Reuters
- Intel soared 8% on Tuesday after hedge fund activist Third Point sent a letter to the chip maker urging it to explore strategic alternatives, according to Reuters.
- Third Point, headed by Daniel Loeb, has amassed a nearly $ 1 billion stake in Intel, Reuters said, citing people familiar with the matter.
- “Without an immediate change at Intel, we fear that America’s access to the supply of cutting-edge semiconductors will erode, forcing the US to rely more heavily on a geopolitically unstable East Asia to power everything from PCs to data centers and infrastructure. critical, “said the letter. .
- Watch Intel’s trade live here.
Intel rose 8% on Tuesday after hedge fund activist Third Point sent a letter to the chip maker urging it to explore strategic alternatives, according to Reuters.
Third Point, headed by billionaire investor Daniel Loeb, has accumulated a nearly $ 1 billion stake in Intel, Reuters reported, citing people familiar with the matter.
According to the letter, which was reviewed by Reuters, Third Point calls for immediate action by Intel President Omar Ishrak to boost the company’s position as a major supplier of processor chips for PCs and data centers.
“Without an immediate change at Intel, we fear that America’s access to the supply of cutting-edge semiconductors will erode, forcing the US to rely more heavily on a geopolitically unstable East Asia to power everything from PCs to data centers, infrastructure criticism and more, “the letter said.
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Third Point believes that a possible course of action for Intel would include the company separating its chip design from its semiconductor manufacturing operations, and could include a joint venture in manufacturing, Reuters reported.
In recent years, Intel has lost market share to Advanced Micro Devices, and key customers like Apple, as companies develop their own chips in-house and outsource manufacturing to East Asia.
According to Loeb, Intel lost its pole position in microprocessor manufacturing to Taiwan Semiconductor Manufacturing Co and Samsung Electronics.
Another path to a turnaround at Intel includes the company addressing its “human capital management issue” as many of its chip designers have fled in recent years, “demoralized by the status quo,” the letter said, according to Reuters .
In a statement, Intel responded to the letter from Third Point and said, “Intel Corporation appreciates the contributions of all investors regarding increased shareholder value. In that spirit, we look forward to engaging with Third Point LLC in your ideas. towards that goal. “
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