Lessons for India from Intel’s downturn
The company that powered the PC revolution is now struggling to keep pace with nimbler rivals like Nvidia and ARM, whose chips are powering everything from artificial intelligence (AI) to smartphones
Silicon Valley thrives on disruption. It’s a place where young upstarts topple established giants, and yesterday’s revolutionaries become today’s dinosaurs. But even in this land of constant change, there’s a sense of melancholy in the air as Intel, the once-unquestioned king of chips, stumbles towards an uncertain future.
Remember those “Intel Inside” stickers plastered on every computer back in the day? They were a badge of honour, a symbol of cutting-edge technology. But times have changed. The company that powered the PC revolution is now struggling to keep pace with nimbler rivals like Nvidia and ARM, whose chips are powering everything from artificial intelligence (AI) to smartphones. How nimble they are was evident from the body language of Jensen Huang, Nvidia’s CEO when he visited Mumbai last month to speak at a summit. Even at a closed-door dinner, it was impossible to get anyplace close to the super-fit, motorcycle jacket wearing Huang. Everyone wanted selfies with him.
Meanwhile, 10,000 miles away, Pat Gelsinger, Intel’s CEO, got ousted by the board. He poured billions into new factories, embraced advanced technologies, and even dared to challenge the dominance of Taiwan Semiconductor Manufacturing Company (TSMC). But it wasn’t enough. Intel’s financial woes deepened, and the board, impatient for a turnaround, showed him the door. Some analysts are convinced Intel will be on the block next.
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At some point, it appeared imminent that Qualcomm (a company that develops advanced technologies to enhance the performance of devices such as tablets and phones) would take over Intel. But that narrative has taken a backseat and Intel’s slow fade into irrelevance is gaining traction. The reason Qualcomm backed off from Intel it seems is because it is wary of the regulatory scrutiny that will follow. Then there is the Herculean task of integrating Intel’s sprawling empire.
“Intel’s biggest problem isn’t just competition,” a seasoned industry analyst confided, “it’s their legacy.” The company, with its massive workforce and sprawling infrastructure, is like a super tanker trying to navigate a narrow canal. Nvidia and ARM, with their leaner operations and laser focus on specific markets, are more like nimble speedboats, able to adapt quickly to the changing currents.
So, what happens if Intel becomes an also-ran? It’s not just about nostalgic ‘Intel Inside’ stickers disappearing. The implications are far-reaching, especially for a country like India with its own burgeoning chipmaking aspirations.
India isn’t just sitting on the sidelines watching this drama unfold. It is already making moves, investing in semiconductor fabrication plants and wooing chip designers from the diaspora of incredibly talented designers across the globe, and launching ambitious initiatives like the National Semiconductor Mission. This mission, with its hefty budget and focus on building a complete semiconductor ecosystem, is a clear signal that India is serious in the long term.
However, let’s be realistic. Building a world-class semiconductor industry is a marathon, not a sprint. It also means navigating complex geopolitical realities and competing with established giants who have a head start.
Consider China, for instance. They’ve poured hundreds of billions of dollars into their semiconductor industry, creating national champions and attracting top talent. They also hold a strategic advantage with their proximity to Taiwan, the global hub of chip manufacturing, raising concerns about potential disruptions in the event of geopolitical tensions.
But this is India’s Sputnik moment. Just as the Soviet Union’s launch of Sputnik galvanized the United States to invest heavily in science and technology, Intel’s decline should be a catalyst for India to double down on its chipmaking ambitions.
India has unique advantages: a vast pool of engineering talent and a thriving software industry. This is the foundation to attract global investment, foster innovation, and create a vibrant semiconductor ecosystem. This is no pipe dream.
Now is the time to move beyond platitudes and embrace a hard-headed, pragmatic approach. All that is needed is to invest strategically, nurture talent, and create a policy environment that encourages innovation and entrepreneurship. India will do well to learn from the successes and failures of others, including Intel, and chart its own course to semiconductor self-sufficiency.
