Intel’s Exit from DRAM: A Historical Lens on Strategic Choices in 2021

I am singling out Intel because of the recent plans to outsource foundry orders—an opportunity to connect with the news. Advanced semiconductor manufacturing processes and advanced packaging are highly technical, capital-intensive markets. Once you fall behind at a process node, catching up through further investment is often extremely difficult. Intel, once the world leader in manufacturing technology, has begun falling behind TSMC and even Samsung. Should it invest more to catch up in manufacturing, or abandon wafer manufacturing and focus on chip development? This is another major strategic decision point. We can only look back at history to see what Intel considers when facing such choices. ----- Intel had three considerations in deciding whether to cut its most important core business: First, DRAM was not just a source of revenue; it was Intel’s technological core. Whenever the company developed a new technology, it tested it in DRAM first. For a company that revered technology, that mattered enormously. Second, Intel had always believed in a “full product line.” Without a complete range, it thought salespeople would struggle to face customers, meet their needs, and win orders. Third, and perhaps most importantly, was Intel’s pride. Even leaders as tough as Grove did not want to see the core business on which the company was founded close under their leadership. It would feel like an enormous failure. Ultimately, Intel’s decision helped shape a great company. But it cost 7,200 jobs—one-third of Intel’s total workforce at the time—and most of those employees had performed very well. ------ This story brings us back to the present. What decision will Intel’s newly appointed CEO make in 2021??? What changes will traditional travel agencies such as Lion Travel, Lifetour, Richmond Tours, and Phoenix Tours make in 2020–2021 as new travel trends emerge??? If you were a founder whose company was mired in difficulty, facing a hard choice, what would you decide???