Intel’s Pearl Harbor Moment

There is a lot of talk about where Intel went wrong, the latest is missing AI, but people seem to forget one of the more defining blunders in the history of Intel. In April of 2012 Kirk Skaugen, the new general manager of Intel’s client PC group, moderated a Q&A with Mark Bohr, a 33+ year Intel fellow, and Brad Heaney, the Ivy Bridge program manager (22nm). All very accomplished people.

“Being an integrated device manufacturer really helps us solve the problems dealing with devices this small and complex,” Bohr said “the foundries and fabless companies won’t be able to follow where Intel is going.”

This is monopolistic thinking and it was the beginning of the end for Intel. To me this was Intel’s Pearl Harbor moment: “I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve,”. The giant being TSMC, Apple, Nvida, AMD, etc… I first wrote about this here: Intel says fabless model collapsing… really? and the rest, as they say, is history.

I met Mark Bohr at a conference after that Q&A. He sat right next to me and was friendly and humble. He is a legend in the semiconductor industry, he was a career Intel employee who worked under “Only the Paranoid Survive” Andy Grove who weaponized semiconductor manufacturing. So how did Mark and Intel miss this one so badly?

For background I asked my AI Super Agent why Intel failed:

Process leadership broke down
Intel’s 10nm program slipped repeatedly as the company set an overly aggressive density target and leaned on complex multi-patterning instead of moving to EUV early. Management later admitted the goals were “too aggressive.” Mass production was pushed out and the cadence unraveled.

Meanwhile, TSMC put EUV into high-volume at 7nm+ in 2019 and ramped 5nm in 2020, giving AMD/Apple a clean runway on leading nodes while Intel was stuck.

The product cadence collapsed
Intel’s classic “tick-tock” rhythm ended in 2016, replaced by a slower “process-architecture-optimization” model just as the 10nm issues hit—compounding stagnation on 14nm refreshes.

Execution stumbles on flagship parts
The Sapphire Rapids Xeon rollout suffered multiple slips and large bug/respins before finally shipping, letting AMD’s Epyc surge in servers. Intel only began to regain footing with the Xeon 6 family (Sierra Forest in June 2024; Granite Rapids later in 2024/2025).

Strategic misses outside the PC/Server core
Intel exited smartphone SoCs in 2016 and sold its 5G modem business to Apple in 2019—ceding mobile. Earlier, the Larrabee discrete-GPU project was cancelled, delaying a credible GPU roadmap.

Security shocks
Spectre/Meltdown and follow-on side-channel issues forced mitigations that dented performance and trust, right in the middle of Intel’s process troubles.

Competitors seized the moment
AMD, fabbed at TSMC, gained steadily in x86 servers and desktops as Intel’s node woes lingered. (Mercury Research data shows AMD’s server unit share around the high-20s% by 2025.) Nvidia came to dominate AI accelerators, shifting the data-center spotlight away from CPU-only roadmaps.

Culture & capital allocation didn’t help
Years of buybacks (tens of billions) and sprawling bets (e.g., Optane later shut down; NAND sold) coincided with underperformance in the core manufacturing mission. In 2024 Intel announced deep cost cuts amid a share-price slump.

Becoming a customer of others’ fabs
As delays mounted, Intel increasingly used TSMC for tiles and products (e.g., Meteor Lake’s GPU tile on TSMC N5; certain HPC tiles), undercutting its historic IDM advantage.

Wrong! These are all symptoms. The root cause of Intel’s failure, in my opinion, was being lulled into complacency by the lack of competition. As I have said many times, being a monopoly is not for the greater good of a company or industry. We have seen this time and time again and, unfortunately, we will see it again. When will we learn? Never it seems.

Today, Intel has its back against the wall and will need to be clever AND innovate. With the recent CEO change and votes of confidence by Softbank and the US Government I have very high hopes. Next we need the top fabless companies to step up and cast a vote of confidence, for the greater good of the semiconductor industry, absolutely.

Lip-Bu Tan, CEO of Intel, said:

“We are very pleased to deepen our relationship with SoftBank, a company that’s at the forefront of so many areas of emerging technology and innovation and shares our commitment to advancing U.S. technology and manufacturing leadership. Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment.”

“As the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., Intel is deeply committed to ensuring the world’s most advanced technologies are American made,” said Lip-Bu Tan, CEO of Intel. “President Trump’s focus on U.S. chip manufacturing is driving historic investments in a vital industry that is integral to the country’s economic and national security. We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership.”

Also Read:

Should the US Government Invest in Intel?

Should Intel be Split in Half?

Making Intel Great Again!

Why I Think Intel 3.0 Will Succeed