Lots More on the Ongoing Mess That Is Intel

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Odd Lots 32 min 7 speakers 5 chapters transcribed 1 month ago
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What is the main topic discussed in this episode?

Carol Masser 0:00
Gain insight on the innovators, disruptors, and tech-driven trends shaping today's complex economy. I'm Carol Masser. And I'm Tim Stenevek.
Nick Goodall 0:08
Wrap up your workday with the Bloomberg Businessweek Daily Podcast.
Carol Masser 0:11
We bring you deeper dives into the stories shaping your world, from the evolution of AI to the shifting priorities of global business. Plus, Silicon Valley power players and the latest tech trends. Catch up on the conversations you miss during the day.
Nick Goodall 0:24
Subscribe to the Bloomberg Businessweek Daily Podcast on Apple, Spotify, or anywhere you listen.
Carol Masser 0:33
Bloomberg Audio Studios. Podcasts. Radio. News.
Joe Weisenthal 0:40
I am worried about Intel. No, for real.
Tracy Alloway 0:43
We're recording this on October 1st, so I'm worried about some other things, but sure, sure.
Joe Weisenthal 0:48
No, there's plenty to worry about in the world. But I'm worried about Intel specifically because it's all nice to talk about industrial policy and we're going to build these. you know, build out all these industries, et cetera. But here we have one of the true industrial giants, one of the flagship companies of the United States, getting a lot of support, our leading company in the field of semiconductors, which is a major strategic priority for the US. And they do not seem to be doing well at all. The stock is absolutely dismal. They're cutting jobs. If this is the flagship company, like them and Boeing gloom very large in my head about, I guess what I would say is like, I don't know if corporate rot is too strong of a word, but yeah, like corporate rot.
Tracy Alloway 1:33
Not to add to your anxiety, but did you also see some of the headlines coming out of North Carolina about quartz sand?
Joe Weisenthal 1:40
Oh, yeah. I don't know what that's all about.
Tracy Alloway 1:41
It's kind of an interesting one. So after Hurricane Helene, there's a town called Spruce Pine where apparently most of the world's supply of pure quartz sand comes from, and that could have an impact on the production of semiconductors. So I guess we get to unveil the bullhorn for the bullwhip effect again. Yeah.
Joe Weisenthal 2:02
We're not doing this again. Apparently we are doing this again. I did a deadlift. One, two, three.
Tracy Alloway 2:11
Hegemony. Okay, good. Hegemony. Barges.
Joe Weisenthal 2:16
This is an after-school special, except...
Tracy Alloway 2:18
I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the U.S.

Why is Intel considered the flagship U.S. semiconductor company and why is it struggling?

Joe Weisenthal 2:24
Where's the best squid ink pasta?
Tracy Alloway 2:26
These are the important questions. Is it robots taking over the world? No, I
Joe Weisenthal 2:29
think that, like, in a couple of years, the AI will do a really good job of making the Odd Lots podcast. And people will say, I don't really need to listen to Joe and Tracy anymore. We do have... Cha-ching. The perfect guest. Welcome to Lots More, where we catch up with friends about what's going on right now.
Tracy Alloway 2:48
Because even when Odd Lots is over, there's always lots more.
Joe Weisenthal 2:52
And we really do have the perfect guest. Stacey, what's going wrong at
Stacy Rasgon 2:59
Intel? What's not going wrong at Intel right now? They're in a tough spot, right? I mean, they are... embarking on a very risky and capital intensive strategy. I say embarking, but frankly, they've been along on this strategy for quite a few years now. Yeah,
Joe Weisenthal 3:18
because CEO Pat Gelsinger came in
Stacy Rasgon 3:20
in
Joe Weisenthal 3:20
2021. And so we're like at least three years into what is supposedly an embarkment on a new strategy. And if
Stacy Rasgon 3:28
I just look at the
Joe Weisenthal 3:29
stock price, it's lower than it was in 2015.
Stacy Rasgon 3:31
Yeah, in fact, you know, I actually looked, I launched on the stock in June of 2009, I think it was $15.94, so 15 or 16 years ago, and it's not that far off of there now. It's had
Unknown 3:44
a
Stacy Rasgon 3:44
bit of a bounce in the recent weeks, we can talk about why, but in general, they're in a tough spot. Yeah, I mean, the biggest issue that they're having, and we can argue is the strategy, the right one or the wrong one, that's a discussion we can have, but It might be that the biggest issue is just the core business that was supposed to support them as they rolled that strategy out is no longer really sufficient to support it anymore, but they may be too far along their path to stop, right? The whole idea was, You know, we're going to be doubling down on manufacturing. We're going to be building lots of factories in the U.S.

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