Intel’s death spiral is an opportunity to rethink EU chip strategy

Following yet another disappointing quarter, Intel last week announced draconic cost savings. Roughly 15,000 or 15 percent of the chipmakers’ workforce will be laid off, this year’s capex will be slashed by 20 percent and measures will be introduced to reduce operational cost. Yet Intel’s long-term strategy, which includes the heavily subsidized construction and expansion of multiple fabs across the globe, remains the same, CEO Pat Gelsinger assured last week.

Yeah, right. It would be mistaken to jump to conclusions in the drama of the moment, but the fact of the matter is that Intel has been in dire straits for a long time. As one industry observer put it: the company was in a death spiral before and is still in a death spiral. Another said Intel’s issues are now “existential”.