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Intel's Comeback: A Daunting Challenge
Bill Gates, Microsoft's co-founder, recalls Intel's dominance in the tech industry during his early coding days. However, Intel's resurgence faces significant hurdles.
"It would be advantageous for the US to establish a credible alternative to Taiwan Semiconductor (TSM) and Samsung. Intel is pursuing this, but it requires time and investment," Gates said on Yahoo Finance's Opening Bid podcast.
Gates cautions, "History is replete with lessons. IBM once dominated the industry but now pales in comparison to Microsoft."
Intel's Recent Struggles
Intel has endured a challenging year, losing CEO Pat Gelsinger. Gelsinger's cost-cutting, CHIPS Act funding, and foundry construction efforts failed to yield desired results.
Interim co-CEOs David Zinsner and Michelle Johnston Holthaus face a daunting task. Restoring investor confidence, redefining the foundry business, and stabilizing financials are pressing concerns.
Intel's fourth-quarter sales and earnings declined significantly. The company anticipates break-even profitability for 2023.
Analyst Perspectives
Wall Street remains skeptical of Intel, with 80% of analysts rating the stock a "Hold."
Citi analyst Chris Danely advises Intel to exit the foundry business due to mounting losses.
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