This year hasn’t been very kind to Intel.
There was the rocky Meteor Lake launch, the nearly disastrous release of Arrow Lake desktop this past fall, and rumors of a potential takeover by rival Qualcomm. The list goes on.
And to make matters worse, this week, Intel lost its CEO, appointed two board members, and began the search for a new leader to help pull the company out of its tailspin.
This begs the question: What exactly can Intel do to turn things around? Before we get to that, let’s recap how we got here.
2024 was a difficult year for Intel
Intel’s Core Ultra 100H “Meteor Lake” laptop processor launched just before the New Year, promising significant improvements to battery life, performance, integrated graphics, and an AI accelerator.
While Meteor Lake matched expectations for on-device AI and a better graphics tile, the performance and battery life didn’t quite match up. This poor reception was further complicated by Intel’s close partnership with MSI on the first Intel-powered gaming handheld PC, the MSI Claw, which suffered an incredibly rough launch and early reviews period.
In September, Intel had big plans for the follow-up to Meteor Lake, the Intel Core Ultra 200V “Lunar Lake” series, promising far better power efficiency, integrated graphics, and a competitive NPU with up to 48 TOPS (trillions of operations per second) performance.
While Lunar Lake experienced a solid launch and early reviews cycle, it was quickly undercut by microcode issues with the previous 13th and 14th generation processors and the grim launch of the Intel Core Ultra 200S+ 200K “Arrow Lake” desktop. Intel’s VP of Gen AI and Technical Marketing, Robert Hallock, has even confirmed that the Arrow Lake launch “did not go as planned.”
Intel’s end-of-quarter financial statement indicated a 6% revenue drop as of October 31, 2024. A large revenue drop year over year immediately following two major chip launches is not a good sign.
What happened at Intel this week
This week, Intel announced several major shakeups. Pat Gelsinger, Intel’s CEO for the last four years, retired on Monday, effective immediately.
Intel appointed Chief Financial Officer David Zinsner and CEO of Intel Products Michelle Johnston Holthaus as interim co-CEOs. The company’s board of directors is heading the search for the next Intel CEO. However, they may already have someone in mind for the job.
Zinsner said on Wednesday that Intel’s next CEO will have experience in the foundry and product sides of the business. Reuters reports that “Intel has started evaluating a handful of outsiders, including former board member Lip-Bu Tan, to take the reins of the struggling chipmaker.”
On Thursday, Intel appointed former president and CEO of ASML Holdings Eric Meurice and interim CEO of Microchip Technology Steve Sanghi to its board of directors.
What CEO Pat Gelsinger’s resignation says for Intel
Gelsinger’s ascension to Intel CEO four years ago was a moment of excitement. He joined the company at 18 and spent 30 years there from 1979 to 2009. Gelsinger returned in 2021 to become Intel’s new CEO and turn the company around from where it had been stagnating.
As The Verge reports, Gelsinger’s background as an engineer fostered the belief that he was the right man to lead Intel back to the cutting edge of computing.
Gelsinger inherited a flawed company. Before he was appointed Intel CEO in 2021, there had been generations of delayed chips, quality assurance problems, and a complete breakdown of the longstanding relationship between Apple and Intel. AMD and Nvidia took over the computing space, and TSMC overtook Intel’s manufacturing side.
Intel has had some success under Gelsinger. One of his main decisions was to reverse the company’s decision to abandon EUV (Extreme Ultraviolet Lithography) technology. He gave his engineers heavy financial backing to innovate in the chip space, and the company produced five nodes in just four years. Gelsinger also had big plans for the Intel Foundry to begin chip production state-side.
Gelsinger’s retirement from Intel indicates dissatisfaction among the Intel board. While Intel’s board may have felt it necessary to oust Gelsinger, it has only cast more doubt on the chipmaker’s future. After all, both interim CEOs have finance backgrounds, and Intel brought Gelsinger in specifically because he was an engineer.
Even replacing Gelsinger with someone with a background in the foundry and product side of the business isn’t guaranteed to generate immediate results. After all, Gelsinger only got three years into his five-year plan to turn Intel into a leader in client computing and chip manufacturing.
What Intel needs to do to turn things around
Intel has undoubtedly been on the back foot since the Apple M-series chips launched and broke benchmark records for performance and battery life. Intel was able to coast along as the name in Windows processors up until about a year ago, mainly as Apple focuses its business primarily on the mobile side with laptops and tablets. But if you wanted high-performance desktop processors, Intel was still the biggest name in town.
AMD has been closing that gap, and this year, AMD’s Granite Ridge has become the desktop chip to buy for gamers — a fact that has only been cemented since Arrow Lake’s shaky desktop launch.
On the laptop side, Qualcomm’s Snapdragon X Elite and AMD’s Ryzen AI launches this summer made the Windows competition steeper.
But if you go back to 2019, Apple laptops were not doing well. Those poorly optimized Intel MacBooks were products only diehard Apple loyalists could stomach. In 2024, Apple’s M4 chipset has set the standard.
So far, Intel has compromised on chasing power efficiency over pure performance, with a secondary focus on AI — and that tactic doesn’t seem to be working.
Intel is set to launch the Arrow Lake Core Ultra 200H and 200HX chipsets at CES 2025, which will be held January 7-10 in Las Vegas. Intel reps have indicated that fixes are available for some of Arrow Lake’s most significant issues.
This upcoming iteration of the Arrow Lake chipset needs to launch perfectly, offering a satisfying amount of raw performance power and battery life on the mobile variant.
Intel needs to beat Apple’s benchmark records. Or at least close the gap.
