The growth problem has two causes.
The first cause is ARM Holdings (ARMH), which outpaced Intel for years by delivering low-power designs that phone and tablet makers could customize, rather than finished chips.
The second cause is cloud, where companies such as Google (GOOG) and Facebook (FB) have been building their own systems with low-cost commodity chips rather than high-end server chips with high profit margins.
Intel is trying to address both problems, and the Asus deal is positive. But in most growth areas Intel is trying to do things it's not well-known for, such as building finished systems instead of just chips, or creating consumer brands, or pioneering in untried technologies such as the Internet of Things.
Intel's growth strategy is speculative, in other words. Yet it's pushing more than $1 billion a quarter out the door in dividends, and it spent another $2 billion last year buying back its own stock.
Intel is not going broke. It can continue along its current path for some time. But it is rapidly eating its seed corn and needs to show some top-line growth soon if it wants to continue justifying a rising stock price.
At the time of publication the author owned shares of GOOG.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.