Intel's Decline: Andy Grove's Sole-Source Bet to a $16.6B Loss and Dow Exit

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Intel was incorporated in Mountain View, California, in 1968 by chemist Gordon Moore and physicist Robert Noyce, two of the Traitorous Eight who had left Fairchild Semiconductor, with investor Arthur Rock. They passed on the name Moore Noyce, which sounded like more noise, chose Integrated Electronics, and bought the Intel trademark from a hotel chain. Their target was memory: in 1970 the 1103 DRAM began replacing magnetic core memory, and by 1972 it was the world's best-selling semiconductor memory chip. Memory profits funded the 4004 microprocessor in 1971. When Japanese makers flooded the market with cheap memory in the early 1980s, Moore and Andy Grove, Intel's third employee, abandoned memory for microprocessors and ended second-sourcing, making Intel the sole source and backing that with multiple fabs.

IBM's 1981 PC used an Intel chip, and the clones from Compaq and others had to pay Intel's prices. The 1991 Intel Inside campaign paid PC makers' ad costs to carry the logo, and the 1994 Pentium FDIV division bug, after a slow initial response and then a no-questions replacement, made Pentium a household name. The hot NetBurst design let AMD gain share until the 2006 Core architecture and Apple's switch to Intel. But Intel passed on the original iPhone, ceded mobile to ARM, missed the GPU shift behind AI and delayed EUV lithography while TSMC went all in. Pat Gelsinger's 2021 IDM 2.0 plan for fabs in Ohio and Germany failed, and in 2024 Intel lost $16.6 billion and cut 15,000 jobs.

• Grove's book was titled Only the Paranoid Survive.
• Intel's chips paired with Microsoft Windows formed the Wintel alliance.
• In November 2024 Nvidia replaced Intel in the Dow Jones Industrial Average, and weeks later Gelsinger was ousted.
• By early 2025 CEO Lip-Bu Tan began 24,000 more layoffs and the Ohio and Germany megafab projects were canceled.
• Intel now relies on a $3.5 billion military chip deal and a federal stake of nearly 10 percent.