Intel’s (INTC) handling of a security bug in CPUs is not the company’s best moment. The denial that the problem is industry-wide and not specific to Intel may hurt the company’s reputation in the long-run. Investors holding INTC stock should scrutinize the company’s Public Relations releases as the story unfolds.
Intel claimed that ARM Holdings would work with it and Advanced Micro Devices (AMD) to fix the security vulnerability. But “Rogue Data Cache Load” and "Branch Target Injection" tests confirm that the problem is on Intel chips. It is more difficult to exploit AMD CPUs.
The security hole will hurt Intel’s branding in the near-term. Apple (AAPL) said that all its devices are affected by the processor exploits. On January 5, Intel said the performance impact on affected CPUs would be minimal. Apple’s independent tests also confirm no speed tradeoff for Intel’s security fix. Microsoft (MSFT) said the end-user would not be affected from the Intel fix, though it did not say if it would need more datacenter hardware to keep performance levels the same.
Takeaway
Intel had a decent game play with Coffee Lake, the next chip release that would compete with AMD’s Ryzen chips. But corporate consumers and end-users may have second thoughts bringing their business to Intel without question. That could give AMD an edge and give sales a lift in the near-term.
