Intel needs a new CEO: Cypress Semiconductor founder T.J. Rodgers

T.J. Rodgers, Cypress Semiconductor founder and former CEO, joins 'Squawk Alley' to share this thoughts on what Intel needs to change following Third Point's letter calling for changes at the company. Subscribe to CNBC PRO for access to investor and analyst insights on tech and more: https://cnb.cx/3dIH56N

Third Point, the hedge fund led by Dan Loeb, is urging Intel’s board of directors to hire an investment adviser to explore “strategic alternatives” after the chipmaker lost market share to TSMC, Samsung and AMD.

Among the considerations should be divesting of “failed acquisitions,” Loeb wrote in a letter to Intel’s board on Tuesday. CNBC viewed a copy of the letter. Third Point, known for its activism, recently took a significant stake in Intel worth $1 billion, according to Reuters.

Intel shares rose about 5% after reports of the letter surfaced on Tuesday. Even with Tuesday’s rally, Intel is down 18% in 2020, while AMD, Intel’s top U.S. rival, has almost doubled in value and the S&P 500 has climbed 15%.

“The loss of manufacturing leadership and other missteps have allowed several semiconductor competitors to leverage TSMC’s and Samsung’s process technology prowess and gain significant market share at Intel’s expense,” Loeb wrote. Meanwhile, AMD has eaten away at Intel’s share of its “core PC and data center CPU markets,” he added.

In a statement, Intel said it would work with Third Point on its ideas to increase shareholder value.

“Intel Corporation welcomes input from all investors regarding enhanced shareholder value. In that spirit, we look forward to engaging with Third Point LLC on their ideas towards that goal,” Intel’s statement said.

Intel’s financial results have been hurt in recent quarter by delays in is 7-nanometer chips, enabling AMD to get a dramatic head start with its competitive chips. The processors are key to providing improved computing performance and meeting demands for faster speeds.

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