Reuters
- Intel rose 8% on Tuesday after activist hedge fund Third Point sent a letter to the chipmaker urging Reuters to explore strategic alternatives.
- Third point, led by Daniel Loeb, has raised a nearly $ 1 billion stake in Intel, Reuters said, citing people familiar with the matter.
- “Without immediate change at Intel, we fear that America’s access to leading semiconductor supplies will erode, forcing the US to rely more heavily on a geopolitically unstable East Asia to power everything from computers to data centers to critical infrastructure,” reads the letter. .
- Look at Intel trading here.
Intel rose as much as 8% on Tuesday after activist hedge fund Third Point sent a letter to the chipmaker to explore strategic alternatives.
Third Point, led by billionaire investor Daniel Loeb, has amassed a nearly $ 1 billion stake in Intel, Reuters reports, citing people familiar with the matter.
According to the letter, which was reviewed by Reuters, Third Point calls for immediate action by Intel chairman Omar Ishrak to strengthen the company’s position as a major provider of processor chips for computers and data centers.
“Without immediate change at Intel, we fear that America’s access to leading semiconductor supplies will erode, forcing the US to rely more heavily on a geopolitically unstable East Asia to power everything from computers to data centers to critical infrastructure and more. , “said the letter.
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Third Point believes that a possible action for Intel could include the company’s separation of the chip design from its semiconductor manufacturing business, and could include a joint venture in manufacturing, Reuters reports.
In recent years, Intel has lost market share to Advanced Micro Devices and is losing key customers such as Apple while companies develop their own chips themselves and outsource manufacturing to East Asia.
According to Loeb, Intel has lost its leading position in microprocessor manufacturing at Taiwan Semiconductor Manufacturing Co. and Samsung Electronics.
Another way for a turnaround in Intel includes the company addressing its “human capital management issue”, as many of its chip designers have fled in recent years, “demoralized by the status quo”, the letter reads according to Reuters.
In a statement, Intel responded to the letter from Third Point, saying: “Intel Corporation welcomes input from all investors regarding improved shareholder value. In spirit, we look forward to engaging with Third Point LLC on their ideas for the purpose. “
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