The Dow Jones Industrial Average (^DJI -0.11%) was up modestly by late Monday morning, having gained 0.21% at 11:45 a.m. EDT. Senate Republicans are expected to unveil a new $1 trillion stimulus plan on Monday that will reportedly include a reduced supplemental unemployment benefit and a second round of direct payments to many Americans.
Working against the Dow on Monday were Intel (INTC 0.64%) and Walgreens Boots Alliance (WBA -1.33%). Intel has reportedly placed a large order with third-party foundry Taiwan Semiconductor Manufacturing, marking a potential sea change in the semiconductor industry. Meanwhile, Walgreens has announced that its CEO has decided to step down.
Image source: Getty Images.
Intel reportedly places order with TSMC
Chip giant Intel disappointed investors last week when it disclosed in its second-quarter earnings report that chips based on its 7nm manufacturing process were behind schedule. The company has struggled for years getting its 10nm process ready for mass production -- Intel is still launching mainstream PC chips built on its 14nm process.
During the earnings call, Intel CEO Bob Swan dropped a bombshell: The company was considering outsourcing manufacturing to third-party foundries if it made sense to do so. "As an example, our data center GPU design, Ponte Vecchio, will now be released in late 2021 or early 2022, utilizing external and internal process technologies, combined with our world-leading packaging technologies," Swan said.
On Monday, Taiwan-based newspaper Commercial Times reported that Intel had placed a massive order with TSMC for 6nm chips. The order is reportedly for 180,000 wafers, roughly the same size order as that placed by rival Advanced Micro Devices. TSMC's leading-edge capacity is now reportedly fully booked for the first half of 2021.
Intel is unlikely to give up on in-house manufacturing entirely, like 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 production would allow it to keep pace with its rivals.
Shares of Intel were down about 0.4% by late Monday morning, while TSMC stock was up more than 10%.
Walgreens CEO steps down
Walgreens has been hit hard by the COVID-19 pandemic. In the fiscal third quarter, which ended in May, the drugstore chain reported an operating loss of $1.6 billion. That loss was driven by weak sales, a shift toward lower-margin products, and a large write-off related to the U.K. business.
On Monday, the company announced a leadership shake-up. Stefano Pessina has informed the board of directors that he will be stepping down as CEO. Once the board decides on a new CEO, Pessina will take over as executive chairman.
This move comes after years of underperformance for the stock. Even before the pandemic, shares of Walgreens were trending lower. Since peaking in 2015, Walgreens stock is down about 60%. So far this year, the stock has shed roughly 33%.
News of the CEO's resignation was not well received by the stock market, with shares of Walgreens down about 2.1% by late Monday morning.
