- 2 hours ago
- Medhi Naitmazi
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An Intel investor with a billion dollar stake in the chipmaker said the chipmaker needed to make drastic changes to face its black year – including trying to win back Apple as a customer.
Intel stock fell 21% during 2020 ahead of the 10-figure hedge fund investment from Third Point, which is pushing for a fundamental change in the business …
Intel is up against the wall
Reuters Third Point reports that it has rallied behind recent suggestions that Intel should abandon the manufacturing side of its business, simply design chips and then commission companies like TSMC to produce them.
Activist hedge fund Third Point LLC is pushing Intel Corp to explore strategic alternatives, including whether to keep chip design and production under one roof.
One of the main reasons for this is that Intel has fallen behind in manufacturing capabilities, still working with 10nm and 14nm processes while TSMC has moved to 5nm. The A14 chip of the iPhone 12 and the M1 chip of the latest Macs are produced by TSMC using a 5nm process. The company plans to use a 4nm process for the 2022 iPhone lineup, the iPhone 14.
Intel’s top investor says there is no time to waste. Here’s what Daniel Seth Loeb says in his email:
Intel lost its pole position in microprocessor manufacturing to Taiwan Semiconductor Manufacturing Co and South Korean company Samsung Electronics Co Ltd.
Without an immediate change at Intel, we fear that the United States’ access to an advanced semiconductor supply may erode, forcing the United States to rely more on a geopolitically unstable East Asia for Power everything from PCs to data centers to critical infrastructure and more.
More optimistically, the letter calls on the company to find ways to keep Apple’s business – as well as that of other customers leaving Intel.
Intel customers, such as Apple, Microsoft, and Amazon are developing their own silicon solutions in-house and sending these designs to be manufactured in East Asia.
Intel must come up with new solutions to retain these customers rather than letting them go and make their own chips elsewhere. On the other hand, it is difficult to imagine Apple going backwards when its AXX and MX chips are far above Intel processors in all areas. Remember that a MacBook Air M1 at € 1,129 has doubled its autonomy and made a leap in performance thanks to the new house chips. Not to mention that the entire ecosystem is now under the same architecture, making it easier for Apple engineers and app and game developers to work.
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