Intel in Oz

A little more than a year ago I wrote Intel’s Immiseration …

I included a quote from, then Intel CEO, Pat Gelsinger:

I have no illusions that the path in front of us will be easy. You shouldn’t either. This is a tough day for all of us and there will be more tough days ahead.

While Pat was correct, the tough days for him at Intel ended with his departure on 1 Dec 2024. His replacement Lip-Bu Tan, however, has already seen plenty of such days in the few months that he’s been in charge.

That post closed with a question:

And it’s left a, still unanswered, question. Intel couldn't break into smartphone SoCs with clear process leadership and the financial strength to invest heavily. Why should it be able to break into other competitive markets today when it no longer has those advantages?

Twelve months on that remains the key question. More specifically Intel needs lots of cash (maybe up to $50 billion) and it needs customers, and at least one big one, for Intel Foundry, and it needs them soon. Where will they come from?

My first draft of this post was titled ‘Intel’s Humiliation’ (rhymes with ‘Immiseration’). The bones of the company are being picked over very publicly, including in the leading article of this week’s Economist:

The front cover of the newspaper doesn’t mention Intel but the firm is the ‘spectre at the feast’ in the cover illustration.

The article itself says, in a less than ringing endorsement of the firm:

Either way, the federal government should not throw good money after bad. Taking a stake in Intel would only complicate matters.

It was certainly personally humiliating for Lip-Bu Tan to be called on to resign by Donald Trump, and to be summoned to meet the President at short notice.

Yet, out of that humiliation came a glimmer of hope.

Lip-Bu Tan emerged from the Oval Office with his job intact and more: the Trump administration would take a 10% stake in Intel.

Yesterday, though, it became clear that ‘take’ really did mean take (as in shoplift).

The $8.9 billion isn’t new money but the conversion of previously awarded grants into equity. This must be awful for Intel shareholders? Strangely the stock rose on the news from the Oval office, even rising a