Is PC softness dragging down Intel's 22nm plans?
Intel's Fab 24 in Leixlip, Ireland (the '1270' line) is being removed from the company's 22nm roadmap, according to Barclays' CJ Muse. Citi's Tim Arcuri added that the planned Fab 24 migration is being put "on hold" with a deeper strategic decision over Fab 24's fate coming at 14nm or 10nm.
What's sparking Intel's possible 22nm rethink? PC demand indicators continue to pancake across the board, from Europe to the US to China. Sluggish PC demand has spawned cancellations from smaller customers and is a harbinger of larger ones, says Susquehanna's Chris Caso. Applied Material's Mike Splinter confirmed in the company's 3Q11 results call that the traditional back-to-school PC push has been "disappointing." Even HP wants out, and is sloughing off its PC business.
The decision won't impact Intel's planned 2011 capex (seen around $6B), but could be a big damper on 2012. Fully upgrading Leixlip Fab 24 to 22nm could require $2B in total capex, and erasing that would create not only a sizeable hole for INTC's capex, but a ~5% slice out of what is already expected to be a "flattish" (???10%) industrywide 2012 WFE spend.???J.M.