Intel, once the biggest and most valuable U.S. chip company, has been surpassed by numerous rivals in recent years due to a series of missteps.Intel is now the worst-performing tech stock in the S&P 500 this year, while rival chipmaker Nvidia is the second-best performer in the index.Although Intel's revenue is longer shrinking and the company remains the biggest maker of processors that power PCs and laptops, sales in the first quarter trailed estimates.
They discussed whether Intel should power the iPhone, which had not been released yet, Jobs and Otellini told Isaacson. When the iPhone was first revealed, it was marketed as a phone that ran the Apple Mac operating system. It would've made sense to use Intel chips, which ran on the best desktops at the time, including Apple's Macs.
Arm-based chips quickly improved due to the enormous manufacturing volumes and the demands of an industry that needs new chips every year with faster performance and fresh features. Apple started placing huge orders with TSMC to build its iPhone chips, starting with the A8 in 2014. It gave TSMC the cash to upgrade its manufacturing equipment annually and surpass Intel.
"Intel lost a big chunk of their market share because of Apple, which is about 10% of the market," Gartner analyst Mikako Kitagawa said. Engineers, especially at Intel, took pride in regularly delivering smaller transistors. Braithwaite, who worked at Intel in the 1980s, said Intel's process engineers were the company's"crown jewels." People in the technology industry relied on"Moore's Law," coined by Intel co-founder Gordon Moore, that said the amount of computing power would double and become cheaper at predictable intervals, roughly every two years.
The delays compounded at Intel. The company missed its deadlines for the next process, 7nm — eventually revealing the issue in a bullet point in the small print in a 2020 earnings release, causing the stock to plunge, and clearing the way for Gelsinger, a former Intel engineer, to take over. Graphics processor units, or GPUs, were originally designed to play sophisticated computer games. But computer scientists knew they were also ideal for running the kind of parallel calculations that AI algorithms require.
Intel doesn't have a GPU competitor to Nvidia's AI accelerators, but it has an AI chip called Gaudi 3. Intel started focusing on AI for servers in 2018 when it bought Habana Labs, whose technology became the basis for the Gaudi chips. The chip is manufactured on a 5nm process, which Intel doesn't have, so the company relies on an external foundry.
Intel has faced its old failures since Gelsinger took the helm in 2021, and is actively trying to catch up to TSMC through a process that Intel calls"four nodes in five years."