Intel's Memory Chip Exit Looks Like a Genius Move
While the past decade or so has been generally positive for the memory chip industry, with muted downturns and periods of soaring prices, the fundamental nature of the industry is once again rearing its ugly head. Memory chips are commodities, and manufacturing them is capital intensive, making booms and busts inevitable. The current bust, which follows an extreme pandemic-era boom, is the worst since the global financial crisis.
Intel (NASDAQ: INTC) faces plenty of its own problems. The company has been losing market share across the board to rival AMD; demand for PCs is falling off a cliff; execution issues in its server chip business have delayed key launches; and a multiyear manufacturing investment cycle is running into a tough macroeconomic environment. In short, Intel has a lot on its plate.
One thing Intel doesn't have to deal with, at least not directly, is the downturn in the memory chip markets. The company has exited its various memory chip businesses over the past few years, and CEO Pat Gelsinger is adamant about staying out for good. "I never want to be in memory, you see I'm doing everything I can to exit our memory businesses in that regard," Gelsinger said in an interview earlier this year.
Source Fool.com
