NOTWe have all had this little logo displayed on our computer keyboard in front of our eyes for a long time. “Intel Inside”, he proclaimed proudly, to reassure us about the quality of the machine. The body mattered little, as long as the engine was signed by the world leader in electronic chips, Intel. Associated with Microsoft, he formed the diabolical “Wintel” couple, which monopolized the microcomputer market, attracting the wrath of all the competition authorities in the world. In vain. The Wintel Empire seemed established for eternity. But eternity is short in the turbulent world of technology.
Since then, the wheel of innovation has turned so fast that it has destroyed the American empire. Friday, January 27, Intel announced the worst results in its history. A loss of nearly 700 million dollars (643 million euros) for the fourth quarter of 2022 and a turnover down 32%. Supreme humiliation, the invincible American was overtaken in turnover by the Taiwanese subcontractor TSMC and the Korean electronics specialist Samsung.
Fragmentation
In fact, it was the collapse of its two main markets that caused this historic loss, which should continue at the start of 2023. The PC market, so valiant in the era of repeated confinements, collapsed in last quarter of 2022 by almost 28% and Intel’s sales in this sector by 36%. Ditto for the lucrative data center server chip segment, where sales fell nearly 33%. Intel now seems more “outside” than “inside”.
The Californian, a true pioneer in the microprocessor sector, missed two crucial steps. The first is that of the mobile phone, which made the fortune of its competitors Qualcomm and TSMC. The firm did not manage to develop a sufficiently economical and efficient chip. The second is not having believed in the power of the concept of the fragmentation of the value chain made possible by globalization: the factoryless company, so decried today. Its competitors Qualcomm, Nvidia and even its old rival AMD have concentrated on research and design, leaving it to Asian specialists like TSMC or Samsung to invest huge sums in building ever more sophisticated factories.
Intel’s new boss, Pat Gelsinger, wants to catch up on TSMC’s technological lag and also become a subcontractor for its competitors, such as Samsung, while saving $10 billion a year to straighten out its accounts. Not easy, at a time when overcapacities are appearing everywhere, foretelling difficult times for all players in the business.