Intel (INTC) was facing a major problem…
Unless the chipmaker got its act together, its 110,000 employees – as well as America’s chip independence – would be at great risk.
We need those chips to power everything from our military… to our healthcare system… to your iPhone.
But recently, something dramatic changed… And its effects could secure access to Intel’s future chip production.
Today, I’ll show you how Intel got here and how this move will be a game-changer for the company.
It follows the reindustrialization trend we’ve been covering of bringing production, investments, and manufacturing back to American soil.
By following this trend, not only can America sustain its own economy… It can also help you make reliable profits.
The Challenges of Sustaining America’s Economy
After peaking near $70 a share in 2021, Intel investors lost faith.
Lackluster product design, growing foreign competition, and weakness in its foundry division caused the stock to fall to recent lows of $24.59 per share.
A foundry is a super high-tech facility that manufactures silicon chips. The same kind in all our devices, cars, and homes.
Only a few companies in the world can do it. Intel is one of them.
I’ve covered Intel’s competition before, including Taiwan Semiconductor (TSM). As you can imagine, competition from Taiwanese and Korean chip companies is fierce.
But it’s even worse than it seems… Because Intel uses TSM to build its advanced chips. So does Nvidia (NVDA) and Advanced Micro Devices (AMD).
So the U.S. is still heavily dependent on foreign chip suppliers.
But recently, something changed…
Intel found a whale. That’s the nickname casinos give their wealthiest customers.
This unknown mega-investor put down a massive deposit. And that could help the company roll out plans to get ahead of its competition.
A new chip plant can easily cost $20 billion. Called a prepayment, the extra cash from the whale makes paying for Intel’s new chip plants much easier.
In fact, Intel said the infusion enables it to accelerate the buildout of its mega-projects in Arizona.
Better yet, analysts believe there is another potential whale looking to get in on the action.
Now, Intel has kept its whale investor and the exact amount they put down a secret.
So it’s not independent from TSM just yet. But this recent investment brings the company one step closer.
This is exactly what Intel needs. The huge prepayment means it won’t have to borrow as much money to fund the projects.
It also means more reliable income since companies are already lining up to buy the new plants’ production of high-end chips.
America’s Technological Moat Is Widening
Thanks to these recent developments, Intel’s CEO has said the company could take the trophy of top semiconductor manufacturer.
And bring it back home to America.
The secret to achieving this is the 18A node. It’s Intel’s newest tech that finally has a chance at dominating the market.
Thanks to the whale, it’s on track to arrive in 2024 instead of 2025.
This is phenomenal news for America as a whole. And it should boost almost every corner of our economy in the coming years.
Chip independence, and potential domination, will also widen the technological moat between America and its adversaries.
Here are Wide Moat Research, our goal is to steer you towards companies with moats that beat out all their competition, allowing you to profit.
Although Intel cut its dividend by 66% in Q1 of this year due to poor earnings, if this prepayment from Intel’s whale investor does make it the number one semiconductor manufacturer in the world… it could see huge gains in the future.
In the meantime, we’ll continue to select the best homegrown companies that will benefit from reindustrialization. We’ve put together a list of our favorite sleep-well-at-night (SWAN) income payers for readers of our Intelligent Income Investor service.
If America does become an independent and leading chip manufacturer, a whole new level of wealth will be at the fingertips of everyday American investors. So make sure you’re positioned ahead of time, before the new era takes off.
Happy Investing,
Stephen Hester
Analyst, Intelligent Income Daily