The following is an excerpt from Johanna Bennett | October 26, 2015 | Barrons.com |
Intel’s ( INTC ) big investment in building capacity to make memory chips at a factory in Dalian, China is a big win for chip equipment companies.
That’s the opinion of Nomura analyst Romit Shah in a note published today in which he weighed in on the various implication from the news, which broke last week. Specifically, Shah cited Lam Research (LRCX) as a top pick, and rival Applied Materials (AMAT), which the firm recently upgraded to Buy from Neutral with a $22 price target.
Bloomberg reported on Oct. 20 that Intel’s factory in Dalian is expected to start manufacturing in the second half of 2016 and the company may subsequently hike its investment to $5.5 billion.
As my colleague Tiernan ray reported in this very blog last week, the news fueled worries about Micron Technology (MU), which is a partner with Intel on many chip-making projects. Many worried that Intel will become more of a rival, sending Micron down 7% last week.
For Intel, however, the plan diminishes the importance of the merger between Western Digital (WDC) and SanDisk (SNDK).
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