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Home / Business / Radical hedge fund Third Point urges chip manufacturers to explore strategic options, Intel soars 8%

Radical hedge fund Third Point urges chip manufacturers to explore strategic options, Intel soars 8%



File picture: Daniel Loeb, founder of Third Point LLC, participated in a panel discussion during the Alternative Overpass (SALT) conference in Las Vegas, Nevada, May 9, 2012.  REUTERS / Steve Marcus / File Photo
File photo: Loeb, founder of Third Point LLC, participated in a panel discussion during the Skybridge Alternatives conference in Las Vegas

  • Reuters reported that Intel surged 8% on Tuesday after the radical hedge fund Third Point wrote to the chip maker urging it to explore strategic alternatives.
  • Reuters quoted people familiar with the matter as saying that Third Point, run by Daniel Loeb, has accumulated nearly $1
    billion in Intel shares.
  • The letter read: “Intel did not make immediate changes. We are worried that the United States’ access to leading semiconductor supplies will be eroded, forcing the United States to rely more on geopolitical unstable East Asia for its development from PCs to data centers to critical infrastructure. Various products provide power.”.
  • Watch the Intel deal live broadcast here.

According to Reuters, the radical hedge fund Third Point sent a letter to the chip maker on Tuesday, urging it to seek a strategic alternative, and Intel’s stock price soared 8%.

Reuters quoted people familiar with the matter as saying that Third Point, run by billionaire investor Daniel Loeb, has accumulated nearly $1 billion in Intel shares.

According to the letter, Reuters has reviewed it, and Third Point called on Intel Chairman Omar Ishrak (Omar Ishrak) to take immediate action to improve the company’s position as a major supplier of processor chips for personal computers and data centers.

“Intel did not make immediate changes. We worry that the United States’ access to leading semiconductor supplies will be eroded, forcing the United States to rely more on geopolitical unstable East Asia to power everything from PCs to data centers to critical infrastructure. “Said the letter.

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According to “Reuters” report, Third Point believes that Intel’s possible actions include separating chip design from semiconductor manufacturing operations and may include manufacturing joint ventures.

In recent years, Intel has been losing market share to Advanced Micro Devices, and because the company develops its own chips and outsources manufacturing to East Asia, it has lost important customers like Apple.

According to Loeb, Intel’s leading position in microprocessor manufacturing has lost to TSMC and Samsung Electronics.

The letter said that, given that many of Intel’s chip designers have fled in recent years, “because of the immorality of the status quo,” the company has another way to solve Intel’s “human capital management problem”.

Intel responded to Third Point’s letter in a statement and said: “Intel welcomes all investors’ opinions on improving shareholder value. In this spirit, we look forward to working with Third Point LLC on their efforts to achieve this goal. Ideas to collaborate.”

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