News Roundup: Intel faces uncertain future

Two articles about Oregon’s largest employer underscore the challenges facing the semiconductor giant.

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The New York Times and the Oregonian published articles in their weekend print editions about changes sweeping the computer processing industry.  

The Times story documented a shift underway away from the silicon chips that run microprocessers (Intel’s wheelhouse) and toward “alternative chips” aimed at mimicking the human brain.

The chips, to be deployed as artificial intelligence in a new generation of smart machines, have brought a new category of competitor into the fray, namely, Google and Microsoft.  

Writer Cade Mentz reports:

“This migration could also diminish the power of Intel, the longtime giant of chip design and manufacturing, and fundamentally remake the $335 billion a year semiconductor industry that sits at the heart of all things tech, from the data centers that drive the internet to your iPhone to the virtual reality headsets and flying drones of tomorrow.”

Yet according to internal documents obtained by the Oregonian, Intel is unperturbed by the looming changes.

Reporter Mike Rogoway offers a fascinating glimpse of the corporate mindset.

 Far from dialing back expectiations, the company aims to increase its market value by 75 percent over the next five years, to $300 billion, Rogoway writes. He quotes Chief Financial Officer Bob Swan, who spoke during an August meeting at Intel’s Ronler Acres campus in Hillsboro. “That’s what we see as the possibility, or the art of the possible, for the company,” Swan says.

Analysts are responding with various degrees of belief and disbelief.  Will Oregon’s lumbering giant succeed in reinventing itself for a new AI generation? Few old guard tech companies have survived the rapid fire changes marking the evolution of the industry.

Intel’s challenges mirror those facing Oregon’s other major employer, Nike, where layoffs have dealt a tough blow to the corporate image. The company is struggling to adjust to a radically changing retail environment, as well as competition from Adidas and Underarmour.  

The state’s fortunes are inextricably connected to Nike and Intel.  All eyes are watching as changes roil both sectors.