News Intel hires Morgan Stanley to protect itself against activist investors

[Admin]

Amid the lack of activism, Intel wants to protect itself against activist investors.

Intel hires Morgan Stanley to protect itself against activist investors : Read more

 

[Marlin1975]

Seems they are more worried about the stock price/control of the company than turning it around.

 

[vanadiel007]

I see them go into bankruptcy protection next. They are loosing market value and market share at an alarming rate and don't seem to have any direct plans besides "saving money" to turn it around.

Unless they are still banking on ARC GPU's, but I think that bird has never taken off.

 

[Avro Arrow]

"Intel's data center and AI business generate just a little more sales than the data center business of its arch-rival AMD, which holds a considerably lower data center market share by volume."

Yeah, we'll see just how long this lasts because the market has been moving towards EPYC more or less since its inception.

 

[Kondamin]

The whole thing smells like a setup from the start, having them over stretch with government grants all over the world so they are 50billion in the hole and then collectively attacking them so they go down.

if the US is smart they bail them out

 

[dweb p]

Can anyone, even MorganStanley protect any corporate entity, even Intel, from Blackrock's woke blackmail?

Recent Intel blunders have an eerie resemblance to Boeing and Disney.

 

[Kondamin]

Can anyone, even MorganStanley protect any corporate entity, even Intel, from Blackrock's woke blackmail?

Recent Intel blunders have an eerie resemblance to Boeing and Disney.

I doubt you are allowed in a clean room without a degree, you might be allowed in HR, PR, Finance...

 

[Avro Arrow]

Seems they are more worried about the stock price/control of the company than turning it around.

That's corporate America for ya.

I see them go into bankruptcy protection next. They are loosing market value and market share at an alarming rate and don't seem to have any direct plans besides "saving money" to turn it around.

Unless they are still banking on ARC GPU's, but I think that bird has never taken off.

I would be really shocked if Intel went bankrupt. They have their fingers in many more pies than CPUs and GPUs.

The whole thing smells like a setup from the start, having them over stretch with government grants all over the world so they are 50billion in the hole and then collectively attacking them so they go down.

if the US is smart they bail them out

That's all the American taxpayers need, more socialism for the rich while they themselves get nothing. If the US is smart, they'll implement universal healthcare before giving greedy executives more assurance that American taxpayers will bail them out if they're incompetent.

What the US government needs to do is let a huge corporation fail because that will send a message to the other huge corporations that they better smarten up because they won't be bailed out anymore.

Intel isn't in danger of failing. They're just losing market share in CPUs. They still do lots of other things like Motherboards, RAM, GPUs, Network Adapters, etc.

 

[DavidC1]

That's corporate America for ya.

I would be really shocked if Intel went bankrupt. They have their fingers in many more pies than CPUs and GPUs.

You do know majority of their revenue is from their CPUs? Their GPU revenue is negligible.

They have massive debt and raptorlake degradation to deal with. They are in a really bad position. Worst in the history of the company. When US collapses they'll be among the first to go.

That's all the American taxpayers need, more socialism for the rich while they themselves get nothing. If the US is smart, they'll implement universal healthcare before giving greedy executives more assurance that American taxpayers will bail them out if they're incompetent.

Ah blame the rich. The problem with socialism isn't the rich businessman but the government, like it always have been.

 

[stuff and nonesense]

Intel isn't in danger of failing. They're just losing market share in CPUs. They still do lots of other things like Motherboards, RAM, GPUs, Network Adapters, etc.

They have cash, they have markets but if they are losing market share in .. say.. CPUs, that means fewer motherboards. If they are losing market share in server, then Optane / memory and motherboards don’t sell. That leaves GPUs and networking, I’m sure they can sell parts to competitors but their core will be gutted unless they can turn around the issues that have caused the share price falls.

 

[Kondamin]

That's all the American taxpayers need, more socialism for the rich while they themselves get nothing. If the US is smart, they'll implement universal healthcare before giving greedy executives more assurance that American taxpayers will bail them out if they're incompetent.

OT

Healthcare doesn't need to be 'socialized' in the US it's already socialized but in the worst possible way for the taxpayer. ~$1.5trillion in taxes per year go directly into healthcare that's ignoring the rest of the +4 trillion that goes to social security.
And a ~3trillion to keep the rest running

Healthcare needs to be reformed.

On Intel,

intel is in a 50billion hole makeing it very vunerable to sharks that want to destroy it to make a quick buck.
It's an extremely important company for the nation and as you know it's in not to that bad a shape.
It needs some protection and in a couple of years those investments will start earning them money and by then they can pay the loan back.

 

[AkroZ]

It's normal for Intel's Foundry to lose money, they invest massively in building foundries, you need time to have return on investments.
The issue comes to the fact that Intel's Foundry have failed to make big contracts that is not some spin-off of Intel CPU. It's mostly Intel CPU.
As Intel CPU doesn't sell well then they will have difficulties to have return on investments, meaning Intel can potentially go bankrupt if they can't repaid the debts (48 billions as of June 2024).
Intel need to produce good CPU with no issues to relaunch sales.

Intel isn't in danger of failing. They're just losing market share in CPUs. They still do lots of other things like Motherboards, RAM, GPUs, Network Adapters, etc.

Intel doesn't produce motherboards for AMD CPU, they only produce for their CPU and they are not the only seller, if they don't sell CPU then all their products doesn't sell well. It's not the sales of the like of Thunderbolts chips that will reimburse the debt.

 

[vanadiel007]

Their best bet would be to shrink their portfolio of products, spin of what they can, and concentrate all R&D on what is left and is making money or has the potential to make money.

Once recovered they can branch out again, get into new markets and product segments.

Right now they are in no position to branch out. It would surprise me if ARC survives this.

 

[dweb p]

I doubt you are allowed in a clean room without a degree, you might be allowed in HR, PR, Finance...

Your point being?

 

[hotaru251]

I do wonder if Intel will axe their gpu dev team after Battlemage.
They likely make near no profit from them or lose it & thats not ideal for a company thats struggling to keep it going.

I fully expect them to bounce back even if they do become more narrow focused....its Intel & they have the $ and people to do so. (even amd managed it and if Zen failed they were gonna bankrupt which was a worse situation than Intel is in)

 

[Kondamin]

Your point being?

Boeing being being staffed by drugged up warm bodies doing the job of technicians

 

[USAFRet]

This is about Intel, and only Intel.

Let's leave other companies and programs out of this.

Further off topic comments will simply be deleted.

 

[gamerk316]

Seems they are more worried about the stock price/control of the company than turning it around.

Under US law, yeah, that's their mandate. That's why most companies employ short-term policies that ultimately result in the companies becoming hollow shells of themselves.

 

[gamerk316]

It's normal for Intel's Foundry to lose money, they invest massively in building foundries, you need time to have return on investments.
The issue comes to the fact that Intel's Foundry have failed to make big contracts that is not some spin-off of Intel CPU. It's mostly Intel CPU.

The issue is that ever since Intel made the decision to skip over EUV @14nm, they've fallen farther and farther behind the competition. Samsung and TSMC have leaped ahead of Intels foundry, and this has a direct effect on Intels CPU performance. Heck, I'd argue this resulted directly to Intels current problems, as they had to clock their chips far too aggressively to make up the performance gap.

At this point, Intel has the problem of a non-leading edge HW division, combined with an aging CPU architecture. Something has to give somewhere.

Intel isn't in as bad a financial situation as AMD prior to Ryzen releasing (you know, when AMD had outstanding debt due in less then a year worth more then their companies total valuation? Remember *those* discussions?) But it's not in a good situation by any means, and things could get worse *very* quickly if Intels next design fails to sell (due to performance or just optics).

Frankly, Intel needs to either invest the cash necessary to fix its HW division, or spin it. Keeping a non-leading edge foundry is just a money sink, as AMD found out over a decade ago. But its been a good decade since Intel made the first mistake (skipping EUV in the short term due to cost), and it hasn't gotten better.

 

[bit_user]

Seems they are more worried about the stock price/control of the company than turning it around.

If that were really true, they wouldn't have suspended the dividend!

Under US law, yeah, that's their mandate.

LOL, no. They need to make decisions that prioritize investors' interests, but that doesn't stipulate whether those interests are short-term vs. long-term. And nowhere does it say anything about the current stock price.

That's why most companies employ short-term policies that ultimately result in the companies becoming hollow shells of themselves.

That's a more complicated subject.

 

[bit_user]

I absolutely think Intel should spin-off their foundry business. However, now would not be the best time, as it's not yet self-sufficient.

The risk of spinning it off too soon is that it ends up going down the same path as Global Foundries and just milks legacy nodes for as long as it can, without continuing to invest in new ones. They need the new nodes to provide a more profitable path for the company, in order to secure investor support for remaining a leading-edge fab.

 

[bit_user]

Their best bet would be to shrink their portfolio of products, spin of what they can, and concentrate all R&D on what is left and is making money or has the potential to make money.

Once recovered they can branch out again, get into new markets and product segments.

This is what Gelsinger has been doing since pretty much his Day 1. At this point, he's already cut all the easy stuff, and is now having to make some really difficult and painful cuts, according to what he's said.

Right now they are in no position to branch out. It would surprise me if ARC survives this.

The dGPU business isn't something you can just flip on/off like a light switch. It took them like 5 years to get as far as they've come. They will lose most of that progress, if they mothball it now. I hope they at least break even on Battlemage, as that might be enough to save Celestial and Druid.

I am definitely planning on buying a Battlemage GPU. I probably would've bought an Alchemist+, but I guess that got cancelled. Honestly, the main thing keeping me away from Alchemist was just the high idle power.

 

[thestryker]

I absolutely think Intel should spin-off their foundry business. However, now would not be the best time, as it's not yet self-sufficient.

The risk of spinning it off too soon is that it ends up going down the same path as Global Foundries and just milks legacy nodes for as long as it can, without continuing to invest in new ones. They need the new nodes to provide a more profitable path for the company, in order to secure investor support for remaining a leading-edge fab.

While I agree completely in principle I'm not convinced that a US based leading edge foundry is sustainable period. The vast majority of shareholders have no interest in long term health and that's absolutely required for that industry since it's capital heavy. I could see the majority holders having no interest in whatever comes after High-NA and just making due since there doesn't appear to be any shortage of fabrication needs on the horizon.

The US based capital heavy story that always sticks with me is when Verizon was rolling out FIOS across the country. It was very capital heavy, but also effectively guaranteed returns due to how cheap it is to operate once the fiber is installed. They were about 5 years in and faced a shareholder revolt due to the costs even though their initial installation areas had paid for themselves. The problem the "investors" had with this was basically that it would take too long for them to get their returns.

 

[stuff and nonesense]

Accountants are the enemy of r+d and engineering as is short term expectation.

Investors come in two basic varieties, short term and long term. Both want to see profits. The long term investor sees long term growth as the benefit. The short term investor looks for a quick buck.

I recall seeing an article saying that Intel was next on the list for the most up to date lithography machines, these require investment but give the potential for good returns.
Intel can make good products, accountants held too much sway through the 2010s and development was stalled. “We are making good money, why change what we are doing?” There wasn’t real competition in the main market Intel served, x86 so.. why worry.
Things change, sure Zen 1 wasn’t brilliant the development has been consistent, arguably Intel has fallen behind. Intel has concentrated on accelerators which are nice in themselves but not general purpose. If a company doesn’t need the accelerator it doesn’t licence that part … no money for the inbuilt silicon. It looks good having it available but if it’s not used, no revenue.

Intel fabs making 3rd party silicon.. tough one here, Intel has a history of screwing over the competition, 386 licensing.. delay through the courts, lose, but the competitors silicon was out of date because the new generation, 486, was released. Bribes, threats against OEM companies in the late 1990s to mid 2000s, proven in courts around the globe. Business has a long memory, are they a trustworthy manufacturing partner? I can’t answer that question, I just throw it out there.

Spinning the fabs out completely could work, the required investment into that possible entity is huge, where is GloFlo now? Investments in technologies and techniques and maintaining those investments will be a drain until a reputation can be established, engineering will need to trump accounting - not to the point of driving the company into the ground but to provide a compelling business case for customers to want to switch to (post) intel manufacturing. TSMC has that reputation

 

[bit_user]

The US based capital heavy story that always sticks with me is when Verizon was rolling out FIOS across the country. It was very capital heavy, but also effectively guaranteed returns due to how cheap it is to operate once the fiber is installed. They were about 5 years in and faced a shareholder revolt due to the costs even though their initial installation areas had paid for themselves. The problem the "investors" had with this was basically that it would take too long for them to get their returns.

Well, FIOS is still doing new buildout, even if the pace has slowed. It just came to my neighborhood in January.