Key Points
- Intel and Micron are two of the biggest players in the semiconductor industry, with Intel being larger in terms of market capitalization and revenue.
- Intel experienced a significant drop in sales in the first quarter of 2023, while Micron has been facing less demand for memory chips and excess inventory.
- Both Intel and Micron are well-positioned for long-term growth in the semiconductor industry, with Intel focusing on AI and GPUs and Micron focusing on memory chips and storage products.
When comparing Intel and Micron, you need to consider many factors to determine which chip stock is better for your portfolio. Intel and Micron are two of the biggest players in the semiconductor market. With the growing demand for memory chips and advancements in artificial intelligence, both companies have been striving for excellence through innovation and development.
As a chip industry giant, Intel has held a strong market share for decades, while Micron has brought innovative flash memory and advanced chips to the table.
Let’s compare and evaluate both companies’ financial performance, market trends, and potential for long-term growth.
Intel vs. Micron: Side-by-Side Comparison
| Intel Corporation | Micron Technology, Inc. | |
|---|---|---|
| Date Founded | July 18, 1968 | October 5, 1978 |
| Ticker Symbol | INTC | MU |
| Stock Exchange Listing | NASDAQ Global Select Market | NASDAQ Global Select Market |
| Initial Public Offering (IPO) | October 13, 1971 | June 1, 1984 |
| Stock Price | $36.37 | $67.66 |
| Shares Outstanding | 4,133,000,000 | 1,091,000,000 |
| Market Capitalization | $145.88 billion | $73.23 billion |
| Annual Revenue (2022) | $63.05 billion | $27.15 billion |
| Dividend Yield (TTM) | 3.49% | 0.69% |
| Stock Splits | 10/09/1980 – 2:1 split 07/01/1983 – 2:1 split 10/29/1987 – 3:2 split 06/07/1993 – 2:1 split 06/19/1995 – 2:1 split 07/14/1997 – 2:1 split 04/12/1999 – 2:1 split 07/31/2000 – 2:1 split | 04/19/1994 – 2:1 split 05/23/1995 – 2:1 split 05/02/2000 – 2:1 split |
Intel vs. Micron: What are the Differences?
Intel and Micron are two of the biggest players in the semiconductor industry, but there are some key differences between the two. Intel is a much larger company than Micron, with a market capitalization of around $145 billion compared to Micron’s market cap of about $73 billion. This size difference is also reflected in their revenues, with Intel generating over $63 billion in revenue in 2022 while Micron generated around $27 billion.
Intel had a tough first quarter in 2023. Their sales plummeted due to a big drop in demand for semiconductors, especially those for PCs. To be exact, their revenue fell a whopping 36% to $11.7 billion in just three months! In addition, they’re also struggling to keep up with NVIDIA in the race to create the chips needed for the new and popular ChatGPT-style generative AI.
Conversely, Micron has been experiencing less demand for memory chips, resulting in excess inventory. The company has warned that it may supply fewer memory chips in 2023 and beyond.
Micron is reportedly making this forecast due to a change in its approach to capital investment. This change in focus is expected to impact the company’s production capabilities and may result in reduced memory chip supply in the coming years.
Dividend Yield
Investors often look at dividend yield when deciding which company to invest in.
Intel currently has a 3.49% dividend yield. It paid a quarterly dividend of $0.125 per share on May 4, 2023, and the total payout to shareholders for 2022 was $1.46 per share. Over the past few years, Intel’s dividend payments have remained stable, with only minor fluctuations. However, the company’s dividend payout ratio has increased over the years.
In contrast, Micron has a shorter history of paying dividends than Intel. The company’s latest dividend yield is 0.69%, and it recently paid $0.115 per share in dividends on April 6, 2023. Over the past few years, Micron has increased its dividend payments to give shareholders greater value. The increased payouts also indicate the company’s improving financial performance and growth prospects.
Looking ahead, both companies are likely to continue paying dividends. While Intel may struggle to increase its dividend payout due to its declining earnings and weak demand for its products, Micron may increase its dividend payments in response to the industry’s cyclical nature.
Market Outlooks and Strategies
As the semiconductor industry continues to thrive and expand, it’s important to consider the market outlook and strategies of prominent players like Intel and Micron Technology. While there are concerns about the cyclical nature of the industry and potential downside due to market conditions, both companies are well-positioned for long-term growth.
Intel has been investing significantly in artificial intelligence and graphics processing units (GPUs) and expanding its product line beyond central processing units (CPUs). On the other hand, Micron has focused on memory chips and storage products, with strong demand for flash memory.
Both companies have strong potential and upside, and investors should consider their respective strategies in light of the competitive semiconductor market.
©Ralf Liebhold/Shutterstock.com
Demand for Memory Chips
Micron and Intel are two key players in the memory chip market. Micron is a leader in the Dynamic Random-Access Memory (DRAM) and NAND flash memory markets. At the same time, Intel has historically focused on CPUs and GPUs.
Demand for memory chips caused Intel and Micron to slump considerably as the chip cycle tipped downward. This comes from various factors that have impacted the market dynamics, including the global chip shortage and slowing demand for smartphones.
What Industry Insiders Say
According to industry insiders, the ongoing global semiconductor shortage has disrupted supply chains and affected the availability of chips across different industries. At first, chip manufacturers experienced a surge in demand, leading to increased production. However, the market has now reached a point where the supply has caught up with the demand, creating a potential oversupply situation.
Another contributing factor to the decline in demand for memory chips is the slow growth in the smartphone market. Manufacturers are facing a mature market with longer replacement cycles, saturation in major markets, and a need for significant technological advancements driving consumer demand. This, in turn, affects the demand for memory chips, a crucial smartphone component.
In response to these market dynamics, Intel and Micron took proactive measures to prepare for the slump. They had to adjust their production plans and adopt a cautious approach to avoid inventory buildup. Intel, for instance, is reported to have reduced its production outlook and is focusing more on supply chain management to navigate challenging market conditions.
While the industry has a decline in memory chip demand, it is important to note that long-term prospects remain promising. Memory chips are fundamental components of various electronic devices, including smartphones, computers, and servers. As technologies like 5G, artificial intelligence, and the Internet of Things (IoT) advance, new opportunities and increased demand for memory chips will exist.
Semiconductor Companies and Market Trends
The semiconductor market is highly competitive, with major players like Intel, Micron, Samsung Electronics, and Qualcomm vying for the greatest market share. The size of the global semiconductor market, which was $527.88 billion in 2021, is anticipated to increase by 12.2% CAGR from $573.44 billion in 2022 to $1,380.79 billion in 2029.
Recent developments in the market have shown that Intel has been losing market share to competitors, with Micron Technology and Samsung Electronics gaining ground. As a result, Intel has lost its position as a leader in the market.
The top five semiconductor companies with the largest market share globally are:
- Samsung Electronics – 10.9%
- Intel Corporation – 9.7%
- SK Hynix – 6%
- Qualcomm – 5.8%
- Micron Technology – 4.6%
U.S. semiconductor companies hold 47% of the global market, outpacing several Asia-Pacific nations like South Korea, Japan, Taiwan, and China.
To cope with the cyclical nature of the semiconductor industry, companies have made adjustments such as investing in research and development, expanding manufacturing capabilities, and adopting innovative technologies. However, the industry still faces significant challenges, such as the current chip shortage, which has led to robust demand and prices for memory chips. Companies must navigate these challenges to maintain their market position and remain competitive in the industry.
Final Thoughts
Intel and Micron are well-established semiconductor companies with challenging market conditions due to the current chip shortage. Both companies have responded by adjusting their production plans and investing in research and development to remain competitive.
While Intel has taken a hit in market share, they remain a top player in the industry. Ultimately, investors must assess both companies’ performance and determine which fits their portfolio best.
The image featured at the top of this post is ©graphicINmotion/Shutterstock.com.
