The Fall of the Semiconductor Giant: Intel's Decline

Just two years ago, Intel’s stock was trading at $64 per share, but as of the 4th, 

Selling the Future for Survival

Just two years ago, Intel’s stock was trading at $64 per share, but as of the 4th, it had plummeted to $20 during trading. This represents a drop of about 60% this year alone, and at this rate, Intel might even be removed from the Dow Jones Industrial Average, which includes top-performing stocks. Intel, a comprehensive semiconductor company known for its chip design, manufacturing, technology development, and packaging, has long been referred to as a "semiconductor empire." However, after deciding not to invest in OpenAI, which developed ChatGPT, Intel missed out on the AI trend. Furthermore, its attempt to re-enter the foundry (contract semiconductor manufacturing) business in 2021, despite a significant investment, failed. Now, Intel faces a crisis and is considering abandoning and selling its key future business to ensure survival.

The Reshaping Semiconductor Market

The semiconductor industry is continuously evolving. The heyday of comprehensive semiconductor companies (IDMs) like Intel has passed since the 2000s, and the trend has shifted towards companies like TSMC that focus solely on one area of semiconductor processing. The industry is now highlighting "packaging" as a new core process. Packaging involves stacking various semiconductors to form groups and is crucial for AI semiconductors. South Korea’s comprehensive semiconductor company, Samsung Electronics, is also grappling with this issue. Its main product, memory semiconductors, is being overtaken by China, and it has yet to catch up with Taiwan in the foundry sector. Additionally, its packaging technology does not rank among the top ten globally. Packaging requires collaboration with materials, components, and equipment industries, but South Korea faces structural issues with limited collaboration among various small and medium-sized enterprises (SMEs) in these areas.

🚆 In December 2023, Toshiba, a former comprehensive semiconductor company from Japan, was delisted. The primary reason for its downfall was its failure to adapt to new technology trends in the 1990s. At that time, Samsung Electronics surged ahead, leaving Toshiba behind. It’s difficult to avoid changes over time. Innovation occurs when one actively adapts to changes, whereas being forced to change often results in decline. The innovation train is currently departing, and it’s crucial to catch it.