For more on the first point, see Intel: something new chips, published in these columns yesterday. Regarding the second point, it should be noted that the US chip designer and manufacturer had revenues of $53bn in 2024, down from $55bn ten years ago.

Its operating result plunged into the red last year, with a loss of almost $4bn, compared with between $22bn and $24bn from 2018 to 2022—a brutal decline. Furthermore, while Intel's gross margin was halved, its R&D budgets underwent constant inflation, reaching $16bn last year.

This inevitably pales in comparison with TSMC, which in 2024 posted revenue of $88bn—triple its level more than ten years ago—and operating profit of $40bn with an R&D budget three times smaller than that of the American group.

Thanks to its scale and technological advantage, the Taiwanese company is able to self-finance investments in its production capacity, which reached $33bn last year. Intel, on the other hand, is far behind, with $24bn in investments and severely negative cash flows for the past three years. Hopes of catching up therefore seem compromised.

Over the ten-year period from 2015 to 2024, the American company's balance sheet went from a net cash position to net debt of $28bn. Five years ago, this amount would not have caused any concern given operating profits of $22bn. But the situation is much more critical today, as this debt was accompanied in 2024 by an operating loss of $4bn, plus $4bn in restructuring costs and $4bn in asset write-downs.

With hindsight, the massive share buybacks throughout the cycle appear to have been ill-advised. Faced with aggressive competition, the $50bn used to buy back shares—at valuations well above current levels—should have been used to defend the group's competitiveness rather than to satisfy the greed of its shareholders.

All is not lost, however. The new CEO, the modest and pragmatic Lip-Bu Tan, has an excellent reputation in the industry. Intel also retains access to capital markets, facilitated by the support of the US federal government.