Semiconductor Stock Round-up: Intel's Mobileye extends Geely partnership, TSMC says wafer orders down

As always, a lot is happening this week in the semiconductor space. Despite the continued decline of share prices all around, the major chip designers and manufacturers continue to announce significant moves. Late Monday Intel's (INTC) Mobileye unit said it would extend its agreement with China's Geely Automotive for autonomous technology. Taiwan Semiconductor (TSMC) said that major fabless customers – think Advanced Micro Devices (AMD) and Nvidia (NVDA) – are pushing back wafer orders scheduled to begin in early 2023. Last but not least, Micron Technology (MU) reports earnings on Thursday.

Intel stock news

Intel's wholly-owned Mobileye unit, which it acquired in 2017, announced the extension and expansion of an ongoing partnership with one of the largest automakers in China – Geely Automotive. The latter is an enormous automotive holding company that produces or owns stakes in at least 12 separate brands. After partnering in recent years with Geely's ZEEKR brand to produce the ZEEKR 001 EV, Mobileye's autonomous driving technology will now be rolled out to three more brands under Geely. The ZEEKR 001 comes equipped with Mobileye's SuperVision assisted-driving technology. 

"Mobileye SuperVision is powered by two 7 nanometer EyeQ®5 system-on-chip," Intel said in a statement. "It supports point-to-point assisted driving under a wide range of road types – from the highway, arterial and rural to urban. Mobileye SuperVision enables the vehicle to change lanes autonomously, navigate intersections and manage key driving priorities, as well as powering automated parking and preventive steering and braking. The Mobileye SuperVision system uses 11 high-resolution cameras – seven long-range and four parking cameras – to provide full visual coverage surrounding the vehicle."

Separately, Intel has honed in on the town of Vigasio in the Veneto region of northern Italy for its $4.5 billion chip assembly plant. The region has suitable transportation options that would allow Intel to become a major chip supplier to central Europe's industrial base. It is thought that the plant would produce 1,500 jobs for the region.

The Ohio legislature is reworking a payroll tax credit for Intel that would be worth as much as $650 million over the life of the policy if Intel produces the 3,000 long-term jobs at its planned Columbus, Ohio mega-foundry. The payroll tax credit is part of $2 billion in state incentives that would make Intel's $20 billion investment in the project more attractive. 

Taiwan Semiconductor, Advanced Micro Devices stock news

DigiTimes is reporting that Taiwan Semiconductor, the leading foundry for advanced chips in the world, is receiving direction from fabless customers to push back production schedules for chip deliveries in 2023. The report says the stalling nature of the orders is big enough that management may revise full-year 2023 revenue lower. It is rumored that these delivery slowdowns stem from one of TSMC's largest customers – such as Nvidia, AMD or Broadcom (AVGO).

Demand was recently reported to be rather high in August due to the production timeline with Apple's recent iPhone 14 release. In August, TSMC reported revenue of $6.88 billion, which was up an incredible 59% YoY.

AMD could very likely be the culprit for reduced production start times since Bank of America just last week cut its revenue estimates for the chip designer. Analyst Vivek Arya cut full-year 2022 revenue by $290 million and 2023 revenue projections by about $590 million. AMD stock is down more than 24% in the past month.

Micron Technology stock news

Micron Technology will release earnings for the fiscal fourth quarter on Thursday. Wall Street expects the producer of memory products to issue adjusted earnings per share (EPS) of $1.38 on revenue of $6.78 billion. This is well off the same quarter a year ago when Micron produced adjusted EPS of $2.42 on revenue of $8.27 billion.

Just last week investment bank Citi said that prices for dynamic random access memory (DRAM), one of Micron's principle products, were plunging and that it appeared the bottom would not be found this year. Due to lack of demand from PCs and smartphones, Citi predicts that Micron will need to cut spending by as much as 40%.

Intel stock forecast

It is an understatement to say that Intel stock has been plunging of late. INTC stock is down 49% year to date, but about 19 percentage points of that come just from the past month alone. Intel could not hold onto the support at $28 on Monday and now has traded below $27 in Tuesday's premarket. Intel stock now requires a monthly view to see that it is hovering just above its August 2015 low of $24.87. That's right – a more than 7-year low! Intel stock is, however, trading well into oversold territory on the Relative Strength Index (RSI), so picking up some shares at $24.87 might not be a bad idea.

INTC monthly chart

AMD stock forecast

Now trading in the mid-$60s, AMD stock is also hovering just above long-term support. This comes at the $59 price level and stems from resistance found there between February and July 2020. If that resistance can turn into support, then AMD could soon find a bottom. The Accumulation/Distribution chart below shows that the market has been primarily accumulating AMD stock since May. This is a very good sign for future price reversals.

Additionally, there appears to be divergence on the RSI chart. Between April and September, AMD's share price experienced lower highs and lower lows. However, the RSI shows flat lows during this same time and higher highs, which could be the divergence that normally precedes a major turnaround in the direction of the share price.

AMD weekly chart