Apparently the current Executives at INTC have not read the Harvard Business Professor's books on why large companies fail. Seems strange since the Professor was once a consultant at INTC. Per the Quarter Transcript these poor Executives are in total denial. Their world has changed before their very eyes, but they are still pursuing their compression strategy of the past 30 years--HELLO--Anybody Home? Gadgets have become throwaways--their economic life lasts as long as the next upgrade. The chip companies that are doing well only have to produce "just good enough" chips that are relatively low cost. The era of purchasing a computer for three or four years is history. Very few are looking for leading edge chips. Inexpensive and "good enough" is the new mantra. In the age of App Pages, the idea you spend huge amounts of R&D and Capex on plants and equipment to run various versions of Windows is really out of touch with reality. The Current and former CEO have spent tens of billions over the past 12 years pursuing a dead end strategy. Hopefully a new CEO will be somebody with a "vision" that includes a understanding of why large companies fail and how to avoid that fate!
Intel is taking a risk in building additional high end chip fabrication capacity in anticipation of demand for its chips in tablets and smartphones. As of today, this demand is zero, and as you correctly point out, Intel faces cut-throat competition in this space from well established players. Therefore, its unclear whether demand for Intel chips in tablets and smartphones will ever become significant. If it doesn't, their fabs will idle. I think this is the scenario the street fears most.
Intel had 12 Billion in profits and CEO is being replaced by new blood who contributed a lot to Intel's bottom line. His only misjudgment, imo, is buying MacCafee, yet profitable, instead of buying ARMH.
Intel sees the changing landscape, but there is little they can do about it in the near term. They are a chip company, and semiconductors are becoming commodities. The move to 450nm will help, but its gonna take a while.
ummmm...all I can say to that is ....duhhhhh. What on earth do you think the excess CAPEX spending is all about?? duhhhhhh. I'll spell it out: get the margins on mobile chips as BIG AS POSSIBLE by going to the unprecedented 450 mm wafer.... Does your Harvard Business Professor recommend NOT making margins go up? And #$%$ does this have to with your notion of fossil CEO's who aren't addressing the future? If I were you, I'd take your simpleton argument over to Taiwan Semi and ARMH and ask them if they've notived that 14nm and 10nm are about to arrive and, gee, maybe their world is about to change? And when you go, I hope the door slams your A ess ess so hard it bleeds.
Gadgets have become throwaways--their economic life lasts as long as the next upgrade
Thats why I'm so excited about Intel's future........People don't hold onto their phones for a long time, yet the demand for phones will NEVER go away which means Intel will eventually be sellling millions and millions of mobile chips every year as long as you and I are on this earth.