After the disappointing financial performance in Q2, Intel has been plagued by a series of challenges. Its shares plunged, falling to the lowest point in over a decade, coupling with the suspension of dividend payouts, layoffs, and product failures. The company may be facing its worst moment in 50 years, and now, the market seems to lose patience with the once-dominant semiconductor giant.

Even Pat Gelsinger, who took over as CEO in 2021 with his technical expertise, has yet been able to rescue this struggling mammoth.

Over the past 50 years, Intel has witnessed eight CEOs, as each of them has left indelible marks in history. Some of their decisions have made Intel so sluggish that it is difficult to turn around.

The latest report by Technews looks back at Intel’s past and summarizes its former CEOs’ impact, examining how the tech giant’s development trajectory is closely intertwined with that of semiconductors.

What happened before Intel’s Foundation?

Let’s go back to 1956, when William Shockley, known as the ‘Father of the Transistor,’ left Bell Labs to establish the Shockley Semiconductor Laboratory.

However, Shockley’s authoritarian management style, as well as his erratic behavior, led to the dissatisfaction of employees. Eight employees, called by Shockley as the “Traitorous Eight,” resigned in 1957 to found Fairchild Semiconductor.

Fairchild, though developed rapidly, faced organizational management issues as well. In July 1968, two of its founders, Robert Noyce and Gordon Moore, resigned to found Integrated Electronics, later known as Intel, on July 18th of the same year. Andy Grove joined as the third employee afterwards.

They are regarded as Intel’s founders who formed a management triad. Noyce was in charge of research and development. Moore, on the other hand, was in charge of business execution, while Grove responsible for commercialization and management. The Big Three had led Intel through its first 30 years, establishing the glorious era from 1968 to 1998.

(Left to right:  Gordon Moore, Robert Noyce and Andy Grove)

First CEO: Robert Noyce (1968–1975)

During Noyce’s reign, Intel introduced the first microprocessor in 1971, which marked the beginning of the personal computer (PC) era and the start of Silicon Valley’s golden age. The breakthrough has earned Noyce the nickname of “Mayor of Silicon Valley” or “Father of Silicon Valley.”

It’s worth noting that Noyce and Texas Instruments engineer Jack Kilby were both pioneers of the integrated circuit (IC). Kilby developed the world’s first integrated circuit at Texas Instruments in 1958, earning him the title of “Father of the IC.” The following year, Noyce conceived the concept of the first planar IC with a metal interconnection method in his notebook, laying the foundation for all modern IC technologies.

Second CEO: Gordon Moore (1975–1987)

The famous “Moore’s Law” was proposed by Moore in 1965. However, the concept was somewhat speculative, as the development of integrated circuit was still in its early stages.

Moore’s prediction was aimed to convey the idea that electronic products would become increasingly affordable, and surprisingly, it came true. Considering the exponential growth in IC complexity, Moore revised his forecast in 1975, stating that the number of transistors on an IC would double approximately every two years. The law has established the foundation for the semiconductor industry. Even how, it is still a hot topic today among semiconductor giants such as TSMC, Intel and NVIDIA.

Third CEO: Andrew Grove (1987–1998)

To follow his superior Moore, Grove left Fairchild to become Intel’s third employee, and took up the management duties after Noyce and Moore.

In the 1970s, Intel’s main products were DRAM and SRAM. As Japanese companies began to flood the global market with DRAM, the profit of the product line quickly declined. Therefore, Grove decided to discontinue DRAM-related products and focus on integrated circuit applications instead.

The decision helped Intel to seize the vast opportunities of the PC era.

Additionally, one of the critical decisions during his tenure was to manufacture its 386 processor independently, which successfully showcased Intel’s capability to manufacture its own processors, establishing its undisputed leading position in the early 1990s.

When Intel was founded, its annual revenue was only USD 2,672. By 1997, thirty years later, its annual revenue had grown to USD 20.8 billion. Grove played a crucial role in the success and was named by Time magazine as Person of the Year in 1997. He also documented his management philosophy in his book, with the famously saying, “Only the Paranoid Survive.”

Fourth CEO: Craig Barrett (1998–2005)

Craig Barrett was an associate professor of Materials Science and Engineering at Stanford University before joining Intel. Upon taking office, his primary challenge was determining whether Intel could become a company that could handle “low margins.”

At that time, the market believed the high-profit era of the semiconductor industry was over, and that the future of PCs would be dominated by low-cost models. Therefore, he led Intel through two major transformations.

The first transformation was the segmentation of Intel’s processor products. Due to the company’s rapid transformation, the competitors are difficult to follow, making them unable to disrupt Intel’s position in the low-cost market. The second, on the other hand, was the expansion from computer/ computing into network servers.

Barrett also believed that Intel’s competitiveness lied in manufacturing and R&D, so he invested USD 28 billion in building advanced facilities and developing new technologies, which secured Intel’s leadership in manufacturing technology.

Fifth CEO: Paul Otellini (2005–2013)

Under Otellini’s leadership, Intel underwent another significant shift. As the first CEO in Intel’s history without an engineering background, Otellini only held an MBA degree.

During his tenure, Intel’s financial performance was excellent, but the company’s focus had been moved from technology to performance-oriented, which prioritized sales and marketing over technological advancements. This shift set the tone for Intel’s later decline.

In 2005, Intel secured an order from Apple, which would adopt Intel’s chips in Macs. However, when Apple inquired if Intel would supply processors for iPhones, Otellini declined the request as he believed the deal was not cost-effective. This decision caused Intel to miss out on the booming mobile device market following iPhone’s 2007 launch.

Rather than focusing selling chips individually, Otellini believed Intel’s platform had greater value, which helped Intel secure its share in the x86 market. However, the company’s technological advantage began to wane. Moreover, due to the global economic downturn, Intel closed five factories, including its last plant in Silicon Valley.

Sixth CEO: Brian Krzanich (2013–2018)

With the decline in the PC market, the new CEO Brian Krzanich, responsible for technology and administration, faced the critical task of transformation once again. In his tenure, Intel shifted its focus towards the Internet of Things (IoT) and cloud computing.

However, as Krzanich did not believe in the economic scalability of EUV, he opted to forgo ASML’s first-generation EUV equipment. As a result, Intel’s 10nm progress faced multiple delays, causing it to fall behind competitors like TSMC and Samsung in advanced nodes, and even led to a loss of market share to rival AMD.

Seventh CEO: Robert (Bob) Swan (2019–2021)

Intel was plagued with many issues, such as the problems with the 10nm process, which were difficult to overcome. During Swan’s tenure, Intel’s dominance in the market has gradually declined. In some sectors, AMD even caught up and overtook Intel’s throne.

At the same time, instead of using Intel’s chips, Apple introduced its self-designed M1 processors, which might become the final straw to Intel’s dominance.

Additionally, Intel had discussions with OpenAI about investment opportunities in 2017–2018, but Bob Swan believed that generative AI models would be challenging to commercialize in the short term and considered the deal to be unprofitable, thus giving up the opportunity to participate in the AI boom.

Eighth CEO: Pat Gelsinger (2021–)

As the three former CEOs all came from operations or finance backgrounds, Pat Gelsinger, with his technical background, was expected to bring a fresh outlook to Intel.

Given the challenge ahead, he planned to significantly expand Intel’s factories and announced the “Four Nodes in Five Years” plan, aiming to advance five nodes within four years, betting Intel’s future on the 18A process.

However, before the 18A technology was introduced, Intel has already been plagued by layoffs, suspension of dividends, and a stock price nearing tangible book value. Whether Gelsinger is the savior to lead Intel out of the woods remains to be seen. Only time will tell.

Read more

• [News] Intel Reportedly Rejected OpenAI Investment, Missing Out on AI Opportunity
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(Photo credit: Intel)

According to a report from the Financial Times, SoftBank Group has decided to move away from its plan to collaborate with Intel on producing AI chips to compete with NVIDIA and is now reportedly focusing on discussions with TSMC.

The same report, citing sources, reported that the partnership between SoftBank and Intel fell through because Intel struggled to meet SoftBank’s requirements. SoftBank reportedly attributed the collapsed talk to Intel’s inability to meet their demands for production volume and speed.

The report noted as well that this fallout occurred before Intel’s announcement of releasing its official announcement on its Q2 (April-June) earnings in early August. Notably, in response to a significant drop in its performance, Intel planned to lay off about 15,000 employees and suspend shareholder dividends.

Moreover, the report further cited rumors claiming that SoftBank has shifted its focus to discussions with TSMC; however, no agreement has been reached so far.

Reportedly, Intel, SoftBank and TSMC have all declined to comment on the situation.

Read more

• [News] Intel Has Offloaded Stake in ARM, Reportedly Raising nearly USD 150 Million
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(Photo credit: Intel)

Google has accelerate its pace on the Pixel series, as the tech giant launched Google Pixel 9 on August 13th, which is two months ahead of its schedule.

Though the Tensor G4 processor in the model is manufactured with Samsung’s 4nm, according to a report citing sources by Commercial Times, Google is said to be switching to TSMC’s 3nm process with its next-generation Tensor G5, coupling with the foundry giant’s InFO-POP packaging.

Google’s Pixel 8 is said to be the first AI-centric smartphone, featuring a range of AI functionalities. Yet, Commercial Times’ report has indicated that, after years of close collaboration, Google will part ways with Samsung and have TSMC produce the Tensor G5 chip.

The chip is also said to adopt TSMC’s advanced InFO-POP packaging. Google’s move, according to the report, demonstrates its ambition to expand its leadership in software to hardware, as it eyes for the opportunities of edge AI.

Industry sources cited by the report further point out that in the fourth quarter, both Qualcomm and MediaTek will launch flagship-level chips, while Apple’s A18 will also be produced using TSMC’s N3 process.

All these developments have hinted at tech giants’ ambition on the massive potential of the edge AI market. Now, Google would be the latest competitor to join the race.

Meanwhile, though Pixel’s market share is relatively low, the Android ecosystem, with its 70% market share in smartphones and billions of users, offers significant potential. Google is said to be following a path similar to Apple’s, achieving complete integration of hardware and software to maximize this potential.

Google’s self-developed chip extends beyond mobile devices, with its TPU (Tensor Processing Unit) now in their seventh generation. Additionally, Google’s Arm-based CPUs are being developed in partnership with TSMC.

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• [News] Breaking Apple’s Monopoly – TSMC’s InFO Packaging Reportedly Adds Google Chips
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(Photo credit: Google)

Recently, the Financial Times reported that despite over USD 400 billion in tax incentives, loans, and subsidies provided by the U.S. under the Inflation Reduction Act and the CHIPS and Science Act to boost local clean energy technology and semiconductor industries, the resurgence of U.S. manufacturing has been delayed as investors hit pause on their plans.

Reportedly, there are 114 major projects tied to these acts, totaling USD 227.9 billion in investments. However, projects with a combined investment of approximately USD 84 billion have faced delays ranging from two months to several years, with some even indefinitely postponed. These delays include several semiconductor projects.

Companies involved have cited worsening market conditions, slowing demand, and uncertainties in domestic policies as reasons for altering their investment plans.

• TSMC Delays Production at Arizona Facility

On August 13, TSMC announced several board resolutions, including the approval of a nearly USD 29,6 billion capital budget. Among these, TSMC approved up to USD 7.5 billion in funding for its wholly-owned subsidiary, TSMC Arizona.

TSMC had initially planned to build three fabs in Arizona over the next few years, with a total investment of USD 65 billion. However, per a recent New York Times report, despite four years having passed since the announcement, the Arizona plant has yet to produce a single chip.

According to a report from WeChat account DRAMeXchange, cultural differences and competition for labor resources with Intel are among the factors contributing to the challenges faced by TSMC’s Arizona facility, leading to production delays.

When TSMC announced plans to build a semiconductor fab in Arizona in May 2020, the initial plan was to start construction in 2021, with production slated to begin in 2024. The second fab was announced in December 2020, with a production target of 2026.

In May of this year, TSMC’s website indicated that the first Arizona fab’s production start has been postponed to the first half of 2025, while the second fab’s production has been delayed to 2028.

As for the third fab, TSMC has not yet disclosed the start date for construction, but the official plan is to commence production by the late 2030s.

According to TSMC’s plan, the first Arizona fab will use 4nm process technology, the second fab will employ 2nm technology, and the third fab will utilize 2nm or more advanced process technologies.

• Intel Delays Construction of Ohio Project

Intel, the U.S. semiconductor manufacturer, plans to invest USD 100 billion over the next five years in new fabs and expansions across Arizona, New Mexico, Ohio, and Oregon, creating 10,000 manufacturing jobs and 20,000 construction jobs.

Yet, according to a previous report by The Wall Street Journal in February, Intel has delayed its USD 20 billion chip project in Ohio due to market downturns and delays in U.S. subsidies.

Intel is set to build two new advanced fabs in Ohio, with an initial plan to begin chip manufacturing in 2025. Following adjustments, the completion of Intel’s Fab1 and Fab2 projects in Ohio has been postponed to 2026–2027, with operations expected to commence around 2027–2028.

As chip manufacturing processes advance to 3nm and 2nm, the investment required for fabs has surged, putting semiconductor companies under financial pressure. Against this backdrop, Intel has not only delayed the construction of its Ohio facility but has also made adjustments to its European projects.

Intel’s planned EUR 30 billion investment in two fabs, Fab 29.1 and Fab 29.2, in Magdeburg, Germany, was initially set to start in the second half of 2023.

However, due to delays in confirming EU subsidies and the need to remove topsoil at the construction site, Intel has postponed the start date to May 2025. Additionally, Intel has also paused its investment plans for facilities in France and Italy.

• Samsung Delays Taylor Fab Project

Initially, Samsung planned to build a semiconductor cluster in Taylor, Texas, including two advanced logic fabs and one advanced packaging facility, with up to USD 6.4 billion in U.S. subsidies.

The first of these fabs in Taylor began construction in 2022, initially scheduled to start production in 2024 with 4nm process capabilities. However, the plant may not begin operations until 2026, US local media MySA noted. This delay is likely due to a slowdown in the foundry market and delays in the disbursement of U.S. subsidies.

Meanwhile, according to reports from Tom’s Hardware and the Korean media outlet ETnews, with the delay in the construction of the semiconductor plant, Samsung may upgrade the facility’s advanced process technology from 4nm to 2nm.

This adjustment aims to enhance Samsung’s competitive edge in advanced process, positioning it more effectively against rivals like TSMC, Intel, and Rapidus.

Read more

• [News] Nearly 40% of Major Manufacturing Projects Reportedly Face Delays under U.S. IRA and CHIPS Act
• [News] Opening of TSMC Kumamoto Plant Nears, Yet Delay in Arizona Plant – Why is US Semiconductor Fab Construction Lagging Globally?

(Photo credit: TSMC)

In August 2022, U.S. President Joe Biden signed the “Inflation Reduction Act” and the “CHIPS and Science Act,” providing over USD 400 billion in tax incentives, loans, and grants. However, according to a report from Financial Times, about 40% of the investment projects under these acts have been delayed or put on hold.

In the first year after these laws were implemented, companies announced investment projects totaling USD 220 billion. However, among these projects, around USD 84 billion of investment has now been delayed by anywhere from two months to several years, with some even being indefinitely postponed.

Notably, TSMC has delayed the mass production schedule for its second plant in Arizona by two years. The foundry giant’s local suppliers, such as Chang Chun Group, have also postponed a USD 300 million factory investment project by two years, while KPCT Advanced Chemicals has put its USD 200 million project on hold as well.

Other major investment projects that have been put on hold include LG Energy Solution’s USD 2.3 billion battery storage facility in Arizona, Italy’s Enel’s USD 1 billion solar panel plant in Oklahoma, and Albemarle’s USD 1.3 billion lithium refining plant in South Carolina.

Industry sources cited by the report reveal that the uncertainty of policies during the election year, coupled with deteriorating market conditions and slowing demand, has led the companies to alter their plans.

Specifically, the slow approval process for CHIPS Act funding and unclear rules for the Inflation Reduction Act have also hinted at delays in some investment projects.

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(Photo credit: TSMC)