Silicon Insider: Intel, Buy Texas Instruments

But there was one crucial difference: Andy Grove had retired. Under Barrett, Intel was still a well-run machine, but -- to the relief of everybody -- it no longer behaved as if its very existence was at stake every single day, as if it was surrounded by enemies, that, to use Grove's famous book title, "Only the paranoid survive." Now when the company made mistakes -- which it continued to do, letting perpetual follower AMD not only catch up, but take the lead, blowing $10 billion on a failed thrust into communications, not recognizing the devastating threat in the Far East from Samsung until it was almost too late -- there was concern and the announcement of new corporate initiatives. But it was nothing like the Grove era, when there would have been heads on poles, rallies calling for employee sacrifice unto death and key customers being dangled out of windows by their ankles. Instead, Intel exhibited something I'd never seen before in the company: fear.

Before he retired, Barrett finally found his inner tough guy. But he never learned to be vicious. And he never learned to be relentless. His successor, Paul Otellini, is a very smart man and a superb executive. But he too has yet to show that he knows how to play for keeps, that he is willing to whip Intel back up on its bloody feet the next time it falls. Because that is what it will take to beat Samsung.

Buying TI Will Take Guts

The first step on Intel's long march back to dominance has to be a move so gutsy that the whole world catches its breath. Perpetual antagonist AMD has already made such a move -- buying a company, ATI, it can barely afford in order to extend its position in high-speed graphics, games, etc. That took guts. If the next recession comes early to the chip industry, AMD is going to be in a bad way. That's an Andy Grove play -- ironically made by the company he hates more than any other.

Now it's Intel's turn to bet the store. Frankly, it has little choice: If Intel continues playing with its current hand, it will be slowly crushed from below (Samsung) and above (AMD). Instead, it needs to change the rules of the game, something Grove did better than anybody. Buy Texas Instruments and it gets industry leadership in DSP. Bolt that together with multicore processors and Intel can steam away from AMD and hit Samsung head on. Intel could own digital communications the way it has own microprocessors.

And, needless to say, in a beautiful alignment of history, the merger would also at last bring together Noyce and Kilby, closing the circle on the first half century of the semiconductor industry.

There is the tiniest of rumors on the street in Silicon Valley that Intel may already be pondering such a move, that it may even have made preliminary contact with TI -- but that Intel is hesitating because the price may be too high.

Well, of course it's too high. This would be one of the biggest mergers in American business history. It reshuffles the deck in tech. It's supposed to make your knees turn to jelly. But this is what great, $40 billion companies do. This is what Andy Grove would do.

Intel, buy Texas Instruments.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

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