How 2018 was for Intel
Previously, we discussed Qualcomm’s (QCOM) licensing dispute with Apple (AAPL). One company that has benefited from this dispute is Intel (INTC), which secured modem orders for all 2018 iPhone models. Intel has also been boosted by stronger-than-expected data center and PC market demand, which is forecast to send its 2018 earnings to a new high.
What challenges could 2019 bring for Intel?
The real challenge for Intel could begin in 2019, when competition from Advanced Micro Devices (AMD) picks up. AMD is set to launch its next-generation Ryzen CPUs (central processing units) and EPYC server CPUs on TSMC’s (TSM) 7nm (nanometer) node in 2019. With these new 7nm products, AMD could overtake Intel, which still produces 14nm processors.
Until now, Intel’s process technology was unbeatable. If Intel loses its manufacturing technology advantage, it could lose its pricing power and may have to price its products competitively to maintain its market share. Intel’s profits largely depend on the high prices it charges for its products.
Who will be Intel’s next CEO?
The 10nm delays and rising competition have become headwinds, and Intel does not have a permanent CEO to handle these headwinds. In June, the company announced the abrupt resignation of CEO Brian Krzanich. CFO Robert Swan is now serving as CEO on an interim basis, but Intel is still looking for a permanent CEO. Bloomberg has reported that Intel has shortlisted four candidates for the CEO position:
- Navin Shenoy, head of Intel’s data center business
- Murthy Renduchintala, Intel’s chief engineering officer
- Sanjay Jha, former CEO of Global Foundries
- Anand Chandrasekher, former president of Qualcomm Datacenter Technologies
Intel’s new CEO would be tasked to deal with the 10nm delays and strong competition. Next year, Intel investors should watch for updates on the new CEO and the launch of 10nm products. Next, we’ll look at AMD.
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