We’ve beenwritinga lot aboutIntelthis pastyear, so we were shocked but not surprised by the news.
So now our question for the community is: what happens next?
Even as a growing chorus on the Intel Board began calling for a split, Gelsinger stayed the course.
Now that he is exiting, does the company have a new strategy?
As of today, officially, it does not.
That is what happened when this Board hired Gelsinger three years ago.
Moreover, there are some clues in the company’s press release announcing the departure.
But these are not normal times.
The company is hemorrhaging share, margins, and soon, cash.
Time is not on Intel’s side.
As much as splitting the company in twomakes sense on paper, the practicalities of it are immensely difficult.
What will happen to the manufacturing process during that time?
Will they continue to work towards 18A?
That is reasonable enough as it is already ramping to volume, but 18A will not save the company.
Do they continue to invest in that with a CEO focused on the product side?
Another alternative is for the company to cease development of its own production processes and license TSMC’s.
Again, this sounds appealing on paper, and we know many who advocate it.
But this does not solve the problem either.
To compete, the company has to finda few dozen billion dollars.
They cannot cost-cut their way to those numbers.
Of course, this is what the company did before Gelsinger.
It was not working then, and the company is in much worse shape now.
Absent a clear strategic imperative behind the fabs, keeping the two sides together likely dooms them both.
Split the company up.But that will take years and so ends up looking just like the old strategy.
Sell the company.The only company capable ofpulling that off is Broadcom.
Maybe they are interested in a deal, or maybe they think buying software companies is much easier.
Shut down the fabs.In fact, most of their alternatives likely end in this.
