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Intel can't even grow profits during a global chip shortage – where did it all go wrong?
theconversation.com, Jan. 28, 2022 –
American chip-making giant Intel is a shadow of its former self. Despite the global semiconductor shortage, which has boosted rival chipmakers, Intel is making less money than a year ago with net income down 21% year over year to US$4.6 billion (£3.4 billion). Unfortunately, this is an ongoing trend.
Intel was the world's largest chipmaker until 2021, when it was dethroned by Samsung. Though Samsung's main business is memory chips, which is a different segment of the market to Intel's microprocessors, it is sign of Intel's decline. We've been tracking global companies' future-readiness at the International Institute for Management Development (IMD), and Intel now comes out 16th in the technology sector.
There are two fundamental issues, according to Matt Bryson, an analyst at Wedbush Securities: "[Intel] fell behind AMD in chip design and Taiwan Semiconductor (TSMC) in manufacturing." During the most recent earnings call with analysts, CEO Pat Gelsinger had to concede that the technology in Intel's data-centre processors hadn't been improved in five years. In his words, it was "an embarrassing thing to say".
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