Intel, once a titan of innovation in the tech world, now faces significant challenges in a fiercely competitive semiconductor market.
As the company looks to reclaim its former glory, the spotlight is on CEO Pat Gelsinger, who draws inspiration from the legendary leadership of Andy Grove. With a focus on revitalizing Intel's manufacturing capabilities and technological confidence, Gelsinger's journey is a critical test of whether the company's storied past can fuel its future success.
In today's global semiconductor foundry market, the two main competitors from the East and West hemispheres, TSMC and Intel, faced pivotal moments approximately 30-40 years ago. During the startup period of TSMC, Intel also encountered a life-or-death challenge.
Two years before TSMC was founded in 1985, Intel faced a transformation from potential death to unprecedented success. The key figures in this transition were Intel co-founder Gordon Moore and the legendary CEO Andy Grove.
Over 30 years ago, while Morris Chang was tirelessly establishing TSMC, Moore and Grove, Intel's first employee, made critical decisions to redefine the company. They effectively 'fired' themselves and then 'rehired' themselves to lead Intel away from the memory business and into a new era.
The term "transformation" might sound straightforward, but Grove recalled that when he joined Intel in 1968 at the invitation of Moore and the other founders, he was initially terrified. "I gave up a stable income and a familiar job for something completely unknown. It was extremely scary," he admitted.
In 1985, Moore and Grove decided to cut Intel's memory business and focus on CPUs—a move that, in hindsight, seems wise. However, Grove once mentioned in an interview, "Our production lines were primarily for memory chips, and I absolutely hated microprocessors at the time." He also confessed that Intel's transformation led the company to lose its direction temporarily and wander in the "valley of death."
At the beginning of 1985, Moore and Grove's decision to rehire themselves to lead Intel through this transformation resulted in the company's future dominance in the CPU market.
However, during the initial phase of Intel's shift from memory to CPU business, it took the company three years to complete the transformation. Had it not been for the subsequent partnerships with IBM and Microsoft, which bolstered the Wintel alliance, Intel's dominance in the CPU market might have been uncertain.
Andy Grove, Intel's legendary CEO, had a protégé in Pat Gelsinger, who worked at Intel for over 30 years and was promoted to CTO. Gelsinger expected to become CEO but eventually left for EMC and VMware after a long wait. In late 2020 and early 2021, amid a crisis at Intel, he was invited back to turn the company around.
In February 2021, Gelsinger became Intel's CEO, returning with a commitment to Grove's culture. In his inaugural speech, he outlined a grand vision for Intel: not only to maintain leadership in chip design but also to revive chip manufacturing and even offer foundry services for third-party customers.
Despite Intel's increasingly apparent financial struggles, Gelsinger is willing to risk everything. He believes wafer manufacturing will help Intel regain its "technical confidence." Although Gelsinger possesses Grove's determination, investors have lost confidence in Intel. However, with the backing of the US Congress's CHIPS Act and political expectations, Gelsinger's gamble might not end in defeat.
