What is going wrong for Intel?
economist.com
economist.com
The crazy part is that this is all after how much Intel has benefitted from the CHIPS act (financially, not strategically, as it's too soon for that). They're unable to compete even with unfair advantages funded by the American tax payers.
From everything I've heard and read, Gelsinger is a great CEO and a good person to have steering the ship during this crisis. He's been back 3 years, but a behemoth the size of Intel (with the burden of all the strategic mistakes it made in the Krzanich/Swan era) probably takes a lot longer than that to course correct.
The thing is, it's not in anyone's interest for Intel to fail. There are so few competitors at the top end of the scale that any one dropping out would be catastrophic for the market and the tech/industry. I don't know about the INTC stock price, but I pray that the company finds a way to keep relevant and competitive.
(At the same time, I'm reminded of all the juggernauts of the 70s and 80s and how incredulous it was that they ceased to exist and am reminded of the all too real possibility that this could be the beginning of the end for Intel.)
In countries like South Korea where industrial subsidies have been used successfully this was only the case because governments at the same time enforced export discipline policies, meaning they made subsidies dependent on companies being able to meet export targets which is a big indicator of competitiveness.
Given that the US is turning insular at the same time as its trying to subsidize domestic industry and increasingly putting trade barriers and tariffs up across several industries you basically have the perfect combo for a disaster.
From what I've read they haven't actually received that $8.5B yet. The other thing to consider is that they're they're needing to spend $100B to build fabs that are competitive with TSMC - and they need to do it kind of all at once here because they underinvested in the 15 years prior due to bad management. $8.5B is kind of a drop in the bucket. $100B is a huge amount for a private company to spend - possibly the largest CAPEX ever. And the time from when shovels hit the dirt till the time a fab is in operation is about 5 years.
Meanwhile Apple is over there sitting on $160B in cash wondering what to do with it. And Apple is the one facing huge geopolitical risk if something happens to Taiwan. It seems like a shotgun wedding between Apple and Intel could be beneficial for both.
> they have no interest in working with Intel
They do if they would like to have a safe, domestic supplier insulated from geopolitical instability. Also in the scenario I mention (some sort of merger or acquisition) they'd be owning Intel and driving it in (hopefully) a beneficial direction.
If they had 70,000 employees, their revenue and profits would look great. The question they have to answer is can they do that revenue with 70,000 people, not 130,000.
Their main competition is TSMC which also gets subsidies. Everybody who wants semiconductor manufacturing pays up. CHIPS is the US taking the first step toward getting back in that game. It isn’t an unfair advantage really, it is an attempt to level the playing field.
Is Intel the ideal recipient? Not sure. A pure foundry seems like a better (more strategic) candidate to me. But no US foundry is that competitive, right?
I'm more concerned about how well 18a and beyond is coming on. Also how well is the sales side and client support for this going? I was thinking they were working more with TSMC to learn how this works from a client perspective so they can build something similar.
Regarding AI. Technically speaking isn't the AI hardware largely cut and paste? A much simpler CPU of which there are a few thousand copies. With the expertise they have in RTL design it does not seem that difficult.
That said I do not think that parallel compute of this nature is going to be future of AI, it is too expensive in terms of power. I'm sure a much more efficient structure will be designed in the coming years, e.g. neuromorphic.
This is the problem with our current brand of capitalism. It's only able to look ahead a quarter or two. Some things (like semiconductor fabs) require a huge amount of spending and the payoff doesn't come for about 5 years. And things like fabs are very necessary to keep our economy rolling. Meanwhile the markets want a quick fix and easy payoffs.
The main issue I see for Intel is that they are trying to catch up in multiple areas at the same time against more specialized companies with more resources, and fend of new architectures like ARM.
Look at the segments:
- Foundry: TSMC is way ahead, has the right culture and is better capitalized. Even Samsung is ahead.
- CPU Architecture: Compete with AMD on the x86 side and with Apple, Google and the likes with ARM architectures.
- GPU: Compete against NVIDIA and AMD.
- AI/NPU: Compete with NVIDIA, AMD, Qualcomm,…
All those companies were smaller than Intel in the past, and Intel couldn’t keep their advantage. Now, those companies are ahead and in a better overall position.
Nothing is impossible but I can certainly see why investors are skeptical, especially given Intel‘s track record in the past few years.
Intel stopped being paranoid.
I've never liked Intel since the days when it partnered with AMD to make 'complementary' chips and it broke that agreement leaving AMD to struggle for decades (it's why whenever given the opportunity I've always chosen AMD chips). Who remembers the double-page ads in Electronics and Electronics Design with Intel ads on one page and AMD on the opposite stating that their designs complemented each other? (Seems to me if that partnership had continued then US chip manufacturing may well have unassailable.)
I don't like Intel nor its lousy ethics but it has to succeed as bigger issues are at stake.
But also, as transistors have gotten smaller and designs have gotten more complex, yield, (which was always important) has become a massive problem. Chiplets are the solution, a defect just destroys one chiplet instead of the whole chip. Designs should use more chiplets, the smaller the better.
Intel’s trick of making giant monolithic designs turned into a liability. The smartphone fab, it turns out, is making chips that are perfectly fine for desktops and servers if you jam enough in one package. Epyc was the writing on the wall.
Intel lost something post 2010.
My primary point and strong opinion here is that I don't think the issue is as binary as a decision to prop up intel vs a decision to give up on domestic production. There is a whole world of other possible options.
Particularly since, no matter what, there is no solution to this problem in the short term. Whatever is done, it will take a long time to produce real fruit.
But buying it? That would be OK.
> The problem was that just a few jerks, especially in positions of power or influence, could fuck you up real good.
> Intel had more than its share of them and therefore, everyone at Intel balanced some amount of technical work with some amount of politics work. You had to. Politics was more than the standard “advocate for yourself” stuff; at minimum it was periodically defending yourself against attacks from others who wanted your territory and would try to get your project shut down so they could take it.
> Some people there approached their work with little in way of technological contributions, but a lot of politics. It turned out that that could be a perfectly successful career strategy—undermining others as necessary to maintain and advance your position without ever actually delivering much of substance yourself. Those were the jerks.
From https://pharr.org/matt/blog/2018/04/20/ispc-volta-going-all-...
> As it turns out, some teams would jealously guard their source code, only making binary releases available to other teams at Intel, and only at well-defined delivery points. It was one defense against the jerks.
> Here’s how it went: if you were working on something that others wanted to attack, sometimes they’d take the in-progress version of the system and pick it apart, finding a bunch of examples where it didn’t yet work well, and putting together an argument that your thing was in terrible shape wasn’t working, and thus should be canceled.
> And sometimes that sort of tactic actually worked; management was shockingly receptive to this sort of hysteria. Maybe it was that they were too far away from the technology to be able to evaluate the arguments on their merits, or maybe again it was an appreciation for gladiatorial combat as decision making process.
> The best case scenario was that the your team would have to spend a lot of time convincing management that they were actually on track and that things were fine. The easier thing was to just not share your code in the first place.
From https://pharr.org/matt/blog/2018/04/22/ispc-volta-first-resu...
I feel this doesn't happen well enough within corporate societies which tend to be much more vicious and hostile in their own realm compared to the outside world. There is a lot of content out there on org building, leadership and what not but I've not come across anything which addresses this fundamental issue. What kind of structures do you need to build to incentivise high degrees of cooperation and discourage unhealthy competition? What would the evolution in terms of next generation of org structures look like?
There is A0, A1, B0, C0, C1, C2, D0, and E0-E5 which is the current production stepping.12 total revisions. Why test before getting it back from the fab!
The lesson learnt for me is that's about time to REALLY give up keeping the old mainframe + dumb terminal paradigms to came back to the desktop one simply telling the GAFAM: "you are done, your business model can't keep up" and financing a good revolution.
Intel in the past have done something nice with the Ultrabook design, it's about time to care of pure desktops.
AZ does not have a lot of water, and the Colorado Basin treaties expire next year. There are interests from existing holders of water rights, the 7 US states, several Federal agencies (BLM, Army COE) and the international aspect with Mexico.
I assume the negotiations are challenging and at some point, the Feds will step in, to direct water supply to chip fabs, rather than golf courses and almond groves.
They don't seem to care about the recent voltage scandal or any other QA problems Intel may have now. Or that the high end CPUs are better used as space heaters + vacuum cleaners.
Right for the wrong reasons?
I see examples like this and I am more convinced that equity holders must be taxed to death.
Serious though, fuck off
So take the HN advice it's for your own good too.