Today, Bloomberg News announced that its sources indicate that Intel Corp is considering canceling some big projects to deal with its worst financial period in 56 years. Following the bleak economic news and the worst share decline in 40 years, the company is meeting with its investment bankers to discuss the next steps in its battle for survival. Splitting off or listing for sale its Foundry business seems to be a reality. That may not hurt the Hillsboro, Oregon economy, but the company’s free fall has to stop before we can stabilize the situation here.
Last week, this reporter met with an R&D group leader (who spoke with us under the agreement of anonymity) who was waiting for 40-50%% of his group to receive pink slips here in Hillsboro, Oregon. We discussed many of the massive chip maker’s woes, and he had a dim view of the future. Stock prices have plummeted 60% (see the graphs in the news article above), and what was once a coveted career where stock options and splits made thousands rich has become “just a job.”
“We sold all of our jets recently,” he offered, “like that is going to help.”
The discussion then centered more on the company’s long-term prospects and whether Hillsboro, Oregon, and other cities around the country that rely on Intel should prepare for the worst. After all, 15,000 jobs are being cut anytime now, and this town is all in with the company.
“The company will survive, in some form, as it is too big to fail, and the infrastructure and buildings are here, but what that means might be a new normal for our community where growth is not a part of the equation.”
Then we discussed the 9,000-pound gorilla in the room: AI and Robotics! I had to ask him if these two rising technological advancements would threaten our tech jobs, the very thing we gave up thousands of acres of our pristine farmland and the soul of our rural community for. His response was chilling.
“I can say that AI technologies can now write complex codes in minutes that would take an engineer weeks to do. That is happening now. We can most definitely expect job disruptions to continue, and sooner than later.”
That will affect high-level engineers, of whom we have thousands here in Hillsboro. Of course, there will be job retraining and new careers to work building AI systems and supporting robotics. However, the innovation and research needed will require a much smaller human component and fewer jobs.
I asked the internet about job loss in the manufacturing of semiconductors and what the impact will be. This website stated that this is a 100% risk category with a 78% chance of job loss in the near future. https://willrobotstakemyjob.com/semiconductor-processing-technicians
So, we might want to ask the bigger question. Oregon politicians and leaders are licking their chops over new industrial expansions and the CHIPS ACT and its Billions in grant money. Our mayor, State Senator, and some councilors are pushing for expansion all the way to US 26 adjacent to North Plains.
That question is, Why?
Is our community, with 15 Data Centers and another ten or so coming, powering the future of AI and Robotics to our detriment?
Will the thousands of acres of land we covered over for “high-paying jobs” to build the world’s best semiconductors be filled with just maintenance workers who maintain machines that have replaced those jobs?
In that view, our products and services essentially seal the demise of the benefits and jobs that created them. I am no science fiction writer, but isn’t this the sort of world that was predicted? Isn’t this the entire basis for the movie Terminator?
The kids used to joke that Intel Ronler Acres was in fact SKYNET. Silly kids, what were they thinking?
Now, we must all ask ourselves, what were we thinking?
The full effect of AI on jobs is uncertain, but the chip industry is thriving. Intel should also be thriving, but it has been mismanaged. The CEO, the board, are all to blame the condition of the company, and they need to be replaced.
The problem isn’t so much the current CEO, it was the 3 or 4 CEOs before him. Gelsinger inherited a huge mess due to underinvestment that happened prior to his watch. Intel is like a supertanker, it can’t be turned around quickly. Gelsinger seems to be on the right path, but it’s going to take a while. It’s hard to imagine any CEO not struggling with this situation that was a couple of decades in the making.
Pastor/Preacher Zionist Evangelical Pat gave $5000 extra bonus to the Israelis. He squandered last 3+ years in kissing Politicians a$$e$$ instead of focusing internal efficiency and execution! He took $80B revenue company and cut it in half while spending $50B+ on unfunded money on silly projects/Fabs. It all his fault and he needs b fired and let him b a Church Zionist Evangelical Pastor in California!
Is AMD in rearview? Is Nvidia lucky? IFS will not take a single dime from Govt?! All r lies from Preacher Pat!
The problem isn’t so much the current CEO, it was the 3 or 4 CEOs before him. Gelsinger inherited a huge mess due to underinvestment that happened prior to his watch. Intel is like a supertanker, it can’t be turned around quickly. Gelsinger seems to be on the right path, but it’s going to take a while to turn things around. It’s hard to imagine any CEO not struggling with this situation that was a couple of decades in the making.
AI will replace many jobs so if you want us to embrace AI I know a possible way to help us welcome AI rather than be hurt buy it.
If a persons job is replaced by AI then that person receives an income from that from now on. Otherwise how will the economy and the people survive?
That is a point we will all have to deal with. If AI and robotics reach their full potential, too many peolpe will be unemployed. Something will have to be done.
This has already happened inside of these fabs. Wafers are reticles are now transported on conveyor tracks versus people delivering them. Technology always replaces humans… yet we have more jobs.
The realization by Intel’s President and board that they could not navigate this ship comes to late. Intel has already failed and has hit the iceberg. Cutting jobs will not save this company, Intel missed several years of innovation just like blackberry, wang computer’s Digital equipment, tandy etc. The realization is just sinking in. Intel will become a Nokia a smaller company headed to the dieing technology pile.
Technology always replaces humans… yet we have more jobs.
Prediction: 2025-Gelsinger is terminated, 2026-Intel Foundry sold to Raytheon.
Why not Nvidia buying the fabs? Or maybe Apple. Both companies face a large amount of geopolitical risk by having their chips fabbed at TSMC in Taiwan. It’s almost like some kind of shotgun wedding needs to be arranged. Apple’s sitting on $160B they don’t know what to do with. Intel needs about $100B to catch up to TSMC. Nvidia also is rich right now. A Chinese invasion of Taiwan would sink both Apple and Nvidia. Buying up Intel fabs (and expertise) would be good insurance.
nVidia is fabless and uses TSMC. Which is why TSMC has grown with nVidia. Apple is fabless. Google is fabless. AMD is fabless. TSMC is looking to build US fabs and them buying the Arizona fab would probably happen quickly.
Somebody’s got to belly up to the table and run fabs. Everyone can’t be fables.
Your Intel manager contact is right. I’m a software engineer and I’ve been trying out various LLMs over the last year to get a feel for how well they can write code. And the progress they’re making is nothing less than astonishing. At first they could do simple little programs ok. But now they’re able to do much more complex projects. Will they be replacing all software engineers soon – no, but they’ll make many redundant as they increase productivity to a great extent. Stuff that took me a days to do in the past they can do in minutes now, and they’re able to do increasingly complex programming tasks. I’m glad I’m very close to retirement and my house is paid off, because if I were just starting out or mid-career I’d be very worried right now.
The reports from Intel just a day before this, was how hiring Geislingwhatever and pursuing the 3D transistor has been a failure and they needed to move back to planar designs. But that will take years and Billions. All fabs are using the same equipment. A foundry like TSMC could walk in and have the process up and running at signifivantly less time and money. Intel itself would save billions even paying for a foundry to produce. If there us enough interest in buying the fabs I am very confident this will happen.