Third Point, an American activist hedge fund, urged Intel to “think alternatives including the sale of subsidiaries and respond to competitors such as Samsung.” This is because Intel, the world’s largest semiconductor company, quickly delivered the market to Samsung, TSMC, and AMD, and its profits were violated.
On the 29th (local time), CEO Dan Love Thirdpoint sent a letter to Intel’s board of directors and demanded, “Hire a separate investment advisor to find a strategic alternative. Thirdpoint is an activist hedge fund that aggressively buys corporate stocks to secure voting rights and then demands improved governance or increased dividends. Intel shares secured by Third Point are worth $1 billion, 0.5% of the market capitalization ($200 billion). It is reported that they had concentrated on buying Intel stock just before sending the letter.
“Intel made several mistakes, allowing Samsung and TSMC to pursue,” said Love. “In the core computer processor market, AMD has been eroded considerably.”
Love is warning that Intel’s loss of competitiveness could lead to a national security crisis in the United States. “Along with the decline in Intel’s market share, the US government’s access to state-of-the-art semiconductors such as data centers and core infrastructure is weakening.” It is said that more products and services should be provided to large US technology companies such as Amazon, Apple, and Microsoft (MS).
CEO Love asked for a contract with an investment advisor to find a strategic alternative. The alternative, he said, could include disposing of mergers and acquisitions (M&A) companies that in effect failed. In this regard, Reuters reported that Intel had in mind the sale of Altera, a programmable chip (FPGA) manufacturer, acquired by spending $16.7 billion in 2015.
Intel showed poor performance this year due to the delay in its conversion to 7nm (1nm = 1 billionth of a meter), a semiconductor manufacturing microprocessor. IPhone maker Apple and Nvidia, the world’s largest graphics processing unit (GPU) company, joined forces with Taiwanese TSMC, a semiconductor foundry (consignment) company. Microsoft, who has been working with Intel for a long time, is developing its own chip, saying that it will use a semiconductor that it designed by itself. “If our proposal is rejected, Intel’s next board of directors will directly recommend the director,” said Love.
Intel immediately made a statement and said, “We look forward to working with Third Point on ways to increase shareholder value.” On this day, Intel shares closed at $49.39, up 4.93% from the previous day.
New York = Correspondent Cho Jae-gil [email protected]
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