Intel Urged to Take 'Immediate Action' Amid Threats From Apple Silicon and AMD

Activist hedge fund Third Point LLC is pushing for a major shakeup at Intel in response to threats from Apple, Microsoft, Amazon, AMD, TSMC, and Samsung (via Reuters).

intel logo

Intel's in-house manufacturing capabilities have struggled to provide the chips its clients want in recent years, with many of its offerings lagging behind its rivals in terms of speed and power consumption. While 2020 has afforded Intel a boost in the form of surging laptop sales, the company has failed to capitalize on demand more broadly for semiconductors and is facing the loss of major clients such as Apple, who have begun to transition from Intel chips to custom silicon.

In a letter to Intel's chairman, Omar Ishrak, seen by Reuters, Third Point calls for "immediate action" to restructure and explore alternative business strategies. Firstly, Third Point requests that Intel urgently addresses its "human capital management issue." Many of Intel's talented chip designers have reportedly fled the company due to being "demoralized with the status quo," which has stifled innovation.

The letter explicitly highlighted that Intel has lost its prime position in microprocessor manufacturing to TSMC and Samsung Electronics, and is losing key market share in its core PC and data center markets to AMD. The company is also accused of being largely absent in the emerging market of artificial intelligence. "Without immediate change at Intel," the letter cautioned, "we fear that America's access to leading-edge semiconductor supply will erode."

Third Point encouraged Intel to consider separating its chip design and manufacturing divisions, and instead seek a joint venture in manufacturing. It was also urged to divest its failed acquisitions, such as the $16.7 billion purchase of programmable chip maker Altera in 2015.

Following Apple, Intel customers Microsoft and Amazon are expected to cease using its chips, resorting to their own custom silicon instead. Third Point expressed concern that the custom silicon designed by these companies is sent to be manufactured by companies in East Asia. As such, it suggests that Intel must offer new solutions to retain its major clients as customers rather than have them send their manufacturing away.

Splitting up design and manufacturing operations could help Intel address some of the threats it is facing. Tapping external vendors to manufacture its most advanced processors, a step Intel executives are said to be extremely resistant toward, could help to lower costs. Furthermore, opening up Intel's own manufacturing capability to make non-Intel processors could allow it to produce the custom silicon chips increasingly wanted by its major clients.

Intel has reportedly been slow to respond to investors' concerns. The letter threatened that if Third Point senses "a reluctance to work together to address the concerns," it will submit nominees for election to Intel's board at its next annual meeting. Third Point is said to hold a $1 billion stake in Intel, affording it a position where it can push for change at the company.

A statement from Intel responded to the intervention, saying "Intel welcomes input from all investors regarding enhanced shareholder value. In that spirit, we look forward to engaging with Third Point LLC on their ideas towards that goal."

Tag: Intel

Top Rated Comments

VermontsFinest Avatar
18 months ago
I'm pesonally just happy my Mac doesn't run as hot as a BBQ anymore.



Edit: The gracious @Freeangel1 ('https://forums.macrumors.com/goto/post?id=29451024') pointed out I made a spelling mistake... I shall leave it as-is in honor of you ;)
Score: 68 Votes (Like | Disagree)
thadoggfather Avatar
18 months ago
How the mighty have fallen
Score: 58 Votes (Like | Disagree)
Baymowe335 Avatar
18 months ago
Intel is already screwed.

Shows you what bad management will do and how valuable good management is in business.

Apple has FANTASTIC management.
Score: 58 Votes (Like | Disagree)
CWallace Avatar
18 months ago

Apple should go ahead and buy off Intel's foundry, like they bought off their 5G division.

Apple could use the manufacturing capacity without being overly reliant on TSMC.
The problem is Intel's foundries are barely at 10nm. Apple would need to invest billions, if not tens of billions, to get them to sub-10nm and Apple would be dependent on hoping Intel's fab engineers could do it.

Much better to spend a few scores of millions to help TSMC get their new processes into production by agreeing to be "first mover" and buying chips while TSMC are ramping up production and yields are low and then getting exclusive access to that process for a time.
Score: 35 Votes (Like | Disagree)
DJC631 Avatar
18 months ago
The writing is on the wall, Intel.
Score: 32 Votes (Like | Disagree)
MrTemple Avatar
18 months ago

Intel isn’t going anywhere as long as windows machines keep using it.
Corollary: When Microsoft releases Windows ARM, Intel is toast.
Score: 31 Votes (Like | Disagree)

Related Stories

apple silicon discord

Discord With Native Apple Silicon Support Now Rolling Out

Tuesday March 22, 2022 4:28 am PDT by
A version of Discord with native support for Apple silicon Macs is now rolling out to users, almost a year and a half after the first Macs with Apple silicon chips were shipped to customers. Until now, Discord users have had to rely on Rosetta 2 technology to use Discord on Apple's latest Macs. While usable, Discord on Rosetta 2, which translates apps made for Intel-based Macs to run on...
ternus m1 chip

Today Marks the One Year Anniversary of the First Apple Silicon Macs

Wednesday November 10, 2021 6:25 am PST by
While it may feel rather hard to believe, today marks one year since the first Macs with Apple silicon were unveiled to the world. At a virtual event on November 10, 2020, Apple introduced its custom-designed M1 chip, followed by three new Macs powered by the chip, including the MacBook Air, the lower-end 13-inch MacBook Pro, and the lower-end Mac mini. With the M1 chip, Apple delivered...
mac pro mini feature

2022 Mac Pro Rumored to Use Intel's Ice Lake Xeon W-3300 Chips

Monday July 26, 2021 9:27 am PDT by
A new Mac Pro that's coming in 2022 is set to use Intel's Ice Lake Xeon W-3300 workstation chips, according to an Intel leaker that WCCFtech says has offered reliable information on Intel Xeon chips in the past. Intel's W-3300 Ice Lake CPUs are set to launch in the near future, and there have already been signs of new Ice Lake SP processors in the Xcode 13 beta. Intel has said that these...
new m1 chip

Key M1 Mac Engineer Departs Apple for Intel

Thursday January 6, 2022 2:31 pm PST by
Apple's former Director of Mac System Architecture Jeff Wilcox this week announced that he has left Apple to take on a new role at Intel. As noted on LinkedIn (via Tom's Hardware), Wilcox was part of Apple's M1 team and he had a key role in the transition from Intel chips to Apple silicon. Wilcox's profile says that he "led the transition" for all Macs to Apple silicon, and prior to that, he ...
mac mini intel gray

Mac Mini and Mac Pro are Apple's Last Two Remaining Intel Macs With Launch of Mac Studio

Tuesday March 8, 2022 11:31 am PST by
With the launch of the new Mac Studio that replaces the higher-end 27-inch Intel iMac, Apple has just two Intel Macs left in its lineup - the Mac Pro and the Mac mini. Though the Mac Studio appears to be something of a Mac mini and Mac Pro hybrid, Apple has not discontinued the high-end Intel Mac mini and it remains in the lineup. This suggests a new version of the high-end Mac mini is...
Intel Not Mac Pro Feature

Macs With Intel Processors Still Coming Amid Transition to Apple Silicon

Tuesday December 21, 2021 10:55 am PST by
While Apple is rapidly transitioning its Mac lineup from Intel processors to its own Apple silicon, it's worth highlighting as 2021 wraps up that the relationship between Apple and Intel hasn't been entirely severed as reports indicate Apple still has one more Intel-based Mac in its pipeline that's yet to be released. With the Mac Pro, Apple is not expected to entirely transition its most...
14 vs 16 inch mbp feature

Despite M1 Pro and M1 Max Performance and Efficiency Gains, Intel Still Hopes Apple Will Do Business With It

Wednesday October 20, 2021 2:26 am PDT by
Just two days after Apple further advanced its Apple silicon portfolio with the M1 Pro and M1 Max, marking the first professional high-end chips designed for the Mac, Intel is reportedly making yet another attempt to win Apple back as a customer. A day before Apple's long-awaited "Unleashed" event, Intel's CEO, Pat Gelsinger, said despite Apple moving away from his company's processors, he st...
maxresdefault

Intel CEO Hopes to Win Back Apple by Making Better Chips Than Apple

Sunday October 17, 2021 8:07 pm PDT by
In a new episode of Axios on HBO shared by MarketWatch, Intel CEO Pat Gelsinger sat down with Axios' Chief Technology Correspondent Ina Fried to discuss various topics, including Apple's transition to its own custom-designed silicon chips across its Mac lineup. When asked if Intel has given up on the idea of the Mac running on Intel processors in the future, Gelsinger said that he hopes to...

Popular Stories

anker 563 dock ports

Anker's Latest USB-C Docking Station Brings Triple-Display Support to M1 Macs

Wednesday May 18, 2022 7:06 am PDT by
While Apple's early M1-based Macs can only officially support a single external display, there are ways around the limitation. Anker is launching a new 10-in-1 USB-C docking station today which delivers just that. The Anker 563 USB-C dock includes two HDMI ports and a DisplayPort port, and it leverages DisplayLink to carry multiple video signals over a single connection. Given that this hub...
Prosser Series 8 3

Apple Watch Series 8 Rumored to Feature New Design With Flat Display

Wednesday May 18, 2022 6:21 am PDT by
The Apple Watch Series 8 could feature an all-new design with a flat display, according to the leaker known as "ShrimpApplePro." In his latest video on the YouTube channel Front Page Tech, Jon Prosser highlighted information from ShrimpApplePro that suggests the Apple Watch Series 8 could feature a flat display in what seems to be a design originally rumored for the Apple Watch Series 7. ...
apple ar headset concept 1

Apple's Headset Said to Feature 14 Cameras Enabling Lifelike Avatars, Jony Ive Has Remained Involved With Design

Friday May 20, 2022 6:50 am PDT by
Earlier this week, The Information's Wayne Ma outlined struggles that Apple has faced during the development of its long-rumored AR/VR headset. Now, in a follow-up report, he has shared several additional details about the wearable device. Apple headset render created by Ian Zelbo based on The Information reporting For starters, one of the headset's marquee features is said to be lifelike...
apple data auction iphone privacy ad

Apple Highlights iPhone's Latest Privacy Features in New 'Data Auction' Ad

Wednesday May 18, 2022 9:00 am PDT by
Apple today shared a new ad highlighting iPhone privacy features like App Tracking Transparency and Mail Privacy Protection that are designed to give users more transparency and control when it comes to their personal data being collected. The ad revolves around a young woman named Ellie who discovers that her personal data is being sold at an auction house, with bids being placed on her...
apple ar headset concept 2

Apple's AR/VR Headset Nearing Completion as Board Gets Demo

Thursday May 19, 2022 9:52 am PDT by
Apple last week demonstrated its upcoming AR/VR headset to Apple board members, indicating that the device is in an advanced stage of development and could see a debut in the not too distant future, reports Bloomberg. Apple has also ramped up development of the software that runs on the headset, with that software expected to be called "RealityOS," or rOS for short. Render via designer Ian ...