The investment firm Third Point would like to persuade Intel’s CEO Omar Ishrak to put the corporate strategy to the test. Not even your own microchip production should be sacred. Third Point is one of Intel’s larger shareholders and can put pressure on the market leader accordingly.

In a letter Daniel S. Loeb, founder and CEO of Third Points, explains to Intel that Intel has underperformed financially in recent years. That was what Reuters reported about the letter. Last year alone, market capitalization shrank by 60 billion US dollars, laments Loeb. Intel had to hand over its leadership in microprocessor manufacturing to the Taiwanese TSMC and Samsung in South Korea. Both already produce in 5-nanometer technology and are already working on more advanced manufacturing processes.

Intel’s manufacturing processes are lagging behind Intel, on the other hand, only had to introduce chip production in the 7 nm process from the middle 2022 to the end at best last year 2022 or move the beginning 2023. In addition, there is Intel’s 10 – nm fiasco, which still does not allow high quantities. Therefore the company still has to fall back on the nm production for the next generation of its desktop CPUs (“Rocket Lake-S”) .

With their further developed manufacturing technology, TSMC and Samsung have secured orders from Intel competitors such as AMD and Nvidia. Loeb’s letter has been interpreted in numerous media reports as a request to close Intel’s own chip factories. But the investor does not really commit himself.

US government demands domestic production Because outsourcing would also raise questions of American national security, as Loeb notes in the letter to Intel. The group should hire an experienced investment advisor to examine strategic alternatives. This includes possible exits from unsuccessful investments, and whether Intel should continue to be a manufacturer of integrated solutions. Third Point even threatens to nominate its own candidates for the board of directors at the next annual meeting of investors if the current board of directors does not cooperate or evades dialogue with investors.

What Loeb really from Intel about the commitment of a consultant is not entirely clear. A complete outsourcing of processor production would be difficult, because Intel also manufactures for the US Department of Defense. These chips are unlikely to be produced in Asia.

In addition, one must assume that Intel’s manufacturing technology is tailored to the chips it has developed itself and not could be so easily adapted by others. The same applies if Intel should offer its production facilities to other chip developers. TSMC and Samsung seem to be more flexible in these cases if, for example, they can manufacture CPUs and graphics chips for AMD and Nvidia as well as mobile chips for Apple, Qualcomm and MediaTek in Taiwan.

After the letter became known Third Points to Intel on Tuesday, Intel’s share price rose 6.1 percent.

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