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Comment by giuliomagnifico | Hacker News Reader

Intel needs better (especially with less energy consumption) chips not lower price. If Intel will lower the price they will have less cash for R&D and this is the trouble for intel now: not much competitive chips. And where are again at the beginning of the circle.

I hope they will make an internal review of their offices/laboratories/whatever, is not a price issue with the chips, is a performance and technical issue.

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Don't assume that increased R&D spending leads to better products and/or reduced time to market, at least quickly.

There are consistent signs of technical decline at Intel, and "reviewing" underperforming units into oblivion is likely to drain away talent and destroy more value faster.

EDIT: other comments point out that Intel is sitting on an awful lot of cash. It can be safely assumed that Intel is spending as much as possibly useful on R&D and that their results are limited by talent and strategic choices, not by cheapness.

The US taxpayer will backstop Intel no matter what, purely because of the fab business.

Intel's profit is double AMD's revenue. Cash flow is not their problem.

Can you elaborate on what exactly their problem is then?

I'm reasonably bullish on intel, but Jobs explained the problem well https://www.youtube.com/watch?v=NlBjNmXvqIM When tech companies become a dominant force in their market they lose their ability to innovate, and it's very hard to change culture once that's happened.

There have been big leadership shakeups at Intel over the past few months (see the CEO change). Long term, if they execute well, they should be back in a good position technically. In the meantime, their only option to offer competitive perf/$ is to lower cost.

AMD managed to recover with a much smaller budget than Intel. I don't think that lower margins for a couple of years will prevent a recovery long term.

Quite sure their bean counters have done the math. Intel like any company aims for max profitability given market conditions - i.e. Intel is only drop prices because it maximizes their profit.

Bean counters are often short-sighted, focusing on quarterly reports to keep shareholders happy.

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