(Bloomberg) — Intel Corp. Chief Executive Officer Pat Gelsinger, facing investor skepticism about his turnaround bid, said the company now expects to reach a key technological milestone sooner than planned, helping the storied chipmaker regain its edge.
Under Gelsinger, Intel has been working to restore its leadership in semiconductor process technology — an effort that requires the company to retool factories. The CEO has previously promised investors that Intel could reach that point by 2025.
“Now we think late 2024,” he said in an interview with Bloomberg Television.
The remarks follow a weaker-than-expected forecast from Intel that sent its shares on their worst slide in months Friday. A slowdown in personal-computer sales is weighing on its outlook, but some on Wall Street also see Gelsinger’s comeback plan as an uphill fight. He’s spending tens of billions of dollars to get Intel back on track and expand into new markets, a push that includes new factories in the U.S. and Europe.
Intel, the largest producer of computer processors, dominated the chip industry for decades and was synonymous with Silicon Valley innovation. That was based on a foundation of having the most advanced production. How chips are made is crucial to improving their ability to store and hold information, how efficient they are and how costly.
Under Gelsinger’s predecessors, Intel allowed that lead to slip and companies such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. overtook it. Gelsinger, who started his career at Intel before leaving to run VMware Inc., returned to the chipmaker last year and pledged to restore its position.
But it’s been a challenging job so far. Intel shares fell as much as much as 6.7% to $43.69 on Friday, their biggest intraday decline since Jan. 27. Even before the slide, the stock was down about 19% over the past 12 months.
Gelsinger reiterated his belief Friday that the second half of 2022 will be a period of accelerating demand and orders.
The $550 billion semiconductor industry has struggled to produce enough chips to meet global demand over the past year, hampering manufacturing of everything from cars to iPhones. The production shortfall will likely drag on into 2024, Gelsinger said, repeating earlier predictions.
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