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Many of us grew up with Intel, some of us worked there, and I can say that the vast majority of us want Intel to succeed. Intel's latest PR blunder is the sudden departure of CEO Pat Gelsinger. For me, this confirms the answer to the question: "What went wrong with Intel?" But first, let's look at the big picture.

Hopefully, we can all agree that AI will change the world in the next decade. It has already begun, with AI moving from the cloud into our cars, homes, laptops, and phones. AI is also being weaponized and becoming a key technology driving conflicts around the world. Clearly, the leaders in the AI race will also be the leaders in the new AI world.

We should also be able to agree on the importance of semiconductor technology and the importance of controlling the semiconductor supply chain. The semiconductor shortage caused by the pandemic should still be fresh in our minds, and if you think that won't happen again, you're wrong.

When it comes to semiconductors, you can divide them into two categories: logic and memory. Currently, most cutting-edge logic chips come from Taiwan (TSMC), with Intel and Samsung in second and third place, respectively. Most memory chips come from Korea (Samsung and SK Hynix), with Micron in the U.S. and relatively new memory chip makers from China in third place. To be clear, logic is useless without memory, and memory is useless without logic.

Personal view about Intel

My personal motto has always been to prepare for the worst and hope for the best so you won't be disappointed. The best case scenario is that Taiwan and Korea continue to grow as they have for the past 50+ years. The worst case scenario is that they don't, the semiconductor supply chain breaks, and life as we know it ends. We may not go back to prehistory, but it will seem like prehistory to the younger generation.

There are two companies that are critical to the U.S. semiconductor manufacturing industry: Intel (logic) and Micron (memory). They are both semiconductor legends, and both are critical to the survival of the U.S. semiconductor manufacturing industry.

We can discuss Micron another day, but a recent podcast with Intel's Dr. Tahir Ghani (Mr. Transistor) reminded me of how important Intel is to the semiconductor industry. This week I attended IEDM, the premier semiconductor conference showcasing semiconductor innovation, and Intel was once again in the spotlight. This is a much longer technical discussion, so suffice it to say that Intel is critical to the semiconductor industry and to the United States.

Which brings us back to the question: What went wrong at Intel? In my opinion, Intel had the worst board in the history of the semiconductor industry. The hiring/firing of the first three CEOs is a clear example. Seriously, we are talking about 20 years of bad decisions that destroyed a semiconductor legend.

I wrote a blog about Intel's CEO saga in 2014 and updated it after Pat Gelsinger was hired, and I need to update it again. In my opinion, the board's poor decisions started when they hired Paul Otellini (Finance/Sales/Marketing) and then made an even worse choice, Brian Krzanich (Manufacturing). Firing Krzanich was even worse. How could the board not properly vet someone who had been at Intel his entire career? The reasoning for the firing was complete bullshit. Krzanich was the worst CEO Intel has ever had, and that's why he was fired. I liken it to Pat Gelsinger's "re-firing" statement. Why could the board reconsider firing a CEO? They are highly paid employees of a public company. Intel pays these people millions of dollars in salary and stock options to protect the company. Where are the activist investors now?

I also questioned the hiring of Robert Swan (Finance) as Intel's CEO. It turns out that Swan signed a huge deal with TSMC to save the company from Intel's 10nm failure, and he was later fired for it. I do believe that if Swan remains CEO, Intel will be fab-less, which is a very bad idea for the reasons stated above.

Regarding Pat Gelsinger, I was a big fan of him at first, but I told my contacts at Intel that their strategy should be "speak softly, but wield a big stick". Intel's culture is built on a virtual monopoly, and that monopoly has really given them the upper hand over the years. It is very dangerous to make overly optimistic statements. Unless you have enough revenue to back those statements up, those statements will get you in trouble sooner or later. Intel doesn't, so Pat is out of the picture, and that's just my opinion.

Let's be clear, Intel is an IDM foundry just like Samsung. TSMC is a pure-play foundry with hundreds of customers and partners collaborating on R&D and business strategy. No one is competing with it. If you compare Intel foundry to Samsung foundry, you get a very favorable result. TSMC's challenging head-to-head strategy has been tried before (Samsung and Globalfoundries) and billions of dollars were wasted. How could an experienced board allow this to happen?

As for the rumors of Intel being acquired, I think Broadcom is the only company that fits the bill. I believe Hock Tan can turn Intel around. I don't know what the financials are like, but Hock's management style will undoubtedly get Intel back to profitability.

Selling Intel's manufacturing division is ridiculous. Do you really think Intel designs can compete with Nvidia or even AMD without close ties to the manufacturing division? I was very excited when Intel signed the deal with TSMC because it was the first time that AMD, Nvidia, and Intel went head-to-head on the same process technology. You tell me how it turns out. Is Intel's new product disruptive? The entire leading-edge semiconductor industry is using TSMC N3. Without manufacturing, will Intel really make any sense?

The quick fix for Intel is to be acquired by Broadcom. Another option is to revive Pat 2.0 and replace the board. A third option is for the US government to step in and make semiconductor manufacturing a priority. Maybe Elon Musk can help Intel figure it out (kidding/not kidding).

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