Hedge fund Third Point urges Intel to explore options to boost position as major chip provider
- Third Point pushes Intel to explore strategic alternatives including whether it should keep chip design and production under one roof
- Intel shares rise 6.1 per cent to US$49.95, the most in more than eight months, on the news
Were it to gain traction, Third Point’s push for changes could lead to a major shake-up at Intel, which has been slow to respond to investor calls to outsource more of its manufacturing capacity. It could also lead to the unwinding of some of its acquisitions, such as the US$16.7 billion purchase of programmable chip maker Altera in 2015.
Third Point chief executive Daniel Loeb wrote to Intel chairman Omar Ishrak calling for immediate action to boost the company’s position as a major provider of processor chips for PCs and data centres. The New York-based fund has amassed a nearly US$1 billion stake in Intel, according to people familiar with the matter.
Intel shares rose 6.1 per cent to US$49.95, the most in more than eight months on the news, giving the company a market value of more than US$200 billion. The stock had declined about 21 per cent this year, compared with a 43 per cent rise in the Nasdaq Composite Index.
Intel’s most urgent task was addressing its “human capital management issue,” as many of its talented chip designers have fled, “demoralised by the status quo,” Loeb wrote in the letter.