Intel - the challenge of the century!

Last day or so I have been struggling to understand what happened that Intel Corporation?board decided to replace Pat Gelsinger?abruptly. I say abruptly as 2 interim CEOs were named. I feel for both David Zinsner?and Michelle Johnston Holthaus?for what they have to deal with.

And that brings me to my next question, who is there who could turn the Intel ship around. Four years ago Intel replaced Bob Swan with Pat, replacing a CEO for sins of the past made no sense to me then nor does forcing Pat abruptly into retirement makes any sense to me now. I hope there is some hidden genius like Satya Nadella somewhere inside Intel or outside (little faith in that) till a news of Intel considering Lip-Bu Tan came out, and that could be very interesting, this intrigues me the most.? I met him once through a mutual friend, deep, thoughtful and accomplished were the sentiments I walked away with.

4 years ago I made the argument that Intel should NOT be broken. But then we had a herd who always brings the “unlock value” argument. If there was a credibility score like credit score, I would dock them 100 points every time the unlock value term was used. I was hoping what I saw at Motorola (scroll a bit) was an anomaly but I guess history has a way of repeating itself?

I can’t remember if it was Jobs or Musk who said, a company start losing its edge once it stops becoming a #content company. What on earth was Intel thinking of not investing in a GPU, they kept killing themselves like many other initiatives (ARM, WiMax, 5G, etc). Even AMD acquired ATI in 2006 (#Co-pilot tells me AMD was worth 11.2B in 2006 and acquired ATI for 5.4B while Intel was worth 110B at that time). Was it arrogance or just lack of hunger for the next big thing. Even in 90’s it was clear that AI to happen will need faster processors and massively parallel processors – as the process nodes kept become smaller and smaller, it was a matter of time before we had enough speed to make AI happen. Ben Thompson of Stratechery has penned a pretty nice writeup so I wont repeat anything, but worth the read.

Everyone keeps talking about how Intel screwed up, so what can Intel do? My take?

Reinvent yourself

1. Start with rewriting your guiding principles?? Respect content – Silicon Valley and Intel was based on one principle – content (or what we may call innovation)
2. Start reding history – what did you learn from selling Xscale to Marvell (lost the mobile tsunami) or exiting WiMax
3. Cherish and nourish your versions of Jensen Huang Lisa Su?- visions trumps everything else when it comes to innovation, if you have the right team they will execute
4. Stop killing initiatives in their infancy - you don't have a good track record for that

So what’s my solve

1. Learn from others?– NVIDIA, AMD, TSMC?have surpassed you
2. Regroup
3. Accept the fact that you could make a better Arm?product 2 decades ago (I still have that device), am sure you can do it again; you may have lost mobile but IoT is still there (it will explode, if someone asks me what after AI, my answer is IoT, no IoT did not get over in 2019);
4. CPUs won’t go away?so double down on them; you have competitors so accept the fact you won’t set the market price and standards
5. Help companies make their designs better, if that is what they want and not your processor – be humble; you probably have some of the smartest designers; will keeps the lights on
6. For god sake or Americas sake or your own sake - invest in a GPU, accept you made a mistake ?
7. You are the only leading edge foundry in America - leverage it
8. Make the next big bet – like NVIDIA did or TESLA did or MICROSOFT did?

Good luck to whoever gets in the hot seat, US cannot afford for Intel to lose. It is not just about Intel, if the geopolitical challenges keep escalating which, they are – imagine a day if chips supply from Taiwan may start to face challenges – what happens to the all the trillion dollar companies?

Disclaimer: this write-up represents my personal views and doesn’t necessarily represent the views of Kearney. In fact, the strength of our partnership lies in our ability to respect one another’s opinions—and this one is solely mine.