Fitch is downgrading U.S. chipmaker Intel’s credit rating by one notch on Monday, based on a observe by the rankings company, which assigned a unfavourable outlook to Intel’s rating. Fitch downgraded Intel to BBB from BBB-plus, inserting it simply two notches shy of junk credit standing.
The downgrade follows Fitch’s evaluation that Santa Clara, California-headquartered Intel faces heightened challenges sustaining demand for its merchandise. Fitch cited rising competitors from friends akin to Dutch rival NXP Semiconductors , Broadcom Inc and Advanced Micro Devices .
“Credit metrics remain weak and will require both stronger end markets and successful product ramps, along with net debt reduction over the next 12-14 months” for Intel to get better its latest rankings, Fitch analysts wrote on Monday.
Fitch added that whereas Intel holds a greater market place than different equally rated friends, its monetary construction is comparatively weaker and it faces “higher execution risk.”
Intel nonetheless enjoys a powerful market place within the provision of PCs and conventional enterprise servers, Fitch famous, whereas warning the corporate faces heightened PC competitors from Qualcomm and AMD.
Intel might want to ramp up its PC shipments whereas additionally decreasing its steadiness sheet debt to get better its earlier credit rankings, Fitch mentioned.
The rankings company referred to as Intel’s liquidity profile “solid,” which as of June 28 consisted of a $21.2 billion combine of money, money equivalents and short-term investments, in addition to an untapped $7 billion credit revolver. It additionally had an undrawn $5 billion, 364-day revolver that may come due in January 2026, Fitch mentioned.
Fellow rankings company S&P Global equally downgraded Intel’s credit rating to BBB from BBB-plus in December, whereas Moody’s Ratings downgraded its senior unsecured debt’s rating in August final yr.
