Activist investor Daniel Loeb wants Intel to consider a break-up of its chip manufacturing operations from its chip design and development business as the company has failed to stay at the cutting edge of manufacturing technology in recent years.
Intel also famously missed the mobile revolution, opening the door for chips based on designs from Arm Ltd to dominate the smartphone market. And now, customers such as Apple… have started designing their own chips, to be manufactured by TSMC or other foundries.
Loeb’s Third Point LLC sent a letter to Intel’s board asking it to retain an investment adviser to evaluate strategic alternatives, including whether it should remain an integrated device manufacturer.
Sources familiar with the matter told Reuters that Third Point has amassed a $1 billion stake in Intel and wants it to consider separating chip design and manufacturing. That could include a joint venture in manufacturing, according to sources.
A joint venture involving collaboration with TSMC or Samsung is likely the most viable option, said Linley Gwennap, principal analyst at The Linley Group.
MacDailyNews Take: There are precious few high-end chip fabs that would even be interested in quality state-of-the-art chip-making facilities, much less Intel’s outmoded facilities. Apple’s break-up with Intel is a glaring sign that the future for Intel isn’t promising. Missing the mobile chip revolution may have been a fatal mistake for Intel.
The price for Intel’s poisonous hubris has come due.
iPhone, killer. — MacDailyNews, March 12, 2018
[Intel’s decision to pass on Apple’s iPhone] has to be close to the top of the list of Biggest Business Mistakes in History. — MacDailyNews, May 17, 2013