Intel Agrees to Change Market Strategy after Investors Urge

CIOReviewIndia Team | Wednesday, 30 December 2020, 14:31 IST

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With activist investors Daniel S. Loeb’s letter to Intel, it states about his significant investigation on chipmaker for exploration of ‘strategic alternatives’ to maintain the competitive edge in the market. Daniel, who had bought significant stakes in Intel through Third Point LLC – a New York – based hedge fund, which operates as an employee-owned and SEC-registered investment advisor with approximately $17 billion in assets under management, implied that Intel has lost its apex position in microprocessor manufacturing to Taiwan Semiconductor Manufacturing Co, Samsung Electronics Co Ltd, and others. Daniel suggested strategic alternatives including a possible breakup of the chipmaker and the sale of assets.

Daniel wrote the following in his letter –

“Previously reliably able to progress its process technology every two to three years, Intel has been stuck at its 14-nanometer node since 2013, while TSMC and Samsung both transitioned to 5-nanometer this year and Intel’s plan to roll out its 7nm node late 2022 or early 2023 will place the company several years behind its Asian peers for at least the first half of this decade. This lag in advanced semiconductor manufacturing is a vulnerability that must be corrected.”

But Intel has agreed to uphold the interest of the investors and on a statement released, Intel said, “Intel Corporation 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.”

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