(News) The fall of a semiconductor giant: Intel and the CEOs who changed its fortunes

After a disappointing second-quarter performance, Intel has been beset by a series of problems, with its stock price plummeting to its lowest in more than a decade, the company suspending its dividend, cutting staff, and Product failure. The company may be going through its worst period in the last 50 years, and now the market appears to be losing patience with the once-dominant semiconductor giant.

Even Pat Gelsinger, who took over as CEO in 2021 and brought his tech expertise with him, has yet to save the beleaguered giant.

Over the past 50 years, Intel has had eight CEOs, each of whom left an indelible mark on history. Some of their decisions led Intel to such a low point that it was difficult to turn it around.

A new report from Technews looks back at Intel’s past, outlines the impact of the company’s past CEOs, and examines how the tech giant’s development trajectory is inextricably intertwined with that of semiconductors.

What happened before the Intel Foundation?

Let’s go back to 1956. At that time, William Shockley, known as the “father of the transistor,” left Bell Labs to found the Shockley Semiconductor Laboratory.

However, Shockley’s autocratic management style and erratic behavior led to discontent among employees, who he called the “Traitor Eight” and who resigned in 1957 to form Fairchild Semiconductor.

Fairchild grew rapidly but also faced organizational management problems. In July 1968, two of the company’s founders, Robert Noyce and Gordon Moore, resigned and on July 18 of that year founded Integrated Electronics, which later became known as Intel. Andy Grove then joined the company as the third employee.

They are considered the founders of Intel and the three men who formed the management triumvirate: Noyce in charge of research and development, Moore in charge of business operations, and Grove in charge of commercialization and operations. The Big Three led Intel for the first 30 years, during which it enjoyed a glorious period from 1968 to 1998.

(From left: Gordon Moore, Robert Noyce, Andy Grove)

First CEO: Robert Noyce (1968–1975)

Under Noyce’s reign, Intel introduced the first microprocessor in 1971, heralding the beginning of the personal computer (PC) era and the Golden Age of Silicon Valley. This groundbreaking invention earned Noyce the nicknames “Mayor of Silicon Valley” and “Father of Silicon Valley.”

It’s worth noting that both Noyce and fellow Texas Instruments engineer Jack Kilby were pioneers of the integrated circuit (IC). Kilby developed the world’s first integrated circuit at Texas Instruments in 1958, earning him the title “Father of the IC.” The following year, Noyce came up with the concept of the first planar IC with metallic interconnects in a notebook, laying the foundation for all modern IC technology.

2nd CEO: Gordon Moore (1975–1987)

The famous “Moore’s Law” was proposed by Moore in 1965. However, the development of integrated circuits was still in its early stages, so the concept was somewhat speculative.

Moore’s prediction was intended to convey the idea that electronic products would become increasingly affordable, and surprisingly, it came true. Taking into account the exponential growth in IC complexity, Moore revised his prediction in 1975, stating that the number of transistors on an IC would double roughly every two years. This law established the foundations of the semiconductor industry. However, it is still a hot topic today among semiconductor giants such as TSMC, Intel, and NVIDIA.

3rd CEO: Andrew Grove (1987–1998)

Grove followed his boss Moore out of Fairchild and became Intel’s third employee to assume a management position, following Noyce and Moore.

In the 1970s, Intel’s main products were DRAM and SRAM. As Japanese companies began to dominate the global market with DRAM, the profits of the product line rapidly declined. Grove therefore decided to stop producing DRAM-related products and instead focus on integrated circuit applications.

This decision allowed Intel to seize a major opportunity in the PC era.

Additionally, one of the key decisions during his tenure was to manufacture the 386 processor on its own, thus demonstrating Intel’s ability to manufacture its own processors and establishing Intel as the undisputed leader in the early 1990s.

When Intel was founded, its annual revenue was just $2,672. Thirty years later, by 1997, its annual revenue had grown to $20.8 billion. Grove played a key role in that success, and was named Time magazine’s Person of the Year in 1997. He also summarized his management philosophy in his book, “Only the paranoid survive.”

4th CEO: Craig Barrett (1998–2005)

Craig Barrett was an associate professor of materials science and engineering at Stanford University before joining Intel, where his main challenge was to determine whether Intel could become a company that could handle “low margins.”

At the time, the market believed that the highly profitable era of the semiconductor industry was over and that the future of PCs would be dominated by low-cost models, so he led Intel through two major transformations.

The first was the fragmentation of Intel’s processor products – the company’s rapid transformation made it difficult for competitors to keep up and disrupt Intel’s position in the low-cost market – while the second was its expansion from computers/computing to network servers.

Barrett also believed Intel’s competitive edge lay in manufacturing and research and development, and invested $28 billion in building advanced facilities and developing new technologies to ensure Intel’s leadership in manufacturing technology.

5th CEO: Paul Otellini (2005–2013)

Under Otellini’s leadership, Intel underwent another major change: as Intel’s first CEO with no engineering background, Otellini only had an MBA degree.

Although Intel’s financial performance was strong during his tenure, the company’s emphasis shifted from technology to performance, prioritizing sales and marketing over technological advancements, a shift that set the tone for Intel’s subsequent decline.

In 2005, Intel won an order from Apple to use its chips in Macs, but when Apple asked Intel if it would supply processors for the iPhone, Otellini turned it down, saying he didn’t think the deal was cost-effective — a decision that meant Intel missed out on a market for mobile devices that boomed after the iPhone was released in 2007.

Otellini saw Intel’s platform as more valuable than selling the chips individually, and it helped Intel secure market share in the x86 market. But the company’s technological advantage began to wane, and the global recession caused Intel to close five factories, including its last in Silicon Valley.

6th CEO: Brian Krzanich (2013–2018)

With the PC market in decline, new CEO Brian Krzanich, in charge of technology and management, was once again faced with a major challenge to transform the company. During his tenure, Intel shifted its focus to the Internet of Things (IoT) and cloud computing.

But Krzanich said, Extreme UV raysIn 2017, he opted to abandon ASML’s first-generation EUV equipment, which resulted in Intel’s 10nm progress being delayed multiple times, causing it to fall behind competitors such as TSMC and Samsung at advanced nodes, and even losing market share to rival AMD.

7th CEO: Robert (Bob) Swan (2019-2021)

Intel was plagued with many problems that were difficult to overcome, such as the 10nm process issue. During Swan’s tenure, Intel’s market dominance gradually declined. In some areas, AMD even caught up and took Intel’s throne.

At the same time, instead of using Intel’s chips, Apple introduced its own custom-designed M1 processor, which could be the final straw in breaking down Intel’s dominance.

In addition, Intel discussed investment opportunities with OpenAI from 2017 to 2018, but Bob Swan believed generative AI models would be difficult to commercialize in the near term and determined the deal would not be profitable, so Intel passed up the opportunity to participate in the AI ​​boom.

8th CEO: Pat Gelsinger (2021-present)

All three previous CEOs came from business or finance backgrounds, so Pat Gelsinger, with his technology background, was expected to bring a fresh perspective to Intel.

Given the challenges ahead, he made plans to significantly expand Intel’s factories, announced a “four nodes in five years” plan aimed at advancing five nodes within four years, and bet Intel’s future on the 18A process.

But even before the 18A technology was introduced, Intel had been plagued by problems including layoffs, dividend suspensions, and a stock price that was close to its tangible book value. It remains to be seen whether Gelsinger will be the savior that pulls Intel out of its predicament. Only time will tell.

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(Photo courtesy of Intel)