It is reported that the hedge fund Third Point LLC has sent a letter urging Intel to respond to the Apple Silicon or AMD threat and take immediate action.
Recently, Intel’s chip production capacity is struggling without meeting the level desired by clients, and in terms of product processing power and power, it is lagging behind the competition for semiconductor manufacturing such as Taiwanese TSMC and Samsung Electronics.
In 2020, there are benefits such as a surge in notebook sales due to the Corona 19 incident, but on the other hand, there was a problem that demand for semiconductors was narrowing, such as the loss of major customers such as Apple, which is switching to self-developed chips. According to reports, ThirdPoint LLC CEO Daniel Rob is calling for immediate action from Intel to raise its status as a major supplier of PC and data center processors. The first thing we are asking for is to deal with human capital management problems as soon as possible. Specifically, most of Intel’s best chip designers are dealing with leaving the company because they lose their motivation. In fact, there was a report in June that famous CPU designer Jim Keller had resigned.
The letter also points out that Intel is losing its market share to AMD in the PC and data center markets. Moreover, it has almost no presence in the AI market and criticizes that NVIDIA is dominating the market.
The second factor that ThirdPoint LLC focuses on is that Intel should consider separating the chip design and manufacturing sectors. There are also reports that this may include a joint venture option with manufacturers in the manufacturing sector. It is also urged to sell the failed agenda, such as acquiring programmable chip maker Altera for $16.7 billion in 2015.
The letter tells Intel to decide by January whether to invest more in the production capacity of the 7nm manufacturing process or entrust some of it to competitors. Thirdpoint LLC owns $1 billion worth of Intel shares. According to this report, Intel’s share price rose 6.1%.
However, the concerns of ThirdPoint LLC are not limited to one Intel company, but point to the fact that the US is making the state-of-the-art semiconductor supply depend on geopolitical unstable East Asia for everything from PCs to data centers and critical infrastructure. After Apple, companies such as Microsoft and Amazon develop their own processors, and there are reports of post-Intel, but ThirdPoint LLC said that these companies are entrusting manufacturing to East Asia and suggested that they should provide a new solution to tie these customers together. will be.
In response to this report by Intel, the company welcomes all investors’ comments on improving shareholder value, and says that the idea of ThirdPoint LLC is looking forward to the same. If Intel accepts the proposal from Thirdpoint LLC, the production partner may be a US company rather than TSMC and Samsung Electronics. However, strong competitors such as AMD, which are pointed out in the letter, are now fabless companies without their own manufacturing plants. Indeed, finding a responsible manufacturing partner in the United States will be a challenge. Related information can be found here .