Technology
Richard Windsor argues SoftBank’s $2bn investment in INTC, alongside a potential 10% US government stake, may keep the company alive but does little to resolve its strategic paralysis. INTC faces a stark choice: either invest heavily to catch up with TSMC or break up the business - yet under new CEO Mr. Tan, neither path is clear. The board abandoned Pat Gelsinger’s catch-up strategy due to mounting costs, leaving INTC exposed to further share losses in PCs (to AMD and Qualcomm) and in data centres (to Nvidia and AMD). Richard warns that without decisive strategy, customer confidence will erode, competitors will gain share with ease and capital injections alone cannot avert decline. He sees no attractive entry point in INTC shares.
Edition: 218
- 22 August, 2025
TSMC’s massive $40bn+ capex plans has all the hallmarks of peak cycle
Robert Windsor believes history will repeat itself and that there will be a sharp downturn as new capacity comes online and demand moderates at the same time. The industry has a fundamental mismatch between supply which is lumpy (fabs) and demand which is smooth, and so, while the causes of every semiconductor cycle are different each time, the result is always the same. The sector has performed extremely well over the last 18 months, but some valuations look pretty stretched and the looming downturn threatens to unwind a lot of the gains.
Edition: 127
- 21 January, 2022