Piper Jaffray Comments on Intel Corporation Following Company Analyst Day

In a report published Friday, Piper Jaffray analyst Jagadish Iyer commented on recent developments related to

. In the report, Piper Jaffray noted, “Intel indicated that it expects its 2014 capex to be flat y/y at $11bn (PJC: $9bn) with ~$7bn being earmarked for capacity related spending (both front end and back end equipment) with remaining spend to be allocated for Development, Corporate/Others and for 450mm related activity.With 14nm high volume ramp beginning 1Q14, post debugging of yield issues, Intel indicated that it will deploy more of multiple patterning schemes with EUV being not cost effective for 10nm as that ramp begins in 2H16 based on its tick-tock strategy. While this certainly does not bode well for ASML's EUV adoption, we believe this scenario benefits companies like KLA, AMAT, LRCX as double/quad patterning becomes more pervasive given more inspection, etch and deposition tools would be needed. While Intel indicated a 27% increase in capital intensity in moving from 22nm to 14nm, it sees density scaling enabling lower $/transistor cost.” Intel Corporation closed on Thursday at $25.23.