How the formerly iconic intel fell into a 20 -year drop

We are about to discover it in a bizarre case that could not only modify the career of a CEO, but also a unique American business jewel, a world industry, and what a previous trade secretary called “the most important element of equipment of the 21st^st century.”

The drama started on the morning of August 7, when President Trump published a brief statement on Truth Social: “The CEO of Intel is very conflict and must resign, immediately. There is no other solution to this problem. Thank you for your attention to this problem! ” The post suddenly drawn attention to a letter that senator Tom Cotton (R.-Ark.) Had sent to the Chairman of the Board of Directors of Intel two days earlier. He said that the CEO of Intel LIP-BU Tan “will control dozens of Chinese companies” and that a multinational company had recently pleaded guilty to have violated US export controls “under the mandate of Mr. Tan”, among other accusations. At the end of the day, Tan had sent a letter to the Employees of Intel saying: “There was a lot of disinformation circulating on my past roles…. I have always worked in the highest legal and ethical legal standards “, and Intel had declared to the media:” We are impatiently awaiting our continuous commitment to the administration. ” The action dropped by 5% on a day of increase for the market, another blow to the shareholders of Intel who had hoped – finally – that things could have achieved the bottom.

How Intel has lost its edge

It would have been a story of a day if it was not Intel, formerly the largest manufacturer of the most advanced computer flea in the world.

This decline began about twenty years ago, when the company made several acquisitions, many of which were in telecommunications and wireless technology. In the concept, it made sense. But acquiring companies is its own competence, and David Yoffie, a professor of the Harvard Business School who was part of the Board of Directors of Intel at the time, said Fortune “100% of these acquisitions failed. We spent $ 12 billion and the yield was zero or negative. ”

Intel has also tried in vain to seize the opportunity of the gigantic mobile phone. The company understood the opportunity and provided fleas for the very popular BlackBerry phone. The chips were designed by Arm, a British company that designs fleas but does not make them. Intel naturally preferred to make telephone chips with its own architecture, known as X86. The company has decided to stop making arm fleas and creating an X86 chip for mobile phones – in retrospective, “a major strategic error”, explains Yoffie. “The plan was that we would have a competitive product within a year, and we ended up not having a competitive product in a decade,” he recalls. “It was not that we missed it. It is that we did it.”

Over the years, a simple mediocre management has slipped. Intel continued to miss new chip deadlines and losing market share. The company has abandoned smartphones fleas. The CEOs were replaced, but the production problems continued until, by 2021, for the first time in the existence of Intel, his tokens were two generations behind the competitors. These competitors were the TSMC of Taiwan and Samsung from South Korea.

In Crisis mode, the Board of Directors of Intel brought back Pat Gelsinger, an engineer who had spent 30 years at Intel before leaving for 11 years to be a high -level executive at EMC then CEO of VMware. As CEO of Intel, he announced an extraordinarily ambitious and expensive plan to recover the stature of the company as a world leader in flea technology. In February of this year, as the share price fell, the commission dismissed him and brought Tan.

Despite everything, Intel is still crucial because it is the only American company with technology and know-how to make peak fleas in America, although it has not done it in eight years. At the highest level of geopolitics, primacy in chips is at the heart of power, and in the past eight years, the fastest and most precious fleas in the world have only been manufactured in Taiwan and South Korea. This is why Congress adopted chips and science act with bipartite majorities. He became the law in 2022 and from last year sent billions of dollars to manufacturers of flea, American and foreign, building new factories and other flea infrastructure in the Intel United States allocated the most subsidies, about 8 billion dollars plus loans, although the company did not receive most money, which is based on the outlets.

It’s as if the money was coming a little too late. “Intel has had an excellent opportunity,” explains Gauvar Gupta, analyst of Gartner’s research company. “They received all these government’s subsidies. But I think they just couldn’t perform. ” At that critical moment, poor performances were expensive. “A year and a half ago, there was still a positivity with Intel,” said Alvin Nguyen, analyst of the Forrester research firm. “Now, not as much. The negativity that struck them is just a snowball.”

Let us now suppose that Tan should resign from CEO. “Who wants this work?” Request Stacy Rasgon, a long -standing technological analyst at Bernstein. He observes in a recent note that Tan “does not need to” need “to manage Intel (he is very rich and has many other things to occupy his time) … He clearly wants to do what is best for Intel …” But it is difficult to resign would be good or bad for the company, “especially with Trump’s reticle on the back.” Rasgon, speaking to FortuneAsk: “How do you attract someone else in this place?”

Obtaining tanning was not easy. “The Board of Directors took a while to find the new CEO when (the previous boss) Pat Gelsinger left,” explains Gupta. “It took a long time to find a candidate willing to take control and direct the company in one direction.”

Nevertheless, Yoffie and three other former Directors of Intel have argued in a declaration Fortune For a new company, a new board of directors and a new CEO, turning his manufacturer of Intel in an independent company to guarantee American domination of the manufacture of Tamias.

Trump’s position is putting itself at the center of a crucial enigma for national security. Global domination requires a reliable source of peak fleas. This is why the trade secretary, Gina Raimondo, in 2024, said that they were “the most important equipment …” The world’s largest producer of cutting -edge tokens from a distance, TSMC of Taiwan, built two FAB in Arizona, subsidized by the Act chips, with more planning. “You can argue that the more the capacity accumulates in Arizona, maybe the less information we need,” explains Rasgon. But TSMC is not an American company, and Nguyen says that “the best TSMC technology certainly does not come to the United States at the moment”.

Which leaves Intel. “They are the only American company to be able to do so,” explains Rasgon. “But Intel must still prove that they could deliver. They have not proven it.” Trump highlighted the former iconic business. But the identification of problems and solving them are two very different questions, which Intel-Watchers have experienced for two decades.