Recent situation of Intel Corporation (INTC.US) after changing the leadership: focusing on organizational flattening and efficient execution, advancing technology improvements and financial optimization simultaneously.

Morgan Stanley recently released a research report stating that David Zinsner, the Chief Financial Officer of Intel Corporation (INTC.US), attended the company's TMC annual conference and shared some key points. David Zinsner pointed out that Intel Corporation's new CEO, Pat Gelsinger, aims to drive a cultural transformation within the company by eliminating redundant bureaucracy, promoting a flatter organizational structure, building small, highly empowered teams, and focusing on execution. The entire team is dedicated to promoting a more flexible, execution-oriented mindset within the organization. More importantly, the team hopes to drive product and service improvements by focusing on customer feedback. In the field of artificial intelligence, Gelsinger, with his past experience and background, has a unique perspective to formulate strategies. David Zinsner stated that, regarding the 18A process node, the team is focused on robust execution and believes that this node (including Gate-All-Around technology) will bring differentiated competitive advantages and better economic benefits. In terms of foundry business, the team believes that the 18A node is the first step in improving foundry maturity, and the 14A node is designed specifically for foundry business and will be further enhanced. Substantial progress is being made in yield improvement. The team still aims to achieve breakeven in foundry business by 2027, with the support of "tens of billions" of external foundry revenue. The company's wafer manufacturing relies on external partners for 20%-30% of production. David Zinsner pointed out that Gelsinger believes Intel Corporation still has significant opportunities to improve chip design quality, efficiency, and execution. The team believes that Intel Corporation already has a strong ecosystem, which serves as a significant barrier to entry in the market. The team is confident about the 18A process products, and the transition to the Panther Lake platform in the future will drive more wafers to be sourced internally. The initial feedback on the Diamond Rapids chip is also very positive. David Zinsner also added that the team's current focus is on improving free cash flow, and the recent Altera transaction will help deleverage the balance sheet. In addition, the advancement of the Panther Lake platform is expected to further improve profit margins and drive better cost structures. The research report showed that Morgan Stanley's stock rating for Intel Corporation remains "underweight," with a target price of $20 given on April 25th.