Memory chips become scarce and expensive due to surging demand from AI data centers, emerging as a key bottleneck in AI infrastructure expansion worldwide.

  • Intel’s Lip-Bu Tan is working on new approaches to stack CPUs and memory components.
  • The chipmaker recently hired former SK Hynix CEO Seok-Hee Lee as a senior leader at Intel’s foundry business.
  • Stocktwits sentiment for INTC was ‘bearish’ on Wednesday.

Intel Corp. CEO Lip-Bu Tan is exploring new ways to stack CPUs and memory components, an approach that could help the chipmaker better manage ongoing memory shortages and add further legs to its spectacular rally this year.

“I think there's a lot of ways we can really do stacking together, and also try to find some new architecture for memory. Right, and I think in some way the memory, a lot of innovation is not there,” Tan said in the TechSurge podcast hosted by investor Michael Marks.

“One of my pet projects is looking at some of the new memory architecture,” he said. Tan’s comments come as memory chips become scarce and expensive due to surging demand from AI data centers. 

Memory makers say their future supply is largely sold out for the next two years even as they ramp up production. Tech companies and analysts say memory has become a bottleneck for AI infrastructure expansion worldwide, with companies from Apple to Nintendo already raising product prices.

Tan highlighted that he recently hired his “good friend” Seok-Hee Lee, the former CEO of Korean semiconductor giant SK Hynix, as executive vice president of Intel Foundry.

“So you kind of know something that I'm thinking about. We are not ready to unfold, but you know I always have something thinking about what is the short term, mid term, long term requirement,” Tan said.

Recent Catalysts for INTC

Last month, Intel reported that its second-quarter revenue surged 25% year-over-year to $16.1 billion, powered by a 59% growth in its data center chips business. 

"In data centers, the CPU is taking off," Tan stated in an interview with Bloomberg at the time. "Demand is outpacing our increasing supply, and so those are good problems to have." 

On Tuesday, the chipmaker announced that it raised $20 billion in an equity offering, its first since going public in 1971. The bulk of the proceeds would go towards investments in new facilities and advanced packaging capabilities.

Retail View On INTC

On Stocktwits, retail sentiment for INTC has dipped over the past week and was ‘bearish’ on Wednesday amid ‘low’ message volume.

“$INTC Large orders going through prior to overnight trading. Suspect a big move incoming,” a trader flagged. 

Another trader said: “$INTC many fail to understand that INTC is no longer a chip company in a turnaround, it has become a strategic business backed by World Powers and enormous wealth with governments making favorable decisions for the business!”

As of their last close, Intel shares are up 165% year to date.

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