Three years into Pat Gelsinger’s tenure as CEO of Intel, the American chip giant is grappling with significant challenges, including falling revenue and an uncertain future. Gelsinger's comments regarding Taiwan have strained relations with key partner TSMC, while delays and technical issues have hindered Intel’s 18A chip technology from effectively competing with TSMC’s lead. Despite efforts to secure AI-related contracts with major players like Waymo, Amazon, and Microsoft, Intel has faced setbacks, with the 18A fabrication process yielding mixed early results. Since Gelsinger took charge, Intel's revenue has plummeted by a third, and its stock has decreased by 66%.
In response to these challenges, Intel plans to restructure, which includes reducing its workforce by over 15,000 employees. This move is part of a broader strategy to reclaim its market position under the U.S.-backed CHIPS Act, which aims to bolster domestic semiconductor manufacturing. Gelsinger remains optimistic about the company's future, yet the path to reviving Intel's manufacturing capabilities and competitiveness in the AI sector is fraught with mounting challenges and delays.
Amid these internal struggles, Qualcomm has expressed interest in acquiring Intel, as reported by The Wall Street Journal on September 20, 2024. This potential takeover comes at a time when Intel is facing a projected net loss exceeding $1 billion for Q3 2024. Qualcomm's preliminary approach to Intel reflects a strategic move to bolster its capabilities in the rapidly growing AI sector, where both companies are under pressure from competitors like Nvidia.
Intel's central role in the U.S. government's chip-making strategy, supported by significant funding from the 2022 Chips and Science Act, complicates any potential acquisition discussions. Qualcomm is likely to wait until after the U.S. presidential election in November 2024 to make a formal bid, as regulatory scrutiny, particularly from Chinese regulators, looms over the deal. The ongoing developments in both companies highlight the evolving landscape of the semiconductor industry and the challenges that lie ahead for Intel under Gelsinger's leadership. [c167a6d4][ec4f54b9][17275b28]