Intel received $8.5 billion in Biden administration grants (Inflation Reduction Act) but announces massive layoffs and halts dividends due to a decline in revenue.
Actions to Accelerate our Progress
My hoot of the day is Intel CEO Pat Gelsinger’s email to employees, titled Actions to Accelerate our Progress
Team,
We have moved our All Company Meeting to today, following our earnings call, as we are announcing significant actions to reduce our costs. We plan to deliver $10 billion in cost savings in 2025, and this includes reducing our head count by roughly 15,000 roles, or 15% of our workforce. The majority of these actions will be completed by the end of this year.
This is painful news for me to share. I know it will be even more difficult for you to read. This is an incredibly hard day for Intel as we are making some of the most consequential changes in our company’s history. When we meet in a few hours, I’ll talk about why we’re doing this and what you can expect in the coming weeks. In advance of that, I wanted to preview some of what’s on my mind.
Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate. Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low. We need bolder actions to address both – particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.
These decisions have challenged me to my core, and this is the hardest thing I’ve done in my career. My pledge to you is that we will prioritize a culture of honesty, transparency and respect in the weeks and months to come. ….
Intel Suspends Dividends
Intel reported a 1% decline in revenues for the second quarter compared to the same period last year. Intel attributed the loss to gross margin headwinds related to its Artificial Intelligence (AI) efforts.
Intel is suspending dividends starting in the fourth quarter of 2024, and anticipates a “tougher than previously expected” second half.
Geisinger said that “Next week, we’ll announce a companywide enhanced retirement offering for eligible employees and broadly offer an application program for voluntary departures.”
The more “retirements” Gelsinger can get, the less unemployment will rise.
Commercial Construction Spending Is Down 9 Consecutive Months
Earlier today I noted Commercial Construction Spending Is Down 9 Consecutive Months
Every key component of construction has peaked and is rolling over except for manufacturing.
The latter is due to misguided attempts by the auto industry to roll out EVs and more importantly free money from the Biden administration for autos, chip manufacturing, solar manufacturing, etc.
Commercial Construction a Driver of Job Growth
Commercial construction is only $125.171 billion compared to $939.806 billion residential, $483,850 public, and $2.148 trillion total.
However, once houses and roads are built, there are no further directly related jobs. Once stores are built, there are many directly related jobs.
Commercial construction is a tiny component of construction spending but a mighty contributor to future jobs once completed.
Small Business Employment Growth Is Now Negative
Yesterday, I commented Small Business Employment Growth Is Now Negative (and What It Means)
ADP data shows year-over-year payroll growth is negative 88,000 for small corporations sized 20-49. Trends are negative in all but very large corporations.
Actions by Intel are going put a big question mark on hiring by large corporations.
Looking Ahead
If businesses are not expanding stores and restaurants, then they won’t be hiring to staff those stores and restaurants either.
“All Hell Breaks Loose” In the Next Few Months as Recession Bites
On July 25, I commented “All Hell Breaks Loose” In the Next Few Months as Recession Bites
Two of us are still adamant that a recession has started. The other is Danielle DiMartino Booth, in her best video yet.
Please take a look.
my last 2 computers work fine
how’s engineering going v. TSMC – behind by few years
Working for corporate America has got to suck. Unless you’re the CEO.
I believe Andy Grove would have used actual technical language to describe why he was trimming workforce, not this un-actionable abstractness:
“ Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate.”
None of the rest of the message explained any of “ cost structure”, “operating model” or “fundamental change”.
Maybe, just maybe, They simply “Do Not” know WTF to do…
The American Economy has been turned upside down and sideways by this current Administration. I don’t think they (could) have a true economist amongst them!
They have literally stolen Billions of our current AND future Citizens Taxpayers $$$ away, and for what? To hide underhanded clandestine operations? For giveaways of our hard earned Citizens $$$ for food, energy, and healthcare, to other Countries? You know, like the things Americans Families could desperately use and need right now.
So they basically stole our $ and just handed it over to other Countries for absolutely nothing. No Peace, No Promises, No Terms for Payback, Nothing!!!
Seriously, can anybody explain Why? Can anybody actually sit with a straight face, and fingers not crossed, and state: “We don’t need a clean sweep, massive overhaul, and completely new approach to Governance”
If you can, then your head is immersed in utter BS, and you may need to clean/clear it out, so you can comprehend what’s going on around you, IMO…
Intel’s latest chips are having problems and that is what is reflected in their earnings. This is a company that has lost its way.
I must Fix the following paragraph, so to accurately explain what occurred. As a result of this “Mandated Expense” thrust upon the Taxpayers, is why we are where we are at now.
It also helped, as I have been saying now for many Months, hide the recession, and therefore the numbers stayed skewed to the positive. A planned event, and nothing unfortunate about it, other than the fact that the Citizens get screwed by their Government once again, and now will pay to clean it up ( by orders of said Government and All the workers that will always be employed with Your$, but I digress…
Fixed:
Intel received $8.5 billion in (Biden administration) “Taxpayer’s Forced Agreement” Via. “Taxation Without Representation”, grants (Inflation Reduction Act) but announces massive layoffs and halts dividends due to a decline in revenue.
Don’t forget the misguided attempts by the auto industry (Via Government Interference) to roll out EVs and more importantly free money from the Biden administration for autos, chip manufacturing, solar manufacturing, etc. *Same Deal As Above!
if it weren’t for government handouts Tesla would of gone out of business long ago. I too pray for a world where a creepy guy like musk was banned into obscurity long ago.
Looks like a couple of potential customers for “Intel Inside” chips –
1:09:00 to 1:14:00
Biden, Harris greet freed prisoners at Joint Andrews Base | USA TODAY (youtube.com)
Looks like the media clipped out the part with Biden wandering up the stairs of the plane not knowing where he is or whats going on. Completely staged event who knows how much cash was sent for this?
Market tops always happen on Good News.
It’s hard to believe that Intel has 1/25 the market cap as Nvidia. I guess graphics chip makers have come a long way. Back in the 1980s-1990s neural nets had a flowering. This was really their second flowering, the first being in the 1960s. But they were over trained and had poor generalization and typically failed when tested in a realistic settings. This 3rd flowering has resolved many issues with deep learning and recursive archectures and training on extremely large data sets. This really has become big science where a team is required. Nvidia was wise to develop the software tools to enable the implementation of these deep learning networks on their graphics processors. I suspect Intel and other chip makers will catch up but right now the hysteria around “AI” and the willingness of the market to throw goobs of money at it, has given Nvidia an artificial boost that will certainly lead to a catastrophic bust in the no too distant future. Nvidia is the new Cisco.
mish you’ve been calling a recession for years now. how is there a recession with 4% unemployment? All your numbers, inverted curve ect cannot dispute this reality. 15K tech jobs is not even a blip. and i agree chips act as give away to big corps like intel, but one of the main assertions of that bill is that chip mfg. is a national defense priority. not a jobs program.
1/5 of LA county lives at or below the poverty line. There are about 9.6 million people in LA county. This math is repeated in most large cities.
No politician wants to use the R word. Media won’t use it unless Trump is elected and then it will all be his fault.
You have to do better than this argument. You just have to.
there are jobs. if you are arguing that we are having a tough recession with jobs everywhere we need to see some logic behind it.
You are referring to job postings if I understand correctly. That’s not the same as jobs. In the same way that having health insurance isn’t the same as access to healthcare services. The posting game has been a thing for a long time.
They will use the recession word when we are in a recession because it is the best way to claim problems as not their fault but first you actually need a recession but we are not there yet.
thats all i am saying doug… all recessions are preambled by job losses. not 15k at intel but real losses. Like millions like we had in 2008-2009. that’s a real recession
If you study the history of actual recessions you will see that total employment plateaus and gently falls in the early stages.
Job quality deteriorates before actual job losses. More people are stuck in part-time jobs or otherwise working for less than they could.
Job losses and unemployment claims are a lagging indicator. Those data – especially the Establishment birth-death model imputed data – are heavily revised so the realtime values are not useful.
If the economy is not already in recession it is damn close and it will take a miracle to pull the nose back up.
Total employment is down year over year. The peak was 9 months ago. How can you NOT say that’s a recession?
And another one (CA headquarters) gone. Chevron is moving it’s headquarters from CA to Texas. It gives new meaning to the term Chevron deference. 2,000 Chevron California jobs are affected, with a transition planned over the next 5 years.
2000 jobs is a rounding error for an economy the size of CA
Howard, your excuses and deflections only work if there wasn’t a congo line of companies that have either left CA or expand elsewhere. Which is what has been occurring for years. It’s why CA lost a Congressional seat a few years ago. People are leaving and they’re not coming back.
Wake up.
im not here to defend california or their policies… but with this mass exodus you are suggesting that CA is a sick man, but there’s just no evidence. They continue to dominate with their economy and people are still willing to pay $4000/mo for a studio apartment just to live in CA. Why would anyone do that? it’s because it is desirable to live in either for lifestyle or jobs…. compare to rustbest, where i am from, where there really was a mass exodus, rents and cost of living plummeted and continue to stay low.
Cat ladies and cat men would pay that money to live in wonderful California because anyone with a family cannot.
I feel like you have this image of CA that has built up in your mind and that it really pisses you off, but California has as many families with kids as any other state.
More, if we’re being honest. But CA’s public school system is a failure. According to the state’s own testing, 47% of the students can perform English at or above grade level and only 35% of the students can perform math at or above grade level.
https://caaspp-elpac.ets.org/caaspp/DashViewReportSB?ps=true&lstTestYear=2023&lstTestType=B&lstGroup=1&lstSubGroup=1&lstSchoolType=A&lstGrade=13&lstCounty=00&lstDistrict=00000&lstSchool=0000000
It’s an epic failure. But shhhhh, Gavin’s next up for the Democratic party lottery!
If CA is doing so well, why are their schools failing at teaching kids English and math?
https://caaspp-elpac.ets.org/caaspp/DashViewReportSB?ps=true&lstTestYear=2023&lstTestType=B&lstGroup=1&lstSubGroup=1&lstSchoolType=A&lstGrade=13&lstCounty=00&lstDistrict=00000&lstSchool=0000000
lets be honest czech and speak plainly. you have no fucks to give for calafornia kids in their school system. you care about making a point about how california is evil you hate it for reasons i can only guess at
Tip of the iceberg. Look at what happened to the rust belt. It started slowly then all of a sudden.
sure, but you just speculating based on your gut vibes. lets see evidence
It is a fundamentally different dynamic. Then rust belt became uncompetitive and impoverished specifically _because_ their output was stolen by debasement and handed out to Californians, New Yorkers and a few others. Without those transfers, neither California nor New York would be the bastions of theft-funded ‘let them eat cake’-nontellects that they are today.
It does appear that at least some are now betting a Trump/Vance victory will shift the wealth transfer machinery towards Texas. But even if so; it will only be at the very far corners: Almost every reliably imbecile with any stake in the theft-racket branded the “syyyystem”, has too much of his loot tied up in various CA and NY rackets. The chances of the transfer pump ever actually reversing to any meaningful degree, is near zero.
Sure: At some point, the whole shell will collapse. “Making money from my home and my random number picking zkilllzzz” won’t ever actually become a real, self funding industry; no matter how hard The Fed works at enriching only those dumb enough to fall for just that. The Chinese; as well as others; will produce better chips than Intel for half the cost. In not long at all. Then at 1/4the cost. And so on….
But internally in the US: By the time The Fed can no longer shield its illiterate Californian and New York groupies from trivial reality; they will have long since been parting out and selling Kentucky newborns to Epstein and the like, in order to keep the coastals comfortably deluded. As long as all wealth, hence power and influence, is distributed arbitrarily by a Fed, the states with the populations most dependent on; hence beholden to; The Fed’s wealth transfers for all they own, WILL be set up to outperform the rest, relatively speaking. It’s only in absolute, international, terms; In comparison with freer and more enlightened countries like China; that CA and NY will fade. Compared to the rest of America, they’ll still be propped up, until the very bitter end.
No! This is equivalent to a multibillion dollar disaster … except that it’s an ongoing revenue hole, not a one-off expense. You have to look for that which is unseen, not just the headline number.
2000 high paying corporate HQ jobs drive many times their weight in total regional employment. Every one of those HQ people shopped and paid 10-15% in state & property taxes, and funded their favorite activities… and all that local revenue is no longer available to pay retail workers & waitresses, grocery stores, schools and city workers etc. All of those people facing lower incomes will have to cut back themselves. The state and local governments, facing lower tax revenues, will also be cutting back. So a LOT of other jobs will be in jeopardy, not just the HQ jobs.
And then there’s the next circle of hell: after the waitresses and grocery stores and local governments cut back in response, all the people that THEY were paying will also have to cut back. It ripples out from there.
And it’s not just Chevron, California has been driving away a lot of other business too.
I suppose realtors and divorce lawyers might see an uptick?
You’re missing the big picture Howard. The overarching theme is that jobs, corporations, and families are fleeing California like a fugitive. The most beautiful and wealthiest state is in FULL collapse. Newsome turned California into a dump and now that state is not much different than Mississippi or New Mexico.
read between lines
I need bigger bonus and more shares
The Chips Act gave money to several companies to build foundries in the US. It was a national security decision and not a business one. NVIDIA does not make its own chips but outsources their fabrication to mainly Taiwan for example and NVIDIA was not included in the Chips Act. Building foundries are very capital-intensive and low margin so it made sense to close your own foundries, concentrate on design and farm out the actual fabrication to someone else far away. In a perfect peaceful world that makes sense. In the real world that is a recipe for disaster.
Intel is trying to move towards the foundry business and the Chip Act money is going to building them. Now we an interesting thing about the money. Many have said that the companies will spend the money not on building foundries but on stock buybacks and dividends. Intel by suspending its dividend won’t be accused of that and I doubt they will be using their $20 billion in cash to buy back stock either. Nevertheless Intel has a hard climb ahead of them.
About half the money of the Chips Act has been disbursed, most of it to seven companies, and it has gone into building factories. When you send your factories overseas and then have to rebuild what you gave away you have to pay a lot more than what you had saved by sending them overseas in the first place.
“When you send your factories overseas and then have to rebuild what you gave away you have to pay a lot more than what you had saved by sending them overseas in the first place.”
And when comprehending that there is a reason the factories left for greener pastures in the first place flies well above your rather limited head….?
Eh; Then you just rob some third party tax payers. So you can hand billions to your donors. So that they can build chip factories in Congo. After all: The only reason The Congo is not a world leader in chip manufacturing is, like, that no five year planner has handed his donors billions to build a chip factory there and, like, stuff….
“You’re gonna need a bigger CHIPS Act.”
Won’t the CHIPS Act create jobs for these laid off workers? /sarc
well actually most workers at intel are skilled engineers with a good resume. I promise you they will get rehired, possibly with higher salaries, at other companies within a week
That’s a lot of guessing and speculation. Stick to facts.
Nope
Or maybe its all the DEI employees they had to hire as a condition of the Fed handout???
“…this includes reducing our head count by roughly 15,000 roles, or 15% of our workforce.”
I was just reading that government hiring was up, in the most recent report.
After Disneyland workers voted to authorize a strike, Disney struck a deal with the unions. Yesterday, video game workers were picketing Warner Bros. studios over issues on use of AI in producing product.
and your point being????????????
CNN can do the talking but the mag7 plunge and the higher unemployment rate
will do the walking.
To me, the last part: “My pledge to you is that we will prioritize a culture of honesty, transparency and respect in the weeks and months to come. ….”
What this says is that Intel was DISHONEST, NOT TRANSPARENT and DISRESPECTFUL to employees. I will share a short story about why I do not believe ANYTHING that Intel says to ANYONE!
I owned a Company that bought Intel CPU’s as a critical Component in every one of our finished products. Intel CPU’s were being “TRADED” like Commodities back then. I kept pushing my partners and finally INTEL GRANTED US a hearing. A MEETING, in my Boardroom.
They showed up, full of arrogance (we grew to be a huge buyer later) and I could FEEL the superiority. Their Top Procurement/Supply man said: “There is NO WAY that Intel allows our chips to be ‘GRAY MARKETED.’
I then picked up the Boardroom phone and said, “Harry, bring them in!”
We plopped down ten boxes of A MAJOR PC MANUFACTURER’S shipping cartons, supplied to us at a 50% HIGHER COST to my company.
They nearly SHAT their pants. I essentially called them liars to their faces. A week later, we secured a Direct Intel Contract, lowering our costs by 35% and five years later, I retired from that SCUMBAG LITTERED PLACE called the SILICON VALLEY.
I moved on, but the lies persisted until I got out. INTEL ARE SCUM!
When a company has an effective monopoly, as Intel and Microsoft did… Biden simply mandated that people consume the product, when marketing produced insufficient sales.
intel is not even close to a monopoly with less than 10% semi conductor market share globally
Not now, but the 1990-2000s were very different. Even Apple had to use intel chips in the 2000s.
This may be black Friday after what happened in Japan. There is no point in Yellen at Powell.
Amazon plunged under its 2021 high, under the cloud, testing Apr 25 low.
Intel may be looking at a huge recall or a lawsuit with thier 13th and 14th generation processors. They are crashing constantly.
My 13th gen i7 has been flawless for the 1.5yrs owned in an MSI tower.
Well you are a lucky one then. Intel just released that they are extending the warranty by 2 years.
https://www.tomshardware.com/pc-components/cpus/intel-announces-an-extra-two-years-of-warranty-for-its-chips-amid-crashing-and-instability-issues-longer-warranty-applies-to-13th-and-14th-gen-core-processors
Thanks for the link. Hopefully won’t need it. I have been buying a PC every 10 years and would expect another 8.5 on this one.
intel is the classic tale of industry leader that gets complacent and flails despite all of their advantages. they might of turned it around, like Microsoft, but they are sinking too fast. The idea behind CHIPS, which i don’t agree with, is that domestic chip mfg. is too important to let fail. If you want to criticize the bill you should at least mention the arguments for why it was put forward in the first place. Do you consider a majority of our chip fabs being located in Taiwan next to china to be a strategic vulnerability for the USA?
What are you talking about? No where in my comment did I mention anything about CHIPS.
I was merely pointing out that Intel is have lots of problems with thier 13th and 14th generation chips.
sorry Woodsie, i got your comment mixed up in my head with all the other stuff going on in this thread
No problem
Trump would be bitching loudly at Intel for taking 8.5B and then firing 15,000.
Meanwhile Kamala is excited to see the welfare state get even bigger.
how is this story connected to “the welfare state” in any way whatsoever?
Unfortunately, there is no untying corporate welfare, government sugar and politics. Sad, but true.
i agree czech but the OP was clearly implying that Kamala was for the welfare state, which as we all know means black folk collecting paychecks. Why not just say it?
The welfare state is for the wealthy, corporations, political donors and the poor. Everybody knows the rules.
Welfare = government picking up the slack when employers lay off employees.
The top bell is ringing even louder. Can Wall Street hear it yet?
Say it ain’t so.
There must be some mistake.
It just can’t be true.
Lack of substance has consequences.
Impossible
But…….we are taught that DEI is most important. It is the thought that counts above all else.
Although highly improbable, Is it possible?
Could we being Lied to?
I am truly staggered, must be a conspiracy theory!
DEI is such a stupid snarl word. it implies that anyone of color could of only possibly of got there due to the huge advantages that poc get. poc don’t get the advantages that you think they do friend.
DEI is based on the beliefs of CRT, meaning all white people are racist. Don’t confuse what these words mean or where they originated.
i am not an expert but i don’t think those terms mean those things.
DEI is the result of CRT. They’re not the same thing. One spawned the other.
Sign on the front door of Intel office space :
“No Intel Inside.”
“When the chips are down – don’t come around”
Read and weep! https://www.reddit.com/r/wallstreetbets/comments/1ehjuzj/i_bought_700k_worth_of_intel_stock_today/ someone just invested their $700k inheritance
Probably somebody trolling. Any industry Obama and Biden tried to prop up collapsed.
I saw that last night when I was perusing reddit. Assuming it’s true (I’m certainly skeptical), that person is a grade A moron.
To reduce risk and increase free cash flow Pat Geisinger might carve Haifa, near Lebanon, and Kityat-Gat near Jasa. The US is hooked on Israel’s and Taiwan’s semiconductors. Xi and the Ayatollah love it. The policy of building modern foundries and pharma in the US is correct, but it takes time. During that interval Intel can die.
AAPL or NVDA might absorb INTC, becoming vertical, instead of using contractors.
Not likely. Intel’s root problem is that they let their process technology fall behind because R&D costs money that could go C-suite bonuses.
Did their CEO take a 50% pay cut to further fund Intel’s catch up efforts? I thought not.
For the good of the world, I hope both Intel and Boeing recover.
They both got infected with the Woke virus good and hard and are now reaping the consequences. For high-end engineering you don’t want to recruit below a certain baseline of smarts and work ethic.
Exactly why did the government give Intel $8 billion dollars of tax payer money …. If they were going to fire 15,000 people … something doesn’t add up … God we are really stupid …
So they could do more share buybacks – at a price 50% higher than now.
The sky is falling. The sky is falling.
No, the sky is NOT falling. It may be an economic earthquake though. It started in Japan.
Many years ago in my industry (semiconductors), Intel use to make fun of everyone including upstarts like Nvidia, Broadcom, Qualcomm, Texas Instruments and Arm. Intel had so many competitive advantages and has blown literally everyone of them while their counterpart in software, Microsoft, leveraged their competitive advantage into a whole bunch of new areas to not only survive but thrive. Intel is now the 11th most valued semiconductor company looking up at many companies employees and industry analysts once laughed at the in the 1990s. Some here will try to play it off like Intel is some hall mark of a major recession indicator but they aren’t. This is just a company at the beginning of a long and painful journey that will result in them being acquired by another declining semiconductor company in order to make a comeback. It also would not surprise me if Intel one day had to go into bankruptcy. It is such a sorry state of affairs at Intel. This feels like the start of multiple 5 digit number layoff cycles before they are taken private, merged or acquired.
Agree with your assessment. Thier shitty 13th and 14th generation processor are having all sorts of problems.
Don’t forget the billions wasted on stock buybacks. That money should have been invested in plants that could have competed in the Phone market.
Now they need a handout. Instead they should get nothing and be forced to raise capital the old fashioned way by selling new stock.
Intel stock price is at the November 1998 level. That’s +25 years lost years, along with lackluster dividend.
They destroyed what Andy Grove created, Mister Mish.
https://en.wikipedia.org/wiki/Andrew_Grove#Competitive_mindset
Another 1990’s great (General Electric) is at its 1999 stock price level.
Just to show you how great stocks can eventually suffer due to gross mismanagement.
they innovated their way into this mess because some b-school people thought they weren’t growing fast enough when they had a monopoly on the pc and server markets. b-schools have ruined the world.
when your a business major, the whole world looks like a business.
good for business, bad for the world.
Surprise, Surprise, Surpise (Gomer Pyle voice)
This time unlike the Establishment causing an economic meltdown right before the 2008 election (and remembering Chuck Schumer smirking on TV almost everyday then), they will hold this off until after the election so that the economy is not on the agenda, and only abortion and “Woke tolerance” is.
Intel acquires companies to destroy them, sometimes purposefully, sometimes not. I’ve lived first hand through the former – Intel acquired our group because we had a chip design that Intel did not want competitors to have. I spent over a year at Intel doing next to nothing, looking through software and getting rebuffed (literally, “mind your own business”) when offering to try to fix bugs. Finally I grabbed one of Intel’s “here’s a year’s pay to go away” severance packages and never looked back.
I’ve had similar feedback from others who have experienced the latter, specifically Alterra, which appears to be suffering a slow death inside of Intel. Through Intel’s infighting and putting everyone in a silo, they drove out most of the good Alterra engineers.
And isn’t it nice how I have to pay Intel even more via my taxes, even though Intel was a competitor at my previous company. It’d been nice to have some of that free money love, but unfortunately they ran out of the non-free money and had to shut their doors. But hey, at least Intel got $18 billion.
All I can say is 10% is a good start.
They have literally blown every acquisition they ever made since the 1990s. 10% is just the top of the melting iceberg.
Defective $500 Intel chips burned out and must be replaced. Intel has no suitable replacement. Liability at server farms is high. Litigation is likely. For a long time Intel has been all marketing sizzle and no steak. The sizzle is gone. Sales follow. There comes a time to haul down the rainbow flag and hire on merit. 15% layoffs cannot fix intel’s culture problem. The ultimate cure is part intel out and sell the parts at auction.
So will the 15,000 layoffs be the useless diversity hires or will it be white males first?
Too many companies hire and keep diversities based on quotas and not on diversities with competence.
Is this American legacy company going the same way as American Big Auto?
No. If you dont pivot at the right time in semiductors, you can easily go bankrupt. Many years from now we may be talking about Nvidia in the same light. New companies and new innovations that don’t get acquired always rise up in semiconductors. Nvidia was the laughing stock of many large semiconductor companies in the 1990s because they had some harebrained idea to make a GPU better than a CPU. No one is laughing anymore.
I’ve been a PC gamer for 30+ years. Had a 3dfx Voodoo 2 GPU on my 1st build. Then Nvidia game along, and wow did they deliver. 3Dfx no longer exists. The rest, as they say, is history.
I remember those cards too. ATI was the other big graphics manufacturer at that time and they and NVidia had a long rivalry.
AMD purchased ATI a while back.
I worked at Intel for many years in the organization he headed at the time. My cube was literally a light stone’s throw from his.
All I can say is this couldn’t have happened to a nicer guy. =%^(
I’d love to know what the emoticon means and if this is sarcasm. But either way, I’m sure the CEO will do fine (with a golden parachute and a cushy landing spot).
It’s hard to believe that Intel has run itself into the ground, but it’s been a long time coming. It’s a result of worshipping at the altar of share buybacks. Buybanks reward executives with high share prices and automatic bonuses, but they destroy the guts of the company. What a shame.
Even a whopping 8.5B in free socialist gov largess can’t turn around a company that has lost it’s way.
Intel had enjoyed a near monopoly for a good while engineering and producing an efficient and versatile product into a huge demand.
However, they faltered in the highly competitive field of subminiature and reprogramable devices.
Trying to play catch up, they floundered even more as the visionless bean counters took over.
They wheeled and dealed for a surprisingly long time with their huge fortune, but lost their productive edge.
It is not surprising that they must jettison a lot of their mess now.
The current direction into AI, cloud servers, and such, I believe is ill fated as well.
Intel, or somebody, should be looking into producing hardened, reliable, simplified, efficient devices that will better suit future needs.
Most bean counters will not comprehend this value.
Their 13th and 14th generation top of the line chips are burning themselves up.
https://www.techradar.com/computing/cpu/is-your-intel-core-i9-cpu-crashing-when-playing-games-youre-not-alone-and-intels-investigating-worrying-reports-of-instability
They’ve also lost the mobile market. There is no profit left in the low end desktop market.
The Inflation Reduction Act is working so well it’s causing Deflation!
This is the strongest indicator a recession has started.
It’s the Strongest Indicator that Intel has been poorly run for a while. Nvidia has cleaned its clock.
Nvidia and AMD and Apple. Oh, Qualcomm just shipped a new CPU too.
Here is a list of values of semis by market cap. Intel is 11th.
https://companiesmarketcap.com/semiconductors/largest-semiconductor-companies-by-market-cap/
Yeah Intels market is basically just desktop PCs and increasingly those don’t matter in a world of Phones / Tablets and NVidias graphics cards.
I wonder if anyone has pointed out to Gelsinger that the shortcomings he cites should be justification for C-suite folks (including himself) losing their positions.
Then again, compensating them would likely prove too costly and 20% would have to be axed.
He and the Corporate Management should take Pay Cuts and give back their Golden Parachutes for a Job Poorly Done.
Best economy and jobs situation ever mofos!
I guess those Chip Act subsidies for Intel haven’t kicked in yet…? And what about the subsidies for TSMC? Maybe Intel is having second thoughts about trying to compete with TSMC in advanced 3-5nm chips?
Intel has been getting smashed for a while. Nvidia and TSMC have been kicking their butts.
They got what they deserved. They wanted to be another GE, making money by pretending to be a bank. The rest of the world needed real chips, and Intel just sat on their MBA hands and skimmed. Perfect example of why we should allow capitalism to do the hard work of cutting off the heads of the unworthy.
Yep.
Even worse, they are one of the worst offenders in stock buybacks. They spent billions on that instead of building new plants to make the most cutting edge chips that ceded the market to NVida and the Phone chip manufacturers (Apple/Qualcomm etc).
They should never have gotten the 8 billion in welfare from Biden. Instead they should have had to sell stock to raise capital.
“Should retail investors be purchasing stock in Intel right now….or a lot of stock in Intel?” -CNBC cheerleaders, probably