Poor Intel. It used to be the best company for the finest designers in the game of electronics. Intel was unrivalled on innovation, financial warchest and partnership capabilities. Simply, with “Intel Inside”, the world ran on Intel. I admired the company and received a job offer from it. I later decided to go with Analog Devices as they promised to put me in the Apple Product Team, creating a sensor for the iPhone.
In a “surprise move,” Intel is parting ways with its CEO Bob Swan. The tech giant announced it will be bringing back its former CTO Pat Gelsinger, who is the current chief at VMware, effective Feb. 15. The chipmaker has had a number of recent fumbles, including losing the title of America’s most valuable semiconductor company to Nvidia last year. The Wall Street Journal reports the change in leadership brings the company “closer to its engineering roots.” (source)
But that old Intel has been severely wounded. Call it a double whammy: AMD/Nvidia innovation angle on pure circuit combination on one side, TSMC on the manufacturing side. With TSMC, the castle of Intel was stolen because what made it special – the manufacturing prowess- now looks ordinary. Yes, anyone can design and send to TSMC to fabricate, Intel or no Intel, and with that, Intel’s moat was broken and many companies went into its castle. Magically, Intel has competitors from all angles and it is finding it hard to catch up. The financial advantage, over competitors, muted by an outsourced foundry in Taiwan!
Intel has been disintermediated by TSMC with its legendary manufacturing moat dismantled by the global contract chip manufacturer. The implication is that the castle which Intel has protected for decades is largely vulnerable now. Nvidia does not build big foundries but focuses on R&D designs while its manufacturing partners make the chips. It is a leader in modern chips for datacenters, gaming, AI and more. If ARM goes to Nvidia, it will pick a huge part of the mobile sector, and if that happens, Intel will bleed for years.
On the circuit side, Nvidia has created a new basis of competition on its industry-leading GPU. AMD has also resurrected and mounting real challenges in the industry. With ARM under the arm of NVIDIA, Intel is under severe frontal and flank attacks. No wonder, Intel wants to return back to what made it powerful: engineering.
So, Intel has brought its former legendary CTO as the new CEO. Bob Swan is gone and Pat Gelsinger is back from VMWare. Expect good things to happen. Intel will begin to win on engineering and that will show in the financials. That is how engineering companies win, not on shiny commercials.---