Intel expects to spend billions to expand chip production – 06/20/2023 – Market

ANDsta is the edition of newsletterr Tuesday’s Market Sheet (20). want to receive it from monday to Friday at 7 am In your email? Sign up below:

---

Intel expands role to ‘turn the switch’

Intel agreed with the government of Germany this Monday (19) a subsidy package of ten billion euros (R$ 52.1 billion) to install in the country a factory of about 30 billion euros (R$ 156.5 billion).

The deal will be the US chipmaker’s third major investment in four days, following a $4.6 billion (R$ 21.9 billion) in Poland and a $25 billion (R$ 119.4 billion) in Israel.

Which explains: The series of deals is part of the American manufacturer’s restructuring plan, which has the support of the US government to reduce the distance to its competitors, mainly the Asian TMSC (Taiwan) and Samsung (South Korea).

Intel dominated the market at the end of the last century with the production of central processing units for computers –known as CPUs here in Brazil–, but saw its rivals grow from the popularization of cell phones and the production of chips for other companies.

• Understand: in this market, there are companies specialized in two processes, one involving the manufacture of components (TMSC and Samsung) and another that designs the circuits (Nvidia).

• Until recently, Intel was a “customer of itself”, but with the current reformulation it has become a supplier of chips so that other companies, such as Nvidia, can carry out the second process.

The company is expected to be one of the main beneficiaries of the Chips Act, a US$ 52 billion package approved by the US Congress to stimulate the industry, reduce dependence on Asian countries and keep the country ahead of China in the technology war.

• Intel factories located in the US can receive up to $12 billion –or about 23% of the total– in subsidies from the new law, according to the Financial Times.

---

Largest aircraft order in history

Airbus announced on Monday the biggest sale in the history of the airline industry.

In numbers: the low cost company IndiGo, from India, will buy 500 A320neo models.

• The acquisition surpasses the one made earlier this year, when Air India acquired 470 aircraft from Airbus and Boeing.

The announcements consolidate the Asian country’s position as a major emerging power in commercial aviation.

jackpot: estimates are that the deal with IndiGo, which dominates domestic traffic in India, could be above $50 billion (BRL 239 billion).

• The previous deal was estimated at $70 billion (R$ 334 billion today) divided between the two manufacturers.

• These values ​​involve list prices, but manufacturers often give significant discounts on large orders.

Airbus vs Boeing: the purchase of IndiGo gives strength to the French manufacturer in its dispute with the American arch-rival.

It is also a response to a deal announced last month, when Ryanair agreed to supply up to 300 aircraft with Boeing after a long row between the two.

Airbus continues to lead the market. This year until May, it delivered 244 aircraft, against 206 from Boeing.

---

Michael Jordan earns 10 times with an NBA team

Winner on court, profitable off court.

Basketball legend Michael Jordan will see his investment in the Charlotte Hornets, the NBA team, multiply by almost tenfold when he sells his majority stake in the franchise.

• The agreement with an investment consortium was disclosed last Friday (16) and provides that Jordan will maintain a minority stake.

In numbers: the star with the orange ball spent $275 million in 2010 (about BRL 484 million, at the time) to keep most of the shares of the Hornets, the team in the state where he played in high school.

• In this year’s agreement, the team was valued at $3 billion (around R$14.5 billion), according to the New York Times.

Profitable, but… The Hornets’ success on the court has not come close to its owner’s stellar career, which won six NBA titles with the Chicago Bulls.

• In the 13 years under Jordan, Charlotte’s team made the playoffs just three times, never making the playoffs once.

Serial business: the sale of the Hornets is one more in the midst of other billionaire agreements involving teams from American leagues. The franchises became more valued with the renewal of transmission agreements – now also disputed by streamings.

• Last December, control of the Phoenix Suns, also of the NBA, was sold for US$ 4 billion.

• In June 2022, the NFL’s Denver Broncos (American football) was purchased by the Walmart heir for $4.65 billion, the biggest deal in history involving American sports franchises.

---

Dollar at lowest in one year

The dollar followed its downward trend against the real this Monday and closed down 0.95%, the BRL 4,776the lowest level since May 2022.

The Stock Exchange also operated in a positive climate and rose 0.92%, at 119,857 points, the highest level since April last year. The day was one of reduced negotiations because of a public holiday in the USA.

Why is the dollar falling? Currency movements are often explained by internal and external factors:

Here, the Focus survey, which gathers market expectations, showed this Monday that analysts continue to see lower inflation not only this year, but also in the coming ones – a scenario that matters most for the Central Bank’s decisions going forward.

Outside, the dollar engages a sequence of devaluation against other currencies since the market anticipated that the Fed would stop the cycle of high interest rates – which happened last week. New increases this year, however, are still in the account.

Is it time to buy dollars to travel? The exchange rate is affected by many variables, so it is difficult to predict whether the currency should continue to fall or rise again.

• Focus, which compiled the estimates last week, has a median value of R$ 5 for the currency at the end of 2023.

• But there are houses that already see the dollar closing the year well below that – Goldman speaks of BRL 4.40.