[Column] Lessons from Intel's Restructuring

These days, Intel Korea is on high alert due to restructuring news from its U.S. headquarters. When Intel CEO Pat Gelsinger announced a 15% global workforce reduction, the possibility of an impact on the domestic subsidiary could not be ruled out. An Intel Korea executive said, "A 15% restructuring is not a small matter."

Intel's restructuring contrasts with the recent aggressive talent recruitment by domestic semiconductor companies such as Samsung Electronics and SK Hynix. Samsung Electronics and SK Hynix endured a harsh semiconductor downturn last year. However, they adhered to the principle that steady investment and talent acquisition are necessary to maintain competitiveness even during a recession. As a result, they were able to get through the downturn and regain competitiveness. Samsung plans to start its regular open recruitment process for new employees early next month. SK Hynix will also begin occasional hiring soon. In July, they even announced a large-scale recruitment of new and experienced employees in the triple digits.

The reason Intel, which once dominated the semiconductor industry in the PC era, has been driven to restructuring is simple. It largely stems from missing the timing for new business ventures. Failing to enter the artificial intelligence (AI) business in time caused Intel to fall behind rapidly. As the AI era began, Intel failed to release 'hit products' like SK Hynix's high-bandwidth memory (HBM) semiconductors and also lagged in foundry (semiconductor contract manufacturing).

Intel was also late in the 'chase.' There has been no clear news of CEO changes or organizational restructuring. There is no 'big news' related to orders, advanced process technology, customer deliveries, or yield rates. Intel has only released a roadmap plan to implement technology at a pace similar to TSMC and Samsung Electronics. This contrasts with Samsung Electronics, which acknowledged losing first place to rivals in both AI semiconductors (SK Hynix) and foundry (TSMC) and unusually changed the head of its semiconductor (DS) division in May, a non-personnel season. Samsung Electronics recently showed a changed stance by announcing it would actively supply the 5th generation high-bandwidth memory (HBM) product, HBM3E 8-stack. Samsung Electronics and SK Hynix did not give up on facility investment and research and development (R&D) investment even during the severe performance downturn. They were more desperate than Intel.

The market's view of Intel has turned cold. Intel's stock price has fallen 39% over the past year. Although the company has pulled out the last card of restructuring, doubts remain about its recovery potential. Some say that Intel's bureaucratic organizational culture has taken root, preventing swift investment and innovation decision-making. Voices of reflection are also heard within the organization.

Intel's poor performance at headquarters has resulted in the Korean subsidiary, a small organization of about 200 people, falling within the scope of restructuring. There are reports that work is not progressing smoothly. Employee morale inevitably drops, and the possibility of talent attrition cannot be ruled out. The cost is harsh for a single mistake.

The contrasting images of Intel and Samsung Electronics and SK Hynix clearly illustrate the industry's unpredictable landscape. It is evident that this is a scene for corporate CEOs to ponder deeply.

This content was produced with the assistance of AI translation services.