So much is no longer running smoothly
The undisputed manufacturing artist Intel around 15 years ago is weakening on several fronts at the same time. Intel completely missed the smartphone boom, because the Atom chip for mobile devices at the time was spurned. At the same time, there were increasing mishaps in the development and manufacture of new processor generations, which were associated with regular postponements. In the Windows world, however, AMD started a comeback and with its current portfolio also outperforms many Intel offers. At the same time you can hear that Microsoft is considering its own processors.
The stock market is getting increasingly dissatisfied
Certain unrest is spreading among investors, the share is currently quoted lower than at the time of the stock market crash in March 2020. Claims after a change of course Big changes are being made, including by the influential Third Point hedge fund. Its CEO Daniel Loeb has just turned to Intel and relentlessly explains the problems: There is a mass exodus of the best engineers, because they are demoralized by the status quo. Intel must stop this exodus immediately in order to turn things around. Otherwise, there is a serious risk that America’s access to ultra-modern chip technology will erode – and instead one will have to rely on geopolitically more unstable markets from Asia.
A giant is eroding
According to Loeb, the pole position has long been lost, both to Samsung and Apple’s chip maker TSMC. AMD is also gaining market share, while Nvida is dominating the artificial intelligence market. Third Point is also watching with concern the many research projects to design chips without Intel’s involvement. For Intel’s future, it is essential to offer products again that can be used to address customers such as Apple, Microsoft or Amazon. On the one hand, this affects the classic computer market, but above all solutions for data and computing centers. According to the latest quarterly figures, there are also signs of a certain weakness.
Solution: Separation of business areas?
As a radical proposal, Loeb throws in the room that Intel should evaluate all strategic alternatives, including splitting chip design and semiconductor production into two separate areas – including joint ventures with other providers. One of the difficulties is that Intel can only react very poorly to customer requests. If, on the other hand, the development department acted more freely, it would be possible, according to Third Point, to serve more customers with tailor-made products instead of primarily relying on standard platforms. In any case, there is not much time left, according to the assessment.