It’s a shining instance of the previous cliche that those that don’t study from historical past are doomed to repeat it. When Paul Otellini took over as CEO in 2005, he needed to minimize Intel’s wasted effort on communications again then as properly. Intel tried to turn out to be a participant within the comms enterprise, making over a dozen acquisitions of small corporations that by no means went anyplace. In the long run, it fell to Otellini to scrub up the mess simply as Tan is doing now.
Popping out of the earnings name, there was appreciable misunderstanding on an announcement made by Tan concerning the 14A node course of. Tan mentioned the next on the quarterly earnings name with Wall Avenue analysts, as per transcript on Looking for Alpha:
“As much as and thru Intel 18A, we might generate an affordable return on our investments with solely Intel Merchandise. The rise in capital value at Intel 14A, make it clear that we want each Intel merchandise, and a significant exterior buyer to drive acceptable returns on our deployed capital, and I’ll solely make investments once I’m assured these returns exist.”
This has been interpreted by some as stating that Intel will cancel 14A if it doesn’t get sufficient exterior prospects, which isn’t the case, consultants mentioned. For starters, it wants 14A for its personal processors. And secondly, Tan didn’t imply he would cancel the design node.
“The rise in capital prices at Intel 14A make it clear that we want each Intel Merchandise and a significant exterior buyer to drive acceptable returns on our deployed capital, and I’ll solely make investments once I’m assured these returns exist,” Tan said.
First, Intel has beforehand introduced that it’s working with two early exterior prospects on 14A and it has its personal merchandise already dedicated to 14A. “I feel that the best way it was offered it freaked everybody out,” mentioned Jim McGregor, principal analyst with Tirias Analysis. “I feel they have been attempting to make a degree to their prospects to say hear, we want you to stomach as much as the bar not simply keep on the fence.”