Tuesday, December 29th 2020
Hedge Fund Urges Intel to Outsource Chip Production: Reuters
Intel is familiar with chip manufacturing problems since the company started the development of a 10 nm silicon semiconductor node. The latest node is coming years late with many IPs getting held back thanks to the inability of the company to produce it. All of Intel's chip production was historically happening at Intel's facilities, however, given the fact that the demand for 14 nm products is exceeding production capability, the company was forced to turn to external foundries like TSMC to compensate for its lack of capacity. TSMC has a contract with Intel to produce silicon for things like chipsets, which is offloading a lot of capacity for the company. Today, thanks to the exclusive information obtained by Reuters, we have information that a certain New York hedge fund, Third Point LLC, is advising the company about the future of its manufacturing.
The hedge fund is reportedly accounting for about one billion USD worth of assets in Intel, thus making it a huge and one influencing shareholder. The Third Point Chief Executive Daniel Loeb wrote a letter to Intel Chairman Omar Ishrak to take immediate action to boost the company's state as a major provider of processors for PCs and data centers. The company has noted that Intel needs to outsource more of its chip production to satisfy the market needs, so it can stay competitive with the industry. The poor performance of Intel has reflected on the company shares, which have declined about 21% this year. This has awoken the shareholders and now we see that they are demanding more aggressiveness from the company and a plan to outsource more of the chip production to partner foundries like TSMC and Samsung. It remains to be seen how Intel responds and what changes are to take place.
Source:
Reuters
The hedge fund is reportedly accounting for about one billion USD worth of assets in Intel, thus making it a huge and one influencing shareholder. The Third Point Chief Executive Daniel Loeb wrote a letter to Intel Chairman Omar Ishrak to take immediate action to boost the company's state as a major provider of processors for PCs and data centers. The company has noted that Intel needs to outsource more of its chip production to satisfy the market needs, so it can stay competitive with the industry. The poor performance of Intel has reflected on the company shares, which have declined about 21% this year. This has awoken the shareholders and now we see that they are demanding more aggressiveness from the company and a plan to outsource more of the chip production to partner foundries like TSMC and Samsung. It remains to be seen how Intel responds and what changes are to take place.
24 Comments on Hedge Fund Urges Intel to Outsource Chip Production: Reuters
/ontop
This reminds me of that AMD scam a while back to manipulate stock prices.
Seems like a pump and dump scheme.
There was a weekend special cover at a local newspaper a few years back. The lady guest stated her managerial position at Intel and, I kid you not, she openly stated "At the company meetings, she was happy to feel that she was the stupidest person in the room". Just how much of a backward society Intel has become over the years. Race to the bottom, you would say?
Intel has multiple fabs on multiple location that are far larger than their competitor, sure they behind on process technology, but in term of supply chain, no one close
Usually would be in the cheapest labor and power available countries
Don't see that in Arizona or USA in general even though it would be fully automated power in the USA will be rising soon.
At this point, it's too late. TSMC can't even keep consistent supply for buyers outside of Apple. There is just too much demand. It's easy for a hedge fund activist to just come out and say this, but in practice where is Intel going to go for outside fabbing that is competitive with TSMC nodes which are already maxed out.