Opinion: Intel is in a Very Bad Place, and They Need to Admit It

upstart writes:

And while Intel is fighting for its life, the rest of the industry is moving on:

In reality, Intel is not the giant of the industry. Intel's total share of industry capacity is around 10%, they are not a giant who has stumbled, they are a niche player and have been for years. Admittedly, they occupy a high-value, high-price niche, but it is a niche nonetheless.

The best analogy we can think of here is automobiles. Mercedes sells around 10% of cars in the US, just as Intel has about 10% of industry capacity. Now imagine if Mercedes somehow lost its brand - maybe a massive recall or a series of high profile vehicle-caused accidents. They would not only lose market share but also all their brand value, causing a long term downward sales trend that would be very expensive to dig their way out. Intel is the luxury brand of semis and suddenly their cars do not move fast. We have tortured that analogy enough, the point is that Intel really does not occupy the strategic high ground we all thought it did.

After their last set of results, especially their guidance for 2023, we are increasingly of the opinion that Intel is out of options. They forecast they are going to burn $15 billion in cash next year, a huge amount even for a company with $34 billion of net cash on their balance sheet.

After their disastrous roadmap event last month, we have to call in to question the company's ability to accurately forecast their business. We actually have many more examples of systematic flaws in their forecasting abilities, but none as public as that event. So we have little confidence in the company's $15 billion forecast, it could easily be much higher. Add to that the need to continue to fund their manufacturing needs and their cash needs are immense.

Nor is it clear if 2024 will be any better. At heart, we have always argued that the company has one task before it and that is an existential task - it has to catch up in manufacturing. The earliest they forecast achieving that is late 2024, which means it will likely not factor into results until 2025. By that time the company's bank balances will be dangerously low.

Read more of this story at SoylentNews.