Amid threats presented by AMD and Apple Silicon, Intel advised to take action immediately and start exploring alternative business strategies.
Intel is in trouble. That is what some business analysts say amid the threats presented from various tech companies led by AMD and Apple Silicon, as well as Samsung, Microsoft, TSMC, and Amazon. The company has to take "immediate action" and start exploring alternative policies, as well as come up with new business strategies so it can efficiently handle the threats coming from other tech companies.
In recent years, the in-house manufacturing capabilities of Intel have struggled to provide the processors that clients want, with many of its models lagging behind rivals as regards speed and power consumption. According to Third Point LLC, an activist hedge fund, Intel should implement a major shakeup to deal with threats from AMD, Apple Silicon, TSMC, Microsoft, Samsung, and Amazon. Third Point LLC is asking Intel to take "immediate action," and among the changes the hedge fund advised is for the company to begin exploring alternative business strategies.
Although 2020 gave Intel a boost in the form of increasing laptop sales, the company failed to take advantage of the demand for semiconductors. It was also slammed by the departure of major clients like Apple, who started its transition from Intel chips to Apple Silicon. According to a report by Reuters, Third Point LLC sent a letter to Omar Ishrak, the Chairman of Intel, outlining the threats coming from AMD and Apple Silicon, among others. The hedge fund advised Intel to take "immediate action" and start exploring new or alternative business strategies.
ETTelecom | Hedge fund Third Point urges Intel to explore deal options #Intel #Apple #Samsung #TSMC #Devices #IntelChip #International #MaC #IntelCorporation https://t.co/Zo3vLl6Veh — ETTelecom (@ETTelecom) December 30, 2020
Third Point also asked Intel to address urgently the company's "human capital management issue." According to the hedge fund firm's letter, which Reuters saw, most of Intel's creative and skilled chip designers departed the company because they were "demoralized with the status quo," which has brought innovation to a halt. As a result, Intel now faces threats coming from more advanced chips like the Apple Silicon and those made by AMD. Because of this, the hedge fund firm advises Intel to take "immediate action" and begin exploring alternative business strategies to deal with the threats.
The letter sent by Third Point also revealed that Intel has lost its position as the leader of microprocessor manufacturing and is starting to lose its key market share in the data center and core PC markets to AMD. Industry observers note that Intel appears to be already losing to Apple Silicon. If Intel fails to take "immediate action" to address these threats and come up with alternative business strategies, then it might become the start of the end of the company. "Without immediate change at Intel, we fear that America's access to leading-edge semiconductor supply will erode," states the letter that Third Point sent to Intel.
