The Chip Insider®– Can Intel be saved?
Author: G. Dan Hutcheson
In the latest edition of The Chip Insider®, explore Pat Gelsinger’s strategy, potential Intel splits, government intervention, buyouts, and the challenges shaping its future.
Can Intel be saved? This is the hottest question today… Then the questions diverge to: was Pat’s strategy a good one? And the different approaches to saving Intel, such as: Will splitting them into separate Product and Foundry companies save one or the other? Will the US Government rescue Intel? Are they too big to fail? Can someone like GlobalFoundries, Qualcomm, or Broadcom buy them?... As I see it, Intel has two almost insurmountable problems.
The first is … becoming caught up in the 2021 tornado of the chip shortage and the subsequent CHIPS Act, which led to capacity expansion plans that far exceeded any reasonable demand projections… The second problem … The human resource bleed will be hard to recover from, because “semiconductor R&D is a team sport” – as Mark Bohr put it…
Will splitting them into separate Product and Foundry companies save one or the other? Hence, Intel's product might survive, causing it to go the way of Motorola and Texas Instruments … This is why Pat’s strategy of taking the foundry path to volume was the only correct one. The beauty of the fabless/foundry model is it separates the risk of market-winning product designs from the risk of developing leading-edge capacity into fabless and foundry entities… The problem with the IDM model is that it bears the full risk of both sides, hence Intel’s failure…
Intel Foundry will likely … To stay on the leading edge, a foundry needs a volume runner to drive yields and manufacturing excellence after the initial risk production ramp…
Will the US Government rescue them? …
Is Intel too big to fail? I doubt it. If you look at all the ‘too big to fail’ rescues they cover companies where the loss would hit too many voters for politicians to ignore…
Can someone like GlobalFoundries, Qualcomm, or Broadcom buy them? Some may have hope because Trump is in the Whitehouse. But it is doubtful China would approve and their market is too important to ignore…
What can save Intel…
Maxims: Never let investors dictate strategy
“Intelligence is quickness in seeing things as they are” — George Santayana
