Why Intel Stock Dropped Today

Intel (NASDAQ: INTC) banal slid 4.3% done 11:35 a.m. ET arsenic investors caught a lawsuit of the Mondays -- and resumed worrying astir the marketplace for representation chips utilized successful the artificial quality industry.

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SK Hynix: coming to America

South Korea's SK Hynix (NASDAQ: SKHY), present trading connected Nasdaq, whitethorn beryllium the catalyst. SK shares soared 14% connected their Nasdaq debut earlier turning process this greeting and selling disconnected by much than 6%. Now, Intel banal is pursuing SK banal lower.

At archetypal glance, this whitethorn not marque overmuch sense. SK Hynix specializes successful machine representation -- high-bandwidth representation composed of DRAM representation chips primarily, wherever SK holds a 50%-plus marketplace share, but besides DRAM successful general, wherever its marketplace stock is 29%, and NAND flash memory, too, wherever its marketplace stock is astir 20%.

Intel doesn't play a large relation successful any of these markets, being chiefly a CPU specialist.

However, successful a representation marketplace facing perchance its "worst-ever proviso shortage," Intel has been exploring entering representation production, announcing successful February a concern with tech elephantine Softbank Group (OTC: SFTBF) to make a caller benignant of representation technology.

What this means for Intel banal

Although it's aboriginal days successful the Intel-Softbank partnership, the companies are said to beryllium processing a "high capacity, precocious bandwidth, and debased powerfulness consumption" spot that could enactment Intel successful contention with SK Hynix -- which conscionable got a $26.5 cardinal currency injection from its Nasdaq listing, making it a stronger competitor.

How atrocious is this quality for Intel investors? Honestly -- astir apt not precise bad. We don't adjacent cognize if thing volition travel of the Softbank concern aft all. Still, with Intel banal costing 900x net today, it's astir apt champion to beryllium safe, and today's quality seems a good excuse to merchantability Intel stock.

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