-earnings ratio) of 36. Microsoft (MSFT) Source: The Art of Pics / Shutterstock.com Next on my list of mega-cap stocks, with a $1.5+ trillion market cap, is Microsoft. It wasn’t that long ago that MSFT was teetering between prominence and afterthought. But no longer. It has built its own fast-growing, high-margin cloud-computing division, created its own line of industry standard computers and leveraged its world-renowned software applications. And it now stands as one of the premier long-term tech stocks on the planet. The dominance that Apple displays within its closed garden, MSFT has in the open world beyond the AAPL world. And even there, the two titans have come to a grudging realization that they both need each other for continued growth and support. The crazy thing is, for all the power and promise that MSFT has, it hasn’t risen as quickly as other big tech in the past year — it’s “only” up 37%. It also has a reliable 1% dividend. NVIDIA (NVDA) Source: Allmy / Shutterstock.com Graphic processing units (GPUs) were a pretty niche market for a long time. Gamers would pay up for high-performance GPUs, as would research facilities and IT departments in tech-dependent firms. But it wasn’t a major growth sector. And that was good news for NVDA, which dominated the niche. And when it blew up with more digital commerce and mobility, the company was the biggest game in town. As server farms grew to supply big data, cloud computing, 5G and the internet of things, NVIDIA was supplying the chips to run the machines that kept everything buzzing along. That also includes the bitcoin boom. At this point, this GPU firm continues to set the industry standards for performance and quality. Certainly, there are competitors, but NVDA has proven it can deliver time after time. 9 Stocks That Investors Think Are the Next Amazon The stock is up 120% in the past year and will continue to be one of top long-term tech stocks in the market. Walmart (WMT) Source: Jonathan Weiss / Shutterstock.com After all these sexy big-tech stocks, the world’s largest retailer seems like an oddity on this list of mega-cap stocks. However, it has been WMT’s adoption of tech that has kept it relevant, especially in the past few years. As one of the leading “big-box retailers” there was a significant threat to its business model when the pandemic hit. But WMT had already seen the power of online retail and the threat that AMZN posed if the company didn’t make an effort to develop its own robust e-commerce presence. That has helped keep Walmart a powerhouse. In 2019, the company racked up $340 billion in retail sales. Amazon had $112 billion. AMZN still has a strong lead in online sales (about 38% vs. 5%), but people are shopping again. And they get value for their money when they shop at Walmart. The stock is up just 26% in the past 12 months, is well valued and delivers a solid 1.5% dividend. On the date of publication, Louis Navellier has positions in AMZN, PYPL, TSM, MSFT and NVDA in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article. Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post 7 Mega-Cap Stocks With Solid Foundations appeared first on InvestorPlace.

(Bloomberg) -- Intel Corp. shares tumbled after the incoming chief executive officer pledged to regain the company’s lead in chip manufacturing, countering growing calls from some investors to shed that part of its business.“I am confident that the majority of our 2023 products will be manufactured internally,” Pat Gelsinger said on a conference call to discuss financial results. “At the same time, given the breadth of our portfolio, it’s likely that we will expand our use of external foundries for certain technologies and products.”He plans to provide more details after officially taking over the CEO role Feb. 15, however Gelsinger was clear that Intel is sticking with its once-mighty manufacturing operation.“We’re not just interested in closing gaps,” he told analysts on a conference call Thursday. “We’re interested in resuming that position as the unquestioned leader in process technology.”Keeping production in-house may be bad for Intel because its manufacturing technology has fallen behind Taiwan Semiconductor Manufacturing Co., which makes chips for many of Intel’s rivals. If the U.S. company can’t catch up, its products will become less competitive and it could lose sales and market share.Intel shares fell 5.7%% at 9:36 a.m. in New York on Friday. They have declined about 6% over the last 12 months compared with a 16% increase in the S&P 500.Activist Dan Loeb has suggested the company consider spinning off its manufacturing business. Other investors have been waiting to see if Intel will outsource more production.“Where investors are going to be disappointed is that some were expecting some sort of larger announcement of a strategic partnership with TSMC,” said Edward Jones & Co. analyst Logan Purk.TSMC recently announced capital spending of as much as $28 billion for 2021 to maintain its lead. Purk said Intel would have to increase its own spending massively to try to catch the Asian company.TSMC dropped 3.6%, the most since March 23. Shares of some Intel suppliers also dropped, with Screen Holdings Co. down 3.7% and Tokyo Electron Ltd. declined 1.6%.Read More: Intel Probes Potential Unauthorized Access to Earnings ReportGelsinger is taking the reins of a company in the midst of its worst crisis in at least a decade. It has been the largest chipmaker for most of the past 30 years, dominating the $400 billion industry by making the best designs in its own cutting-edge factories. Most other U.S. chip companies shut or sold plants and tapped other firms to make the components. Intel held out, arguing that doing both improved each side of its operations and created better semiconductors.That strategy has crumbled in recent years as Intel struggled to introduce new production techniques on time. It is now lagging behind TSMC and Samsung Electronics Co., which make chips for Intel competitors, such as Advanced Micro Devices Inc., and big Intel customers including Amazon.com Inc. and Apple Inc.AMD shares rallied in extended trading while Gelsinger discussed his goal of improving Intel’s in-house manufacturing.Intel’s quarterly results, released before the market closed on Thursday, initially sent the shares higher. A hacker accessed sensitive information from Intel’s website, prompting the company to report the numbers earlier than planned.Revenue in the period ending in March will be about $17.5 billion, the Santa Clara, California-based company said. This excludes the memory chip division Intel is selling. Analysts were looking for $16.2 billion on average, according to data compiled by Bloomberg.Intel sees strong demand for laptops through the first half of the year, Chief Financial Officer George Davis said in an interview. Earnings in the second part of the year will partly depend on whether corporations increase spending on new hardware, he added.“The question is will we see support from enterprise,” he said. “They’ve been very quiet.”Intel’s personal computer chip division had revenue of $10.9 billion in the fourth quarter. Analysts expected $9.72 billion. Its higher-margin data center unit generated sales of $6.1 billion. Wall Street was looking for $5.37 billion.In Intel’s data center business, revenue from cloud service providers fell 15% from a year earlier. Enterprise and government sales slumped 25%. Volumes and average selling prices declined. Owners of large data centers are working their way through unused stockpiles of chips.In its PC business, Intel reported a 30% surge in laptop chip sales, even as average selling prices declined 15%.Fourth-quarter profit, excluding some items, was $1.52 a share on $20 billion of revenue, down 1% from a year earlier. Analysts had estimated $1.11 a share on revenue of $17.5 billion.Intel’s gross margin, the percentage of revenue remaining after deducting the cost of production, was 56.8%. This is a key indicator of the strength of its manufacturing and product pricing. Intel has historically delivered margins of about 60%.(Updates with shares in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

These three stocks should benefit from the new Administration's support for renewable energy, fighting COVID-19 and moving critical supply chains back to the U.S.

Intel Corp executives have raised the possibility of licensing chipmaking technology from outside firms, a move that could see it exchanging manufacturing secrets with rival Taiwan Semiconductor Manufacturing Co Ltd (TSMC) or Samsung Electronics Co Ltd. Intel is one of the few remaining semiconductor firms that both designs and manufactures its own chips, but the business model has come into question in recent years as the company lost its manufacturing lead to the Taiwanese and Korean companies. But licensing technology could help Intel avoid major investments in rivals' factories that outsourcing deals would likely entail.

Intel Corp executives have raised the possibility of licensing chipmaking technology from outside firms, a move that could see it exchanging manufacturing secrets with rival Taiwan Semiconductor Manufacturing Co Ltd (TSMC) or Samsung Electronics Co Ltd. Intel is one of the few remaining semiconductor firms that both designs and manufactures its own chips, but the business model has come into question in recent years as the company lost its manufacturing lead to the Taiwanese and Korean companies. One option urged by some investors would be to outsource manufacturing.

Stocks closed mixed Thursday, as the Nasdaq hit a new high but the Dow Jones Industrial Average ended fractionally lower.

The company is the only maker of equipment used to produce the most advanced semiconductors. New Street Research analyst Pierre Ferragu upgraded the stock to Buy.

Stocks flattened as PayPal headed for a buy point and Travelers paced the Dow Jones today as the market digested weekly unemployment claims data.

(Bloomberg) -- Investors want to know one thing when Intel Corp. reports results Thursday: Will the world’s largest chipmaker outsource more production? We may already have an answer, judging by recent comments from other parts of the industry.On Tuesday, ASML Holdings NV, a key provider of chipmaking equipment, said it is shifting orders for some of its most advanced machines from one customer to others. It didn’t say who, but the company was likely referring to orders moving from Intel to other chipmakers, such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co.These two companies produce semiconductors for others. If Intel were outsourcing more, it would need fewer ASML machines, while TSMC and Samsung would need more gear to handle the extra work.Intel will likely address its manufacturing strategy after it reports fourth-quarter results. Investors and analysts have criticized the company for falling behind and failing to deliver a concrete plan during previous earnings reports.“Beyond the financials, investors will be looking for more clarity on Intel’s long-term strategy and manufacturing game plan,” Christopher Rolland, an analyst at Susquehanna Financial Group, wrote in a recent research note. “We would be encouraged if the plan included outsourcing of at least some of the core PC/server products.”Last week, TSMC dropped more clues. It unveiled plans to increase 2021 capital spending to as much as $28 billion, a record and a huge jump from $17.2 billion in 2020. That fueled speculation it’s putting capacity -- ASML machines and other gear -- in place to fill large orders from Intel.The Taiwanese company’s executives declined to comment on customers. However, Intel has talked with TSMC and Samsung about the Asian companies making some of its best chips, Bloomberg reported recently.Read more about Intel Talks With TSMC and Samsung here.TSMC and Samsung have production technology that’s now more advanced than Intel, which has always made its best products in-house and previously led the industry. Manufacturing is one of the key factors in making chips that can crunch information faster, store more data and use less electricity.Intel may not deliver its final answer on Thursday, though. The company just replaced Chief Executive Officer Bob Swan with former executive Pat Gelsinger, who will take over next month. Swan said he would announce whether to outsource production, and by how much, during the first quarter, but Gelsinger may need more time to develop his own strategy.While investors focus on Intel’s future plans, it has been racking up record earnings on demand for personal computers as large chunks of the population work and study from home. The increasing use of cloud services has also bolstered sales of its Xeon server chips, which are the heart of data centers run by companies such as Google and Amazon.com Inc.When it announced the appointment of Gelsinger, Intel said fourth-quarter earnings would exceed its forecasts and had made “strong progress’ on its latest manufacturing process, known as 7 nanometer. In July, Intel shares slumped 16% when the company warned this technology would be a year late.Analysts expect Intel revenue fell 13% in the fourth quarter to $17.5 billion and they see sales declining 18% year-over-year to $16.18 billion in the current period. For 2021, sales are projected to fall 7%, the first annual contraction since 2015, according to average analysts’ estimates compiled by Bloomberg.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Susquehanna Financial Group analyst Christopher Rolland calculated that Intel would generate $600 million to $700 million more in fourth-quarter sales than expected.

2021 will be a strong year of growth in the semiconductor space, but will Intel be part of it?

(Bloomberg) -- ASML Holding NV, a crucial supplier to Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co, beat analyst expectations for the first quarter and is planning a significant share buyback in the first quarter, with U.S.-China tensions doing little to disrupt strong demand.Chief Executive Officer Peter Wennink said ASML hasn’t shipped EUV machines to China because the request for an export license is still with the Dutch government. “There have been very deep, lengthy discussions between the Dutch, the European and the U.S. governments about the strategic nature of this technology. We don’t expect that the fundamental views of the U.S. towards China will change with the new administration. It is known that China is the big competitor.”ASML shares hit a record high in Amsterdam trading, rising as much as 4.1% to 457.85 euros.Key InsightsThe Dutch supplier of machines to make semiconductors expects revenue in the first quarter of 3.9 billion euros ($4.7 billion) to 4.1 billion euros, with a gross margin of as much as 51%, it said in a statement Wednesday. Analysts had expected sales of 3.52 billion euros and a gross margin of 49.3%.ASML is insulated from the pandemic-induced economic downturn as customers such as Intel Corp., Samsung and TSMC need its latest machines to make chips that are faster, cheaper and more efficient. Developments in artificial intelligence, high-performance computing and 5G wireless networks should support future demand.Still, the chip industry needs to deal with the global chip supply shortage that’s crippling automakers around the world, the CEO said.“This engine needs to start running again,” Wennink said in an interview with Bloomberg. “We start from an under-capacity view today. So we’ll just have to step up and ship more tools and more machines to get more semiconductor capacity out there.”In the fourth quarter, ASML shipped nine of its newest EUV machines and won orders for six EUV systems representing 1.1 billion euros. EUV machines are used to etch smaller circuits while increasing capacity and speed.The company expects total EUV system sales this year of 5.8 billion euros, 30% higher than 2020.“The build out of the digital infrastructure and the continued technology innovation is relevant to the consumer, automotive and industrial markets and drives demand across our entire product portfolio,” Wennink said.Market ReactionASML shares have risen 69% in the past 12 months, outpacing a 14% gain in the Stoxx Europe technology index.Get MoreASML kept its guidance for low double-digit revenue growth for 2021, and annual revenue at 15 billion euros to 24 billion euros through 2025.The Dutch company has repurchased 1.2 billion euros worth of shares under its 6 billion euro buyback program, running through 2022.(Updates with CEO comments from second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.