How a Decision by Apple 15 Years Ago Hurts Intel Now

Last month Intel’s stock lost $50 billion in valuation — while the valuation for Taiwan-based TSMC jumped by over 50%.

The former chief of staff to Intel CEO Andrew Grove (and later general manager of Intel China) explains why this moment was 15 years in the making:

Learning curve theory says that the cost of manufacturing a product declines as the volume increases. Manufacturing chips for the whole computer industry gave Intel huge advantages of scale over any other semiconductor manufacturer and resulted in the company becoming the world’s largest chip manufacturer with enviable profit margins.
Chaos theory says that a small change in one state of a system can cause a large change in a later stage. In Intel’s case, this was not getting selected by Apple for its iPhones. Each successive era of computing was 10x the size of the previous era, so while Intel produced hundreds of millions

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