Broken CPUs, workforce cuts, cancelled dividends and a decade of borked silicon—how has it all gone so wrong for Intel?

HardwareProcessorsBroken CPUs, workforce cuts, cancelled dividends and a decade of borked silicon—how has it all gone so wrong for Intel?When you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.

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(Image credit: Future)

An Intel Core i7 14700K with an Intel Raptor Lake branded box.

Let’s begin with a brief recap of the current state of play at Intel. For starters, despite bold promises to regain technology leadership, it remains miles behind TSMC (Taiwan Semiconductor Manufacturing Company Limited) in chip manufacturing and indeed is increasingly relying on TSMC to manufacture its latest and future CPUs, such as Meteor lake, Lunar Lake and Arrow Lake.

Meanwhile, it’s losing market share to AMD in server CPUs,Qualcomm’s Snapdragon X Arm-based chipsare a real threat in Intel’s largest consumer market, laptops, Intel’s Arc graphics effort has been a bit of a flop so far, and now itslast two generations of desktop CPUs are badly broken.

Most recently, Intel announced some very poor financial results and decided it needed to fireanother 15,000 employeesafter already trimming 5% of its workforce last year, a move that CEO Pat Gelsinger branded “some of the most consequential changes in our company’s history.”

That’s just the Cliff notes. There are several other lesser horror stories, like reigning in plans to build fabs in Europe and the fact that things are so bad Intel cancelled dividend payments to shareholders. But an obvious question follows. How did Intel get it all so wrong?

Arguably, you could say the rot set in when Paul Otellini replaced Craig Barrett as CEO way back in 2005. Barrett had a PhD in materials science from Stanford. Otellini was an economics grad with an MBA. Put simply, sales replaced engineering at the top of Intel.

Admittedly, Intel’s next CEO Brian Krzanich was from the engineering side, but let’s not allow details like that to get in the way of an easy narrative. The story goes that Intel got lazy and cynical under sales and marketing-driven leadership, leaned into its near monopoly status in the x86 market, and it was all downhill from there.

More specifically, the most obvious indication of Intel in decline were its troubles with the 10nm node. Originally scheduled to go into production in 2016, Intel first conceded that thenode would be delayedin mid 2015.

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Strictly speaking, Intel released a small number of dual-core Cannonlake CPUs on 10nm in 2018. But it wasn’t until the Ice Lake mobile CPU launched in late 2019 that 10nm really went live. Arguably, it wasn’t until 2020 that Ice Lake laptops were available in volume.

Will Intel’s microcode patch really fix everything with its broken 13th and 14th Gen chips?(Image credit: Future)

Intel Core i5 13400F CPU in a motherboard socket

In the cutting-edge chip industry, that’s a catastrophic delay. Indeed, if you consider the Intel chips you can buy in PCs today, the picture barely gets any better. Thosebroken 13th and 14th Gen desktop CPUsare on the Intel 7 node, which is a rebrand and revision of the 10nm technology that was meant to go on sale nearly 10 years ago.

It’s not totally clear how Intel’s next-gen Arrow Lake desktop chips will be made. But they’re definitely chiplet designs and rumours suggest that most models will have all-TSMC silicon for the active tiles, with perhaps a few low-end SKUs using Intel silicon for a single active tile.

In other words, Intel continues to increase the TSMC content in its chips, including for chips that have yet to go on sale. We’re still years away from Intel being able to reverse that placeholder strategy of farming out production because its own production nodes aren’t good enough.

It’s worth dwelling on that for a moment. He we are in 2024 and Intel is increasing the proportion of its production at TSMC for future processors because its own nodes aren’t good enough.

Intel Wafer Capacity

Intel hopes to move from largely using its fabs to produce its own chips to also being a major contract manufacturer of chips for customers. It’s in that new role as a customer fab that it hopes to not only make better chips of its own, but also take on TSMC directly.

Moreover, if the rumours that Intel 4 yields are still problematic, what are the odds that its upcoming 20A and 18A nodes are going to be zingers from day one? When you put it altogether, it’s clear that whatever Intel is claiming for its bold strategy of introducing five new nodes in four years, the company is still a long way from recovery.

Indeed, when you factor in the debacle with 13th and 14th Gen Raptor Lake desktop CPUs, rumours of continued problems with Meteor Lake supply and Intel latest financials and belt tightening, it’s hard to see how things aren’t continuing to get worse.

That’s particularly disheartening in the context of the arrival of Intel’s latest CEO, Pat Gelsiginer, in 2021. Gelsinger is supposed to be one of the good guys, an Intel engineer who was forced out of the company during its marketing-skewed days, who then returned to right the ship.

Please, please let Intel’s Arc graphics survive the company’s latest round of spending cuts.(Image credit: Future)

Intel Arc A750 Limited Edition graphics card

Obviously Intel is far from done. It’s still a huge company with massive resources. Who’s to say that two years from now it won’t have some stellar CPUs on the market, plus perhaps a third generation of Arc graphics cards taking the fight to Nvidia and AMD.

On that latter note, it would be a massive shame if Intel Arc graphics become a casualty of Intel’s need to save costs any time soon. The PC gaming graphics market desperately needs more competition and a healthy Intel would be good for all of us.

Your next machine(Image credit: Future)Best gaming PC: The top pre-built machines.Best gaming laptop: Great devices for mobile gaming.

Your next machine

(Image credit: Future)Best gaming PC: The top pre-built machines.Best gaming laptop: Great devices for mobile gaming.

(Image credit: Future)

Gaming PC group shot

Best gaming PC: The top pre-built machines.Best gaming laptop: Great devices for mobile gaming.

If that’s somewhat speculative, what’s clear in the here and now is that Intel needs to get its act together and fast. The first thing it should do is provide far better clarity over the status of those borked Raptor Lake processors. Yes, it has now announced atwo-year warranty extension, but there’s still a lack of clarity hanging over the whole affair.

After that, well, it really could do with sorting out those fabs. But that’s looking like a far, far taller order.

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