Intel facing the abyss: promises of resurgence and leadership crisis

Foundry, a business that has not been able to get up

Banjarin explained that among the arguments why Intel can move forward is the launch of its Lunar Lake chips, which could help it regain leadership in computers due to its features that increase the performance of the equipment. However, other analysts said the main problem was its chip manufacturing business.

When Gelsinger returned to Intel. It did so with a firm vision: the company had to regain leadership in the manufacturing of processors and that is how it came up with the idea of ​​building factories in the United States and other parts of the world to complete its IDM 2.0 (Integrated Device Manufacturing) strategy.

“Not only were we going to be part of the innovations, we are also going to manufacture them,” he told Expansión last year about the investment plan of more than 100,000 million dollars in various areas of the planet.

After Gelsinger’s decision to leave the company became public, Citi’s US semiconductor research leader, Christopher Danely, said Intel should abandon its efforts in the Foundry division.

“The problem is this insistence on the foundry business. We think there is very little chance that Intel will succeed. Most people we talk to in the semiconductor industry know this, they realize that Intel has been at this for a long time. That’s why we think they should get out of the foundry business,” the analyst said.

Given the current context of the company, experts point out that the next CEO must be someone with a past in the industry to calm the sector and customers who currently might have a feeling of distrust towards Intel.

Mandeep Singh, senior analyst at Bloomberg Intelligence, explained that hiring an executive with business experience but no technical knowledge would be a major mistake that would generate further concern in the sector.

“If the board were to hire someone new without the kind of credentials that Pat had, it would really create more uncertainty and probably a loss of market share for hyperscalers that make their own chips,” Singh said.

The search for a suitable executive

According to Singh, Gelsinger was a character with a notable resume in the industry, but “the fact that he could not turn the situation around shows how difficult it is to do so in a case like Intel’s.”

Now, the company is looking for its next CEO and as part of this process announced two new members to the board of directors. They are Eric Maurice, former CEO of photolithography company ASML, and Microchip Technology interim CEO Steve Sanghi.

This move is intended to ensure that the board has directors with experience in the field of semiconductors, something necessary for Intel at a time of crisis and cost reductions.

“Eric and Steve are highly respected leaders in the chip industry, whose deep technical, executive experience and operational rigor make them great additions to Intel’s board of directors,” said the company’s interim CEO, Frank Yeary.

The competition advances

While Intel has faced major crises in recent years, its competitors have managed to advance their goals. In the pandemic, AMD had a more agile reaction to market challenges and began to gain share in the microprocessor sector.

By mid-2022, Intel’s size was around $145,000 million, AMD, for its part, already exceeded $150,000 million, while Nvidia was already playing in other leagues, as it began its path to becoming the company most valuable in the world, exceeding the value of 2 trillion dollars.

Likewise, while Intel has no head in its leadership, this 2024 Lisa Su, CEO of AMD, was chosen as CEO of the year by Time magazine, due to her “transformative leadership over the last decade.”