Intel’s interim co-CEOs, David Zinsner and Michelle Johnston Holthaus, reaffirmed the company’s commitment to innovation and cost control following the unexpected departure of CEO Pat Gelsinger. At an investor conference, they emphasized advancing Intel’s contract chip-making ambitions and improving chip designs while navigating financial pressures. To address cash constraints, Intel plans to sell a stake in its Altera programmable-chip unit and potentially reduce its majority stake in Mobileye. Despite these challenges, Intel’s stock saw a modest rise, signaling cautious investor optimism.
My Take
The strategy outlined by the co-CEOs is essentially a stay-the-course strategy. Nothing new. Intel’s dual focus on designing competitive chips and building a contract manufacturing business diverges from the industry trend of becoming either a fabless company or a pure-play foundry. This hybrid approach is a high-risk, high-cost strategy. It is doubtful that any strategy stated by the interim CEOs will survive the new CEO and the ultimate strategy agreed upon with the board. Continuing the same strategy with a new CEO is unlikely.
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Credit: Wall Street Journal