Intel is going through one of the biggest crises in its history, progressively losing the dominant market position to which it has become accustomed, victim of successive blows by some long-standing partners. After news of CEO Bob Swan’s imminent departure, an ultimatum by an investment fund now emerges.
According to Reuters, Third Point LLC went public and asked Intel officials to respond vigorously to threats from AMD, Apple, Microsoft and other rivals. This investment group holds EUR 1 billion in shares of Intel and this puts them in a position that allows them to demand changes in the direction of the company.
Shareholders propose changes to fight Apple and AMD
One of the measures proposed by this investment fund is the separation of the processors’ design and manufacturing divisions, investing in the search for external collaborations for chip manufacturing.
The opening of its factories to the production of processors from other companies is seen as an advantage, preventing the production volume from being progressively directed to Asia.
Basically, since Intel seems unable to improve its offerings, unless it can manufacture the solutions of its rivals.
This move faces strong resistance from Intel directors, but its adoption can help reduce costs. Also in this regard, the need for greater discretion in acquisitions is also mentioned, where several billion euros have been spent without any practical result.
Intel fails to respond to competition
The brand was in a particularly delicate position after losing the leadership of the desktop processor market to AMD, and is also being overtaken by TSMC and Samsung in the volume of chip orders for other markets.
Intel’s manufacturing structure has struggled to deliver to its customers the processors they so desire, with much of its catalog lagging behind what is already offered by the competition.
If the rise in sales of portable computers still helped Intel in this atypical 2020, the company demonstrated a stark lack of capacity to keep up with demand. There is also the issue of additional damage caused by the loss of large customers, such as Apple, which has even chosen to embrace the manufacture of its own processors.
Third Point now requires Intel to take urgent action to explore alternative business strategies, first solving its “human capital management problem.”
This request comes from the fact that the company is losing its greatest talent to the competition, the result of a general lack of motivation with the current situation.
In a letter sent to the president of Intel, Omar Ishrak, reference is also made to Intel’s complete absence from the Artificial Intelligence market. This group fears that this could jeopardize the US’s access to future technologies and a semiconductor supply chain that could put the country in a delicate position.
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