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Intel's rise and fall: A timeline of what went wrong
Intel's dramatic decline highlights its struggle to compete in a rapidly evolving tech landscape, as its market value lags giants such as Nvidia and AMD.
Intel has been a dominant player for much of the modern computing age.
Gordon Moore and Robert Noyce founded Intel in 1968. The company's name comes from the phrase "integrated electronics." In the 1980s, Intel established the x86 CPU architecture, which became the standard in consumer and many business applications for several decades. Intel's hardware portfolio spans consumer and enterprise CPUs, memory, storage and networking technologies. The company also develops software that supports its hardware and contributes to open source software development.
In recent years, Intel has faced increasing competition, leading the company to fall from grace. Rival x86 chipmaker AMD has been aggressively challenging Intel's share with its performance gains. Alternative chip architectures, including Arm, have become increasingly popular leading to further erosion of Intel's dominance. GPU maker Nvidia has outpaced Intel in the AI space leading to even further losses.
The market challenges have hit Intel hard. Intel's stock has been steadily declining, dropping by over 50% in 2024 alone. In November 2024, Intel was removed from the Dow Jones Industrial Average and replaced with Nvidia because S&P Global representatives said Nvidia was more representative of the semiconductor industry and Nvidia's share price was higher than Intel's. Then in December 2024, CEO Pat Gelsinger was forced to retire as the company's board of directors looked to reset the ailing company's direction.
The rise of Intel
Intel was not an instant success. Intel's rise was achieved over decades of milestones and innovations that helped the company to succeed.
1971. Intel created its first CPU, the 4004. However, the company was initially more successful with its SRAM and DRAM memory chips.
1981. The biggest early win for Intel came in 1981 when IBM selected Intel's 8088 processor for its PCs.
1982. The 80286 -- commonly referred to as just the '286' -- processor debuted, introducing separate data buses and memory management capabilities.
1985. The 80386, or 386, debuted marking Intel's first production 32-bit architecture chip, with support of 4GB of memory.
1989. The 80486, or i486. was released further advancing Intel's CPU performance. With its integrated features and on-chip cache, it was the first x86 processor to have more than 1 million transistors.
1991. Intel launched its Intel Inside marketing campaign for PCs with its chips, and television commercials became a cultural phenomenon. The public's understanding of CPUs and what was inside a PC was lacking prior to that campaign.
1993. Intel rebranded its processors under the Pentium name.
1998. Intel debuts the Xeon process line for servers.
1999. Intel and Windows maker Microsoft -- commonly referred to as Wintel -- are added to the Dow Jones Industrial Average.
2005. Apple transitions its Macintosh computers from Motorola's PowerPC to Intel's x86 processors, leading to a 15-year partnership.
The decline of Intel
While Intel gained early success in the PC market, its decline was marked by the company's failure to quickly recognize growth and potential new markets.
In the early 2000s, with the early era of mobile computing, Intel had a golden opportunity to get in on the ground floor. Apple asked Intel to help supply chips to power the iPhone in 2007. Then Intel CEO Paul Otellini declined the deal, on the premise that he didn't think the iPhone was going to be a high-volume business. Apple ended up going with an Arm-based chip, and today, Arm dominates the mobile space.
Intel's decline is also a testament to the intense competition in the market. Rival chip makers have been actively aiming at Intel on multiple fronts. In 2017, AMD introduced its Ryzen processors, providing comparable or superior performance to the equivalent Intel chips of the day, albeit at a lower price point.
Chip fabrication has also been an area of weakness for Intel as the company struggled to transition to smaller, more efficient chip designs. This allowed competitors, such as TSMC and Samsung, to effectively challenge Intel in silicon manufacturing capabilities.
The GPU race and how Intel lost
Intel's decline is also directly related to how it missed out on properly developing competitive GPU technology and taking part in the AI revolution. GPUs have become an essential technology in AI accelerators which are the foundation of generative AI.
In the early era of GPUs during the late 1990s, Nvidia as well as ATI -- acquired by AMD in 2006 -- led the market. Intel tried unsuccessfully to build its own GPU technology including the i740 which ultimately was abandoned. Instead, Intel focused on developing integrated graphics capabilities for its processors, which never attracted much attention from gamers who rely on GPUs.
In 2019, Intel acquired Habana Labs for $2 billion to enter the AI accelerator market. The Habana Guadi processors have not kept pace with Nvidia. For example, the Gaudi 3 chip announced in April 2024 did not compare favorably against the leading edge of Nvidia's portfolio. In November 2024, Intel admitted during an earnings call that the Gaudi processor was going to miss the company's revenue targets.
More mistakes and missed opportunities
Intel has made other mistakes and missed opportunities that have hurt the company's position.
Itanium
Itanium was a processor family that debuted in 2001. It developed through a partnership between Intel and Hewlett-Packard and derived from HP's PA-RISC architecture. The original goal was to create a new server architecture that would have positioned Intel for server dominance. The chips, however, did not offer proper x86 compatibility and were ultimately surpassed in the market by x86-64 architecture originally developed by AMD. Intel released the final Itanium processor in 2017.
Failed acquisitions
Intel's acquisition strategy also includes a series of expensive missteps. Despite paying $7.7 billion to acquire security vendor McAfee in 2010, Intel could not successfully integrate the business into Intel in a way that would have benefited the entire organization. Intel spun McAfee out into a separate company in 2016.
In 2017, Intel acquired Mobileye for $15 billion and failed to fully benefit from the technology of mobile innovations into Intel's core technology platform. Mobileye was spun out as its own company in 2022.
Quality control
Intel's struggles extended to its product development and quality control. In 2024, Intel faced multiple class-action lawsuits over instability issues with its 13th and 14th-generation Raptor Lake processors.
OpenAI
One of the biggest missed opportunities was in 2017 when Intel was offered and declined to invest in OpenAI. This deal would have required the AI pioneer to use Intel hardware.
What is the future of Intel and how can it survive?
Though Intel faces multiple challenges it is still a strong technology vendor with options. Analysts contacted by Informa TechTarget provided their thoughts on what Intel should do to survive.
Rollout Intel 18A
The Intel 18A is an underdevelopment initiative from Intel for the next generation of semiconductor technology. The 18A refers to the size of transistors at 1.8 angstroms, or Å, and this smaller transistor size offers more computing performance packed into a chip. The Intel 18A strategy also includes the development of a new architecture known as RibbonFET, or Ribbon Field Effect Transistor, which Intel claims offers more performance per watt than prior chip architecture designs.
"Intel doesn't have any quick and easy solutions," said Raj Joshi, senior vice president of Moody's Ratings. "It needs to execute its Intel 18A process node technology plan and demonstrate it can produce high volumes of wafers cost-effectively on that node. It also needs to execute its product design plans more effectively."
Reassert PC and data center CPU and GPU leadership
Patrick Moorhead, CEO and chief analyst at Moor Insights and Strategy, believes that Intel needs to get back to leadership with PCs, data center CPUs and data center GPUs.
"Intel made strides in PC and data center CPU designs but is still losing market share," Moorhead stated.
Moorhead believes Intel has the right idea with Gaudi in AI data centers, but the hyperscalers have built their own. Amazon, Microsoft, Meta and Google all have their own accelerators. Moorhead noted that for training and inference, the entire market wants high-performance, low-precision bit-rate GPUs.
Improve efficiency
Beyond technology innovation, Moorhead suggests that Intel needs to be more efficient overall.
"It's not just about cutting headcount. It's changing how work gets done," Moorhead said. "Intel needs to beware of cutting too much in sales and marketing or they're going to invite AMD, Qualcomm and Nvidia to take market share."
Build out multiple revenue paths
Olivier Blanchard, practice lead at Futurum's Devices, said Intel's path forward shouldn't focus on correcting past mistakes.
"Unfortunately, Intel can't climb into a time machine and erase any of the decisions that created the challenges it faces today," Blanchard said. For instance, he added that Intel couldn't reboot its GPU business quickly enough to compensate for a decade of misses and failures.
According to Blanchard, Intel needs to create as many paths to revenue growth as possible -- including its fabrication business -- which Intel has the chance to achieve with support from the CHIPS and Science Act funding.
"I also expect that Intel's importance to U.S. national security and broad economic interests will continue to give it access to a wide set of onshoring and chip fab repatriation opportunities," Blanchard said. "Execution is a whole different story, but the opportunity is there."
CEO leadership
Forrester Research analyst Alvin Nguyen says that Intel needs a new CEO to lead the company in the right direction.
In Nguyen's view, Intel needs their new CEO to do the following:
- Develop a new transformation plan that is differentiated from the one from Pat Gelsinger.
- Convince investors about the success of their new transformation plans.
- Change Intel's culture to reverse the negativity from recent issues and layoffs.
- Be a positive influence with stability inside and outside of Intel.
Sean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He has pulled Token Ring, configured NetWare and been known to compile his own Linux kernel. He consults with industry and media organizations on technology issues.
