Intel Corporation Leaves Behind its 'Tick-Tock' Approach

The technology giant is moving towards a new three-step development strategy and moving away from its previous, more successful Tick-Tick Strategy.

Intel Corporation’s ‘Tick-Tock’ strategy has dominated the market for over a decade now despite the fact that during this time period, the technology giant has worked on a number of different chip development methodologies. However, recently the chip maker has decided to say farewell to its ‘tick-tock’ strategy that has always seemed to work for it.

The era of relying on the ‘Tick-tock’ strategy is officially over as the technology organization is moving towards a three step development process which is called Process Architecture Optimization (PAO). This latest shift by the company didn’t come as a surprise to many since last year the company had stated that it was having issues with its 10-nanometer technology because of which it failed to go into production which it had planned to do so initially by the end of the year.

The Tick-Tock strategy basically referred to nodes, in which the new process nodes were known as the ‘ticks’ while the new architectures that were built on these process nodes were known as ‘tocks’. However, in its 10-K filing, the company declared that strategy officially dead. Furthermore, the filing also stated some of company’s future plans which included the introduction of new product families by the chip manufacturing organization.

In the filing, the company mentioned the introduction of ‘Kaby Lake’ which will be the third 14 nanometer product and is expected to have key performance enhancements in comparison to the 6^th generation Intel Core Processor. In addition to that, they are also working on their next-generation process technology which will be a 10 nanometer manufacturing process technology.

Intel Corporation is quite optimistic about its latest development strategy – however it is still too soon to say whether this new strategy will be impactful and will be able to generate the kind of response the company is hoping for it. Furthermore, we are yet to find out if it will be as successful as the initial Tick-Tock Strategy.

On March 21, Intel Stock witnessed a decline of 2% in the pre-market trading as Bernstein downgraded the company’s stock to Underperform from an initial rating of Market Perform. Stacy Rasgon, analyst at Bernstein believes that since the tech organization has not shared its quarter’s results as yet, it might not be ‘out of the woods’ as yet. Furthermore, the analyst also predicts that since the company has failed to live up to its guidance for the first quarter of the current fiscal year and hence has not yet shared anything in the pre-announcement.

The tech giant is supposed to report its financial earnings for the three month period on March 31. The analysts at the Street are hoping for the company to report profit of 50 cents per share and have estimated revenue of $13.95 million.

Intel Corp. Plans to Sell Some Venture Capital Assets

The technology giant has invested millions of dollars since 1991, now its considering selling some of its venture capital assets at a price of $1 billion.

The world’s largest maker of computer component, Intel Corporation is planning on selling its venture capital unit assets which could be worth as much as $1 billion, according to a person familiar with the matter.

The people close to the matter further stated that the technology giant is currently looking for potential buyers for the unit with the help of UBS Group AG. Since the information is presently private, the people who disclosed the news asked not to be named.

This move by the company has come two months after Arvind Sodhani, the president took retirement after a long 35 year period from the tech giant. The retirement came as an abrupt change in the unit due to which the biggest chipmaker in the industry had to restructure its venture capital unit in January.

According to a statement by Intel, the former president was replaced by Wendell Brooks, who was currently the head of mergers and acquisitions at the technology organization. It further added that this move was designed in a way so better investment decisions can be made by the firm.

Presently, the selling move by the company is still at an early stage and is focusing on attracting private equity firms who specialize in the purchase of portfolios that are popularly known as secondaries firms. Furthermore, this sale is likely to create a ripple affect not only for Intel but the entire industry.

Intel Capital was initiated in 1991 and ever since its inception it has invested as much as $11.6 billion in over 1,440 companies expanding through at least 57 countries across of a range of sectors. On 2015, the technology organization invested over $514 million in over 143 companies which its focus on a number of sectors including wearable devices as well as security software.

The Wall Street Journal believes that the company might not go forward with this sale as this move comes as a change in strategy by the current chief executive, Brain Krzanich who was appointed the position in 2013 when the former CEO Paul Otellini got retired. It is believed that under the leadership of Mr. Otellini, the Venture Capital unit flourished and was considered the most active venture investors in the world.

In addition to that many believe that times has change in the tech industry as PCs are being replaced with smartphone devices and cloud computing has become a destructive technology for data centers. This sale, during this transitional period, could allow Intel to use more resources in that growing and key technology areas.

Intel has declined to comment on this move and after the news broke Intel stock went up 51 cents to $31.76.