Between slowing sales and mounting competition, Intel faces an uncertain future.
Competition among chip design rivals like AMD and Nvidia is heating up, while other chip startups are on the rise. Apple's decision to build its own chips for its computers also cost Intel some business, and now Google is reportedly planning a similar move. Intel has also been impacted by the ongoing chip shortage.
Pat Gelsinger, who joined Intel as CEO earlier this year, has been assembling a new leadership team and making big bets on new technologies and businesses — from manufacturing to open source software.
As Intel looks ahead, analysts say these three technologies will be foundational to Intel's business in the coming years, helping it grow in new areas while maintaining strength in its core products.
Intel is investing over $20 billion in its foundry business
Intel announced in March that it's investing $20 billion into building new chip factories in Arizona to establish a foundry business, with plans to lead chip manufacturing by 2025.
Analysts say Intel has fallen behind companies like Taiwan Semiconductor in chip production capabilities, so Intel will be focused on developing and getting back to a leadership position in manufacturing.
"It's going to be a different company focused on the fundamentals of manufacturing and really just sustaining their market position in the markets they're in right now," Wayne Lam, senior director at CCS Insight, told Insider.
Still, some analysts worry it will take years before this bet pays off. Logan Purk, senior equity research analyst at Edward Jones, told Insider that "while the push to foundry is not without risks, it does potentially put Intel in the good graces of the new administration," which he said is focused on supply chains and increasing domestic chip production.
Intel acquired companies like Mobileye to expand into AI
Intel acquired the self-driving car company Mobileye in 2017, which speaks to its bigger goal of developing AI technologies. The Mobileye acquisition could allow Intel to expand into technologies like sensors, mapping, camera technology, crowdsourcing data for maps, and driving decisions.
All this could give Intel a leg up in chips for AI and autonomous driving, which have "huge potential for growth," says Dan Morgan, trust portfolio senior manager at Synovus.
"This deal will bring under Intel's umbrella not only a much bigger range of the different pieces that go into autonomous driving systems, but also a number of relationships with automakers," Morgan told Insider.
Besides Mobileye, Intel has been expanding into building a wide array of AI chips, including through its acquisition of Nervana in 2016. Intel's approach differs from Nvidia's single focus on GPUs (graphics processing units), which are chips powerful enough to process images and other AI applications.
Intel's x86 are foundational to its business
Finally, analysts say Intel's x86 chips have been and continues to be the bread-and-butter to its business. First introduced in the late 1970s, much of today's technology wouldn't be possible without these chips, as they power PCs, the cloud, cars, and more.
Still, Intel faces fierce competition from companies like Nvidia and AMD. In general, the industry is focusing more on designing chips that use power efficiently and save on costs, Purk said. Companies are also building chips for data storage, 5G, AI, and more – so Intel will have to stay ahead of the industry as it branches into these areas.
"The technology that's fundamental to them is the pure horsepower CPU chips and that's always been what they've been known for," Purk said.
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