the Dow Jones Industrial Average (DJINDICES: ^ DJI) It rose modestly late Monday morning, having gained 0.21% at 11:45 am EDT. Senate Republicans are expected to unveil a new $ 1 trillion stimulus plan on Monday that is supposed to include a supplemental reduced unemployment benefit and a second round of direct payments to many Americans.
Working against the Dow on Monday were Intel (NASDAQ: INTC) and Walgreens Boots Alliance (NASDAQ: AMB). Intel has reportedly placed a large order with a third-party foundry Taiwan semiconductor manufacturing, marking a possible radical change in the semiconductor industry. Meanwhile, Walgreens has announced that its CEO has decided to resign.
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Intel reportedly makes an order to TSMC
Chip giant Intel disappointed investors last week when it revealed in its second-quarter earnings report that chips based on its 7nm manufacturing process were behind schedule. The company has struggled for years to prepare its 10nm process for mass production: Intel is still releasing conventional PC chips based on its 14nm process.
During the earnings call, Intel CEO Bob Swan dropped a bomb: The company was considering outsourcing manufacturing to third-party foundries if it made sense to do so. “As an example, the GPU design of our data center, Ponte Vecchio, will now be launched in late 2021 or early 2022, using external and internal process technologies, combined with our world-leading packaging technologies,” he said. Swan.
On Monday, Taiwan-based newspaper Trading times reported that Intel had placed a bulk order with TSMC for 6nm chips. According to reports, the order is for 180,000 wafers, approximately the same size as the order placed by the rival Advanced micro devices. According to reports, TSMC’s cutting-edge capacity is now fully reserved for the first half of 2021.
Intel is unlikely to give up on in-house manufacturing altogether, as AMD did in 2009 when it spun off its manufacturing business as GlobalFoundries. But given the chronic problems Intel has had with its process technology, outsourcing at least some of the production would allow it to keep up with its rivals.
Intel shares fell 0.4% late on Monday morning, while TSMC shares rose more than 10%.
Walgreens CEO resigns
Walgreens has been hit hard by the COVID-19 pandemic. In the fiscal third quarter, which ended in May, the pharmacy chain reported an operating loss of $ 1.6 billion. That loss was driven by weak sales, a move to lower-margin products and a large write-off related to the UK business.
On Monday, the company announced a change in leadership. Stefano Pessina has informed the board of directors that he will resign as CEO. Once the board decides on a new CEO, Pessina will take over as CEO.
This move comes after years of underperformance for the stock. Even before the pandemic, Walgreens’ shares were trending down. Since its peak in 2015, Walgreens shares have fallen approximately 60%. So far this year, the shares have lost approximately 33%.
The news of the CEO’s resignation was not well received by the stock market as Walgreens shares fell approximately 2.1% late on Monday morning.
