Intel's Market Value Falls Below $100 Billion
Intel Corporation (NASDAQ:INTC), once a dominant force in the semiconductor industry, has experienced a significant decline in market value and influence over the past decade. Founded in 1968 by Robert Noyce and Gordon Moore, the company played a vital role in transforming California's Santa Clara Valley into the technology hub now known as Silicon Valley. Intel launched the 4004 in 1971, the world's first commercially produced programmable microprocessor, marking a pivotal moment in semiconductor history that led to the development of CPUs.
Throughout the 1980s and 1990s, Intel solidified its position in the industry with its microprocessors becoming the standard in personal computers. The 8088 microprocessor, introduced in 1981, was selected as the brain of the IBM Personal Computer, heralding the start of the PC era. However, the company's decision to exit the dynamic random-access memory (DRAM) market in 1985, along with subsequent layoffs, marked the beginning of challenges that would continue to affect the company.
Intel's "Intel Inside" marketing campaign in 1991 and the introduction of Pentium microprocessors in 1993 kept the company at the forefront of the industry. In 1999, Intel became one of the first technology companies to be added to the Dow Jones Industrial Average alongside Microsoft. That same year, Nvidia introduced its first GPUs, which would later become crucial in gaming, multimedia, and artificial intelligence markets—segments where Intel maintained its focus on CPUs.
In the early 2000s, during the dot-com bubble, Intel's market capitalization reached a record high of $495 billion. However, by late 2024, the company’s value had fallen below $100 billion. This decline reflects missed opportunities, such as the smartphone boom initiated by Apple's launch of the iPhone in 2007. Intel declined the offer to produce iPhone processors, a decision that allowed its competitors to dominate the mobile market.
The competitive landscape for Intel has further evolved with the increasing rivalry from companies such as AMD (NASDAQ:AMD) and Nvidia. In 2009, amid antitrust investigations, Intel resolved a legal dispute with AMD by paying $1.25 billion. By 2017, Samsung had surpassed Intel to become the largest chipmaker by revenue, and Intel lost its leadership in production technology to TSMC.
Leadership changes indicated Intel's attempts to address these challenges; CEOs Brian Krzanich and Bob Swan focused on diversification and addressing production disruptions, respectively. However, Intel's reluctance to invest in next-generation equipment and productive artificial intelligence technology—evidenced by its rejection of an investment proposal in OpenAI in 2018—further hindered the company, with OpenAI's market value surpassing Intel's by 2024.
Pat Gelsinger took over as CEO in 2021, aiming to revitalize Intel by transforming it into a company that manufactures chips for other firms and announcing plans to invest $20 billion in manufacturing facilities in Arizona. Despite these efforts, Intel's market value continued to decline, falling below AMD's in 2022.
In 2024, Intel announced a $100 billion investment plan to build and expand factories in four U.S. states following federal grants and credits aimed at strengthening U.S. chip production. However, the company was forced to cut 17,500 jobs and suspend dividends as part of a recovery strategy for its struggling manufacturing business.