Over the course of the next five to 10 years, expect dramatic changes in the operating model of the world's biggest chip vendor.
Other numbers support the theory that Intel will be spending more in the
future to further some of the goals identified above, rather than scale
back its investments. Total R&D and marketing, general, and
administrative expenses for 2013 are projected at approximately $18.9
billion, even higher than the $18.2 billion it spent in 2012 and the $16
billion from 2011.
Paul Otellini, president and CEO, defended Intel's spending
decisions for 2013, and noted that the capex would help the company
maintain its manufacturing prowess, giving it the edge it needs to stay
ahead of the competition in the PC segment, as well as in tablets and
smartphones. The high capex will probably be maintained even in 2014 and
2015, according to Intel CFO Stacy Smith.
"The world's leading edge fabs are the single greatest asset that we have," Otellini added during the conference call.
I agree, but I've long been a fan of Intel and its "only the
paranoid survive" investment and managerial mentality. However, for many
others in Intel's public domain, maintaining a strong capex and
operating expenses budget in the face of weakening PC sales may not make
sense, especially since the company is getting clobbered by ARM in the
mobile communications equipment market.
Intel certainly has major challenges, but those who focus on its
failure to make inroads into the ARM-dominated mobile segment need to
take a closer look. If Intel successfully makes the transition I've
outlined above, neither ARM's current success, nor the weakness (today
or in the future) of the PC market will matter a great deal. The
majority of Intel's sales would be independent of each segment, and it
would have fashioned a new business model for what some of today's
embattled IDMs could become -- had they Intel's deep pockets.
Bojaji Ojo is editor in chief of EBN, an EE Times sister site. This article originally appeared on EBN.