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The year 2025 will likely be remembered as the year politics hit tech hard.
Every week, we have new regulations rolling out in the EU for the better - mostly speaking.
UK is upto their sneaky laws to get into your secure data.
Whereas countless countries are looking to ban everything from AI, to Social Media, to I guess your privacy rights as well.
Without getting too politicking - it is clear that 2025 will mark the start of governments being heavily involved in Big Tech. And I guess for good reason? Some of these companies are larger in economics than most countries of the world, so they do be needing that regulation.
But today’s story is not about regulation, it’s about how one of these big companies is at serious risk, and perhaps government intervention is what saves it?
I am someone who has grown up in the 2010s and most of the computers that I've used in my life, be they laptops or PCs have had the 'intel inside' sticker. Up until recently, Intel has been the undisputed champion in the CPU space, that too for decades.
These days it's becoming hard to find Intel CPUs on many of the computers we use. Gamers these days love Ryzen. AMD EPYC CPUs are also steadily gaining share in the enterprise world. Intel has been the most dominant player in the desktop computers, laptops and data center market. Sadly, that's started to shrink.
Recently we’ve heard about the tens of thousands of people Intel has laid off in just the last two years. We also know what happened with the Intel 13th and 14th gen CPUs and how they caused people to lose trust in Intel's products.
The recent years have been really bad for Intel. It not only lost the CPU edge to its arch-rival AMD but it also lost Apple, a significant client. The vertical integration that was once the company's strength is now haunting it while TSMC outplays its foundries.
It's easier to read through the headlines and think this happened overnight but that's not the case. In-fact, this decline has been brewing for decades. Just like a domino, it took effect blow after blow as it is now presenting itself.
That's why in this article I'll go over some of the major reasons behind Intel's decline and what the future holds for 'Chipzilla' especially when Uncle Sam has decided to pitch in.
CPU Manufacturing and Intel's Moat
How CPUs Are Made
For a refresher, CPUs are chips that are the main processing hubs for a computer. It doesn't matter if you have a PC, laptop, tablet or a smartphone, they all have CPUs inside them that allow for processing of data.
Smaller than your credit card, CPUs are small chips but they are some of the most complex pieces of technology that humans have ever engineered. This small chip is mostly built in three stages, usually by different companies and these are:
Design - This is where a company lays out the architecture of the CPU
Manufacturing - This is where the design is physically implemented using some really advanced machines
Assembly - This is where the final product is packaged and shipped to clientele (usually computer manufacturers)
Companies like AMD and Nvidia, when they 'make' their chips, they just design the chips and then outsource the actual manufacturing to other companies like TSMC.
What Made Intel Special?
So, CPU manufacturing is a 3-stage process where one company creates the design, the other manufactures the design on a silicon wafer and another company does the final assembly of the chip.
The manufacturing part is really crucial because it is done through some of the most advanced and expensive manufacturing processes on Earth. Most of the companies like AMD and Nvidia just outsource this to fabs, which are chip manufacturing factories.
But Intel is different in this because it not only designs its chips but it also manufactures and assembles its chips. Intel has its own fabs which allow it to do the manufacturing process in-house which not only provides a vertical integration for Intel chips but also increases profit margins.
For more than a decade, this vertical integration has worked in Intel’s favor but today it is one of the reasons why Intel is failing.
A mistake in design, manufacturing or the assembly would directly impact the final chip. So, this strategy only works if all parts of the puzzle are in-sync with the other.
Intel's Golden Age
Let's get back to Intel. Back in the 2000s and 2010s, Intel was a formidable force in the CPU market. PCs, Laptops all used Intel CPUs. Smaller players like AMD were almost invisible.
Intel owned the entire chain of CPU manufacturing from design to assembly. On top of that, Intel owned the language for CPU, the x86 ISA. Only two companies: Intel and AMD have a license to the x86_64 architecture because of a cross-licensing agreement.
With the whole manufacturing and design process under its control and the x86 architecture being the de-facto standard for CPUs, Intel was up in the air for most of the time.
Because of the increased marketing efforts back in the 2010s, the Intel i-series branding was the way many people understood CPUs to be. While rival companies like AMD were struggling, Intel was at the top.
Not to mention, It was this time that Intel won Apple, one of the largest computer manufacturers. With the Intel representative’s futuristic clothing at WWDC 2005, Intel wanted to show that it is the future of CPUs.
While these years seem all fine and dandy from this description, these were also the years where long-term stagnation started to spread inside the company. Moore's Law was called dead even though it was not.
The company, which was founded by engineers, one of which devised Moore's Law now had a non-technical CEO who mostly focused on sales, marketing and branding, and although that worked for the time, it was something that would bite Intel in the years to come.
During this time, Intel's strategy started shifting to updating stickers instead of experimenting and innovating with groundbreaking technologies. While others were experimenting with new ideas, Intel was enjoying a little too much.
Intel Misses the Smartphone Train
Back in 2005, Intel's deal with Apple was a victory for Intel. There was no denying the success of Intel. It not only manufactured the Windows PCs but it was now also powering Macintosh and later Macbooks.
Intel enjoyed its success in the desktop PC, laptop and enterprise market which greatly increased after their 2004 deal with Apple. But right around this time, it also made some of the recent history's worst strategic decisions.
The first iPhone that was released in 2007 was a revolutionary product and it was a signal that computers are going to fundamentally change. This didn't catch Intel off-guard which was complacent with its moat in desktop CPUs.
This resulted in Intel not taking the smartphone adoption seriously up until it was too late to catch up. Although Intel later tried to enter into mobile CPUs through its Atom processors, they were a disaster - they were in-efficient, unpopular and too late.
Companies like Samsung and Qualcomm competed and took their share of the smartphone market while Intel lost it. The iPhone and Android shift gave rise to a new generation of computers that not only used different CPUs than Intel but they also used ARM.
Right around this time, a small British company created something that was to haunt Intel in the years to come. ARM created the language that mobile CPUs would use going forward. Pretty early, ARM cemented itself as the architecture of mobile computers like smartphones.
Back in the 90s and early 2000s, it was hard to think of computers not using Intel CPUs but right through the middle of 2000s, the explosive growth in the smartphone space pushed Intel into irrelevance in the smartphone CPU space.
No popular smartphone ever made use of Intel CPUs. Intel was left out in the dust both from their CPU side because of inefficiencies and also their x86 architecture which was replaced by a simpler and more efficient architecture - ARM.
"The world would have been a lot different if we’d done it,” said Paul Otellini, The CEO of Intel in 2013.
Intel later poured billions of dollars into making an iPhone chip but failed to create one. The train had already left and Intel had to sell the smartphone modem business to Apple.