Earlier this year, the new Director General of Intel, Lip-Bu Tan, made Frank comments on how the Silicon Valley flea manufacturer continues to manage.
“For long enough for Intel, we have lagged behind innovation. Consequently, we have been too slow to adapt and meet your needs,” Tan told Intel customers and partners in a company event At the end of March. “You deserve better, and we have to improve, and we will.”
Intel, a technological giant based in Santa Clara who fueled the rise of personal computers, is at a large crossroads in the history of 57 years of the company while competition to dominate artificial intelligence degenerates. Known for making “brains” that feed computers, Intel was the most precious American manufacturer of American paples before Nvidia won first place. It is also faced with more competition from rivals such as advanced micro-appearances and Samsung.
The frenzy of the AI greatly benefited Nvidia, a company that created a specialized computer chip which turned out to be precious not only for games but also for the formation of AI models, data centers and robotics. While the value of Nvidia has increased to more than 4 dollars, Intel saw its market value fall to around $ 87 billion.
“It will be difficult for them,” said Mario Morales, vice-president of the group for the activation of international data corporation technologies and semiconductors. “They have missed a very big change and they do not yet have the AI products to compete – and this market develops quickly.”
Over the past five years, Intel’s equity, has plunged more than 58%. He posted a net loss of $ 18.8 billion in 2024 and plans to reduce around 25,000 workers this year.
The long history of Intel was filled with ups and downs, but a series of great missed opportunities, manufacturing delays and management failures have hampered the growth of a long -term company synonymous with the rise of Silicon Valley, according to analysts. Tan, a 65 -year -old technological leader who became CEO of Intel in March, tries to direct the company in the right direction.
Intel has bet big on its foundry activity, facing Taiwan Semiconductor Manufacturing Co., which manufactures fleas for other companies such as Apple and Nvidia. REining of costs, Intel has abandoned manufacturing projects in Germany and Poland while slowing down the construction of its Ohio factories.
“There are no more virgin checks. Each investment must have an economic meaning,” Tan told employees in a memo last week.
The rise and the fall of Intel
Founded in 1968, Intel has focused strongly on the research and development of new technologies in its early days.
Robert Noyce and Gordon Moore, already well -known technological personalities, have left their employment at Fairchild semiconductor to launch what was going to become Intel. Noyce co-invented the integrated circuit, laying the basis for the development of laptops, smartphones and other modern electronics. Moore was known to make an observation which has become a guiding principle for the semiconductor industry.
The company developed quickly in its early years. Intel engineers worked in a conference room in Mountain View, California, before the company moved to its own installation in Santa Clara. The company has published memory fleas before creating the world’s leading global microprocessor available in the world and other innovations that have enabled companies to build more affordable computers. While Dell’s IT sales, Microsoft and other technological companies increased, Intel saw its market value reaching a record of $ 495 billion in 2000 Reuters.
But the company also made a series of missteps that would haunt it later, analysts said. Intel refused to comment.
“It has been on a low basis for so long because of these bad historical decisions,” said Jacob Bourne, technological analyst at Emarketer. “Now, it is at this stage where he must reduce all these costs to try to become profitable.”
One of the greatest missed opportunities for Intel: Providing fleas for the first iPhone in 2007.
The former Director General of Intel, Paul Otellini, said The Atlantic In 2013, Apple wanted to pay a certain price for a chip, but it was lower than Intel provided. This prediction proved to be wrong and Otellini expressed his regret for not having followed his intestine.
“We ended up not winning it – or transmitting it, depending on how you want to see it. And the world would have been very different if we had done it,” said Otellini in this interview.
But strategic missteps were not the only Intel problems. The company has undergone delays in process technology, opening the door to its competitors such as AMD which offered powerful and effective fleas to capture customers.
Pat Gelsinger, who was Director of Intel technology before returning to lead the flea manufacturer in 2021, focused on an ambitious and expensive recovery plan for the company. He set an objective in which Intel would develop five new nodes of semiconductor processes in four years.
The federal government granted billions of dollars to Intel last year to support its expansion of the manufacture of semiconductors in the United States, but the company’s net losses have also expanded. In 2024, Intel’s Foundry’s company reported an operating loss of $ 13.4 billion, almost double compared to the loss of the previous year, according to its annual report.
“Gelsinger threw fuel on fire, because he began to spend money like crazy to develop this massive amount of manufacturing capacities for companies they did not have,” said Stacy Rasgon, Bernstein’s main analyst covering us semiconductors.
Then the council would have forced Gelterwho announced his retirement last year before Tan took the post of managing director.
Another recovery plan
The new Director General of Intel focused on reducing costs, especially around the company’s foundry business. He told employees in a note last week that the company had invested too much money without sufficient request.
And Intel said that he could take a break or interrupt his next flea manufacturing process technology called 14A if it cannot win a “significant” customer.
While Intel has been overshadowed by some of its competitors, the company is still a great player in the semiconductor industry.
IDC, who analyzed the income of semiconductors, said that in 2024, Intel ranked third behind Nvidia and Samsung. It fell in fourth place behind SK Hynix, a South Korean company that provides memory tokens during the first quarter of this year.
Analysts do not see Intel disappear so early. And as technological companies work on the deployment of the new equipment powered by AI, this could also present another opportunity for Intel.
Alvin Nguyen, principal analyst at Forrester, said that some of the concerns related to Intel’s difficulty could be “overestimated”.
“They may not be at the top as they were in the past, but they are still, in the end, very important for all industries because their tokens are used almost everywhere,” he said.
