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I agree. Qualcomm and the rest can own the frontend and get half a nickel in profits per handset shipped, while Intel owns the backend and sells server CPUs by the millions with gross margins of hundreds of dollars per unit and next to nothing in the way of competition.

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Having worked for 1.5 of the companies you mentioned I think there is something to be said for and against each side of that. Intel's margins may be higher, but the volume becomes lower and in semiconductor scale is everything. The cost of plants does not scale well and the cost of developing technology nodes is VAST. That is why you see the majority (all?...and I include Samsung in this) of the ARM design shops going the customer fab route.

The issue for Intel is that they seem to have found an unintentional local optimization point where margins and volume are effectively in sync in a way that prevents them from effectively growing into new sectors. I used to joke that every ARM chip you buy includes the purchase of an Intel Xeon in a data center somewhere, but that is now something less than 10:1 and probably more like 100:1.

Now that IBM has divested from their fabrication capacity almost entirely, and they sold it to a company owned by Abu Dhabi, it will be interesting to see what happens with Intel's government revenue share. I could see them working together very intentionally with Amazon and the NSA on projects. I think the purchase and quasi-customer fabbing of Xilinix may be an attempt to go that direction.

Intel has purchased Altera, not Xilinx.

ah cra, my bad. thank you for the correction

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