Drexel downgrades Qualcomm, cites Intel fears
- Arguing Intel's (NASDAQ:INTC) manufacturing process lead threatens Qualcomm's (QCOM -0.5%) mobile processor share, Drexel Hamilton's Rick Whittington has downgraded the mobile chip/IP giant to Hold, and cut his target by $25 to $75.
- Whittington observes Intel is now selling 14nm processors - its 14nm Cherry Trail tablet CPUs recently began shipping - while Qualcomm has just begun selling 20nm processors (made by TSMC). He adds top foundries are slow to ramp 14nm and 16nm FinFET processes - Samsung/Globalfoundries are rolling out the former, TSMC the latter - and that Intel "also appears set on commoditizing low-mid-range LTE [baseband modems] for incorporation in their mobile processor offerings, conjuring a price war."
- Worth noting: 1) While Intel has begun offering powerful app processors that leverage advanced manufacturing processes, it hasn't launched high-end baseband/app processors that can take on Qualcomm's Snapdragon 800 series. 2) A large portion of Intel's low-end efforts - both for app processors and baseband/app processors - are tied to alliances with Chinese chipmakers who (like Qualcomm) rely on 3rd-party foundries.
- Qualcomm is off modestly following the downgrade. FQ1 results arrive on Jan. 28.
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