2021 was a year of change for many. With COVID-19 dragging into its second year, society was dealing with new realities. For the tech industry, this included the reality that schooling, working, and entertaining virtually was a part of life going forward. The tech industry was also set for change with several major acquisitions and management changes within the industry. Two of the most impactful changes came with the changing of the guard at both Intel and Qualcomm. Ironically, these two companies were staunch competitors over the past decade but are now more complimentary than ever before.
Intel’s Sharpens Its Focus
In February 2021, Pat Gelsinger took over the reins as Intel CEO, a job many of us argued he should have many years ago after serving as the company’s first CTO. However, it would appear his experience being CEO at VMWare has broadened not only his experience, but also his view of the industry. Mr. Gelsinger came out of the gates charging. He set out to put Intel back on top in processing and manufacturing leadership. But his aspiration hasn’t stopped there. Mr. Gelsinger also seeks to make Intel a leader in graphics, networking, and other technologies. While Intel is just now emerging with a new and more competitive slate of technologies and products, these were well underway before Mr. Gelsinger took the reins. Mr. Gelsinger has, however, had an impact on the execution and rollout of new products and technologies through changes in both personnel and company culture.
You can see the energy and excitement Mr. Gelsinger has brought to Intel. Under Mr. Gelsinger, we have seen many industry experts and former Intel employees join the company as part of the new management team. Likewise, Mr. Gelsinger immediately started honing Intel’s corporate strategy. The first notable change was the company’s manufacturing strategy referred to as IDM 2.0. Under IDM 2.0, Intel seeks to have a more balanced manufacturing strategy that leverages both in-house and foundry resources, Intel seeks to regain its manufacturing technology leadership, and Intel strives to become one of the semiconductor industry’s leading foundries by leveraging Intel’s leading-edge process and packaging technology, extensive IP portfolio, and new fabs. The company has already announced one greenfield mega manufacturing site in Ohio with two new fabs and two new fabs at its Ocotillo site in Arizona, as well as upgrades and expansion to existing fabs worldwide.
In addition, Intel is prioritizing certain products and technologies, such as graphics, AI, and networking, while maximizing capital and shareholder value, including selling the NAND and SSD business to SK Hynix and the intent to take Mobileye public.
Mr. Gelsinger also pushed for a renewed emphasis on collaborating with customers and the developer community. In terms of collaborating with customers, Intel is open to developing custom products, leveraging other processor architectures besides x86, and even allowing customers to leverage individual aspects of its accumulated manufacturing prowess, including semiconductor manufacturing and backend assembly (packaging) and test. Previously, Intel would never allow a foundry customer to use its packaging technology or facilities unless Intel also fabricated the silicon die. Intel is also supporting a broader semiconductor ecosystem, such as its recent Intel Foundry Service IFS investment in the RIC-V architecture and continued support for the Arm architecture. And in terms of developers, Mr. Gelsinger quickly instituted new developer conferences called Intel Innovation, which is similar to the Intel Developer Forum (IDF) that he initiated as Intel’s CTO several decades ago.
To sum up a current view of Intel, it would be best to describe Intel as a company looking to provide the highest performing computing solutions that will power everything from PCs to the cloud going forward, while being the leader in semiconductor technology. And if you want another example of Mr. Gelsinger’s energy just watch the video of him doing jumping jacks and pushups prior to presenting at the Intel Innovation conference. And coming from someone that has shared the gym with him at 5 am in the morning, I can assure you that this is Mr. Gelsinger. He brings passion and commitment to everything he does.
Qualcomm Grows TAM With New Markets
The other major semiconductor company CEO change was Cristiano Amon becoming CEO of Qualcomm. Having been the President of Qualcomm since 2018, Mr. Amon was a driving force for the company even before becoming CEO. Mr. Amon is very charismatic, and he is extremely excited about technology, which is one reason he has been a prominent spokesman for the company for the past several years. It was clear that Mr. Amon’s energetic and driven personality would also become part of the culture at Qualcomm. As President, Mr. Amon was already laying the groundwork for the new company strategy with the acquisition of processor startup Nuvia in early 2021 to develop custom Arm-compatible cores for future Qualcomm products. The Nuvia founders were the experts that launched Apple’s custom processor and SoC development efforts, and that acquired expertise could help power Qualcomm into new markets well beyond mobile.
As President and CEO, Mr. Amon has also been a proponent of Qualcomm’s expansion into automotive and IoT applications leveraging the company’s low-power, high-performance heterogenous processing, and RF expertise it has gained from being the leader in mobile and wireless. Qualcomm is already the leader in technology platforms (hardware and software) for augmented reality and virtual reality (AV/VR) and for wearable technology like smartwatches and fitness trackers. Qualcomm is also leveraging its expertise to provide AI accelerator for data centers and computing platforms for other embedded/IoT applications, such as edge networking, drones, robotics, city infrastructure, medical systems, and industrial applications.
Additionally, the company is building on its leadership in automotive cellular modems by offering a complete automotive platform called the Digital Chassis, which includes the digital cockpit, infotainment, and ADAS/AV systems. The company has quickly become one of the leading contenders in supplying technology to the automotive market for future automotive platforms. According to Qualcomm, the company is working with every major OEM. In ADAS/AV systems, Qualcomm has announced partnerships with leading OEMs, including BMW, GM, and most recently Ferrari. The expansion into automotive applications is not only an attractive growth market for Qualcomm, but it’s also an area of strong interest for Mr. Amon, a car enthusiast.
To sum up a view of Qualcomm, the company remains committed to being a leader in mobile and wireless technologies, but with everything becoming connected and intelligent, or what Tirias Research likes to call the Intelligence of Things, Qualcomm appears to be at the right place at the right time with the critical technologies to enable the wireless networks, infrastructure, and billions of connected devices.
A Complementary Future
Intel and Qualcomm are both leveraging their expertise and resources to expand into new areas going forward. In addition, both companies have expressed an interest in working together – Qualcomm plans to leverage Intel as a semiconductor foundry partner. But the possibilities go much, much further. If you look at three of the key trends in the market that were apparent at CES in January, Intel and Qualcomm are well positioned both individually and together to address them. These trends include autonomous machines (including cars, drones, robots, etc.), gaming, and virtual environments (aka the metaverse). All three will require AI, all will need some local processing on mobile devices, all will leverage high-speed 5G wireless networks, and all will require high-performance cloud-based processing. Qualcomm is the leader in the power-efficient processing, mobile, and wireless technologies, while Intel is a leader in network and high-performance processing. There are other companies that fit well into these categories that I will be covering in future articles, but it is a bit ironic that these two industry leaders are changing in a complementary way.
Not all company leaders manage change effectively and not all leadership changes are effective. In these two cases, Intel and Qualcomm, the management changes were good for the companies and good for the industry in terms of driving innovation, co-operation, and competition.