Throwing in the towel on what?
> A key priority for Intel Foundry is to increase our capital efficiency. <...> Now that we have completed our transition to EUV, it’s time to shift from a period of accelerated investment to a more normalized cadence of node development and a more flexible and efficient capital plan.
That is, they no longer see a way and will no longer try to turn money into real innovation, at least as far as chip manufacturing is concerned.
Which company are you referring to?
I disagree. Intel seems to be as good as either one at chip design, but they are hamstrung by behind behind in manufacturing. They haven't really struggled with performance, its performance per watt and cost that are their problems. Both of those are mostly fab issues.
Lunar Lake, built on TSMC, looks really competitive. Both with Apple, and with AMD (though AMD has had constant struggles with shipping laptop chips to the point they aren't even seriously considered for large scale enterprise deployment).
Intel's problem is they are fat and inefficient.
On the product design side, they have far more employees than their competitors, and they still produce a lower quality product. When you translate that to finances, it means their gross margin is low (lots of employees means high cost).
On the foundry/fab side: Same story. The amount of revenue the fab generates per foundry employee is tiny compared to TSMC - and it's not because Taiwan is cheaper.
Intel was behind TSMC. When Pat became CEO, he set his vision of "5 nodes in 4 years" to get ahead of TSMC. Next year will be the 4th year, and so far that plan is panning out. But doing 5 nodes in 4 years is unprecedented, and the only way they achieved it so quickly is by throwing all kinds of resources at it (e.g. lower than acceptable yields, with Intel eating up the costs of the low yields). This is what he means by "accelerated investment".
So what he is saying in the quote above is: Now that we are near the end of the 4 year period, we need to focus on improving the efficiency of the fab to be competitive with TSMC's prices.