Can Pat Gelsinger turn Intel around? thumbnail

“SUCCESS REPRODUCES complacency. Complacency breeds failure. Only the paranoid survive.” So stated Andy Grove, the Hungarian emigré who helped turn Intel from a scrappy start-up in the 1960 s into the firm that did more than any other to put the “silicon” in Silicon Valley. They will be sounding in the ears of Pat Gelsinger, Intel’s brand-new manager, who took control of on February 15 th. He takes the helm of a business that looks, from some angles, to be in rude health. With $78 bn in income in 2020, it is the world’s biggest chipmaker by sales. It has a 93%share of the marketplace for effective– and profitable– chips that enter into data-centre computer systems, an 81%share in desktop PCs, and operating margins of around 30%.

Yet Intel’s share cost has actually underperformed those of competitors. Nvidia, a firm with one-seventh of Intel’s profits, has a market capitalisation, at $370 bn, that is half as high again (see chart). The manufacturing technology on which much of Intel’s success was built has fallen behind. It …
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By Admin