Why Intel is Failing: A Crucial Year Ahead

Intel faces significant challenges in 2025. The company must navigate an industry it no longer dominates. Its turnaround efforts, initiated by former CEO Pat Gelsinger, have yet to succeed. Intel aims to become a world-class foundry but struggles on multiple fronts.

Struggles in the PC Market

Intel is losing market share in the PC market. Sluggish demand and competition from AMD hurt its position. Qualcomm’s Arm-based laptop CPUs add to the challenges. Intel’s dominance in this market is fading fast.

Problems in the Data Center Market

Years of weak products have left Intel vulnerable in data centers. AMD’s impressive comeback has intensified the competition. Spending has also shifted toward AI chips, further impacting Intel’s market share. These factors keep Intel on the back foot.

Manufacturing Challenges

Intel’s foundry business struggles to gain momentum. Customer wins have been scarce, despite its ambitious roadmap. The company’s success hinges on delivering its next-generation process technology on time.

Intel 18A: The Turning Point

Intel 18A is the cornerstone of Intel’s foundry strategy. This process node promises industry-leading performance. It features a new transistor design and backside power delivery. Intel plans to launch Intel 18A in early 2025. Ramp-up to full production will take time.

Securing Big Customers

Intel has attracted Microsoft and Amazon as Intel 18A customers. However, meaningful foundry revenue remains elusive. Most foundry revenue still comes from internal operations. Intel’s goal of $15 billion in external foundry revenue by 2030 depends on Intel 18A.

Risks of Delays

Any delay or misstep with Intel 18A could be catastrophic. Intel’s product roadmap relies on this process. The foundry business also depends heavily on Intel 18A’s success.

Advances in PC and Server CPUs

Intel plans major launches in both PC and server markets in 2025.

PC Market Plans

Intel will launch Panther Lake in late 2025. This product will bring manufacturing back in-house. Key parts of Panther Lake will use the Intel 18A process.

Server Market Plans

Intel’s Clearwater Forest CPUs will target efficiency-focused workloads. These processors will feature energy-efficient cores, ideal for cloud applications. Like Panther Lake, Clearwater Forest relies on the Intel 18A process. Delays with Intel 18A would disrupt both product launches.

Leadership Crisis

Pat Gelsinger’s sudden retirement leaves Intel without clear leadership. The company has interim co-CEOs, but no permanent replacement. A new CEO is urgently needed to reshape Intel’s strategy.

Cultural Challenges

Changing Intel’s entrenched culture will be a tough task. The new CEO must address these challenges to restore Intel’s glory.

A Potential Turnaround Stock

Intel’s stock has plummeted amid uncertainty. Despite this, Intel remains the only U.S.-based advanced semiconductor manufacturer. Its stock trades below book value, reflecting market pessimism.

Long-Term Potential

Intel’s product roadmap and foundry ambitions hold promise. With the right leadership, Intel could regain its competitive edge. The company’s future depends on executing its strategy successfully.

Key Takeaways

• Intel needs a new CEO to lead a critical turnaround.
• The success of Intel 18A is vital to the company’s future.
• Intel’s product roadmap and foundry business depend on flawless execution in 2025.