She was head of products. She was, briefly, co-CEO. Michelle Johnston Holthaus was a big deal at chip stock Intel (INTC), but she is that no longer. She is departing the company after a 30-year tenure at Intel that saw her placed in charge, if only in that time between Pat Gelsinger and Lip-Bu Tan. And investors did not take the news well, sending shares down fractionally in Tuesday afternoon’s trading.
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Holthaus has been part of Intel’s operations for the last 30 years, reports note, and though she will not be leaving right away, her impact is already being felt. She will remain as a “strategic adviser” over the next few months. This is thought to be part of Lip-Bu Tan’s ongoing efforts to pare back management and flatten the leadership team, as seen recently by his move to route design approval through his own office.
But the flattening was not just about firing. Tan also brought in Kevork Kechichian to serve as executive vice president, as well as general manager of the data center group. Intel Foundry’s CTOO, Naga Chandrasekaran, will take over Foundry Services as well. Tan also established a new division, which will focus on “custom silicon business,” reports noted.
An Unexpected Expense
Then, things got worse, at least in the near-term. Reports from CFO David Zinsner note that the 18A process was a big deal for Intel, but its successor, 14A, will actually cost even more. While the initial investment is not necessarily greater, Zinsner noted, the cost per wafer will actually be higher because 14A will call for High-NA EUV tools. The 18A process did not depend on these tools, and thus did not come with that expense.
The hope, however, is that the production process will save costs and improve revenue in other ways. The 14A node is expected to produce chips with between 15% and 20% better performance per watt, which in turn means between 25% and 35% power savings over the 18A node.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 25 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 28.98% rally in its share price over the past year, the average INTC price target of $22.34 per share implies 8.5% downside risk.
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