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Comment by everfrustrated | Hacker News Reader

If true, questions should also be raised about the Board who must have signed off on any conflicts of interest.

> If true …

I don’t know about his investments, but one fact is clear: he was CEO of Cadence Design Systems, which has just pleaded guilty to federal charges for exporting technology to China. That alone should make him ineligible to lead a company with major government contracts.

If he resigns (and he will), the board should go with him.

If I was an Intel shareholder I would be livid.

Can you imagine the look you'd get if it was 1998 and you told me that AMD would have over twice the market capitalization of Intel in the next few decades? In 1998 Intel was 50x larger by market cap than AMD.

It is a company that has been catastrophically mismanaged.

Livid about the problem or livid that they're talking about axing the first CEO in decades that might have a shot at fixing the problems?

Fixing how? His first major act is to fire 20% of employees, refocus on old technology (smt) and deprioritize next gen (14a) process development. This is tantamount to surrendering as a leading foundry.

Fixing the willful ignorance that the market structure today is very different from 20 years ago. Process leadership and volume leadership are tightly coupled, and no integrated chip company will again have volume leadership. Intel's historical margin power built on a combination of monopoly on performance (in some markets) and superior economies of scale, that's not coming back. The question is not whether they can get fabs up and going with process nodes competitive with TSMC, the question is whether doing it actually leads to any kind of success given the costs involved. The key question is what the basis is for competition going forward, and what Intel's strengths are in that context.

To paraphrase, Intel has to go of the notion that for Intel to win AMD and TSMC have to lose. The strategy that follows from that might involve some painful choices.

He came in and trashed everyone's effort then fired them

It played out so smoothly over 3 months it seemed scripted from the start

That's not going to inspire people to step up.

Everything is legal for sure, lawyers were paid to agree. But it feels 100% like an orchestrated short of Intel. A GameStop situation.

I am fucking tired of 60+ year olds setting everyone else up for failure. They've been in charge as the problems came about. They're the problem then.

Boomers and GenX need to get out of the way or get stomped by youth.

> Fixing the willful ignorance that the market structure today is very different from 20 years ago

Indeed. And his first action was to diss their own AI efforts. Because AI is just some niche area that they can ignore.

Just as Battlemage GPUs were getting decent reviews and sold above the MSRP.

The craziest thing is...

Intel could totally try to capture the LLM market 'bottom up' if they wanted to.

As an underdog in the GPU market, all they need to do is start by making cheap boards with lots of VRAM. I'm talking 32GB boards under 1k.

They don't have to be fast. They just have to take these bigger models into VRAM and be fast enough that it's better than dealing with normal CPU+RAM.

That gets them into the market, and then they can follow up with more expensive and 'enterprisey' silicon that is faster for the data centers.

Alas, that's probably too alien a thought for Intel, as they prefer that thick margin...

I like this point. Maybe needs pci4 + large vram + mid line gpu + cheap cpu. The cpu could maybe go scatter/gather/atomics like nics so getting data into and out of gpu is offloaded from the mb cpus doing app work.

This is such an obvious gap in the market for GPUs right now. Nobody wants to make an affordable card with a ton of vram. 32GB isn't even enough. Someone needs to make 48 or 64gb gpus for reasonable prices. Surely GDDR isn't that expensive. AMD and nVidia margins must be insane.

This doesn't seem like a bad idea but let's follow it a few steps. If a key tactic is to take share by shipping LLM-friendly consumer GPUs, one question is would this work. Setting aside the technical issues, they'd certainly sell some. They'd be limited by software, that's still much better on Nvidia, so it would be people with a near-term need for inference at lower cost than Nvidia's going rate. Two things to think about:

1) How might Nvidia etc respond? They've made one-off SKUs for crypto, they could certainly respond quickly with a part that matched on memory but had much better software (meaning, more compatible with tools and better performance. AMD doesn't have the software, but their hardware is find and they could similarly up on-board memory. So Intel would really have to compete on price.

2) Ok, now we've found some 2nd or 3rd place success in a business built on logic fabbed at TSMC and DRAM from Samsung or Micron. If this is the future, why have fabs or any of the associated R&D?

I don't know what the right answers are but maintaining Intel at anything resembling its current size seems like a pretty tough puzzle.

What's your source for that? All I've read is that he recognizes that Intel has not had been selling competitive amounts of product in the core areas where Nvidia and others are making most of their money. You could debate why that is but it's certainly not that they've been ignoring AI.

I like your points a bunch. Now what needs some emphasis is customer satisfaction. Usually in near monopoly situations customers hang on longer than might otherwise be natural. They get disaffected first, and then after another 3-7 years it starts showing itself unflinchingly in financials. Vitually every major company overhaul involves getting back to customers.

You got this wrong. He's de-prioritizing 18a in order to leapfrog to 14a.

Going forward, our investment in Intel 14A will be based on confirmed customer commitments. There are no more blank checks. Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution.

https://newsroom.intel.com/corporate/lip-bu-tan-steps-in-the...

Yes, build fabs based on demand. Don’t spend $100 billion on capacity that’s not needed.

He said he’s only building out 14a capacity as needed. A fab is $20 billion a pop. TSMC has 500 customers to pay for each fab. Intel has Intel. Every new generation is increasingly expensive. Intel needs to find other customers

Why don’t you already understand this??? You are misleading everyone.

I wonder if Six Sigmas has something to do with it...

they became a bit too 'lean'

AMD was in critical trouble just ten years ago - if Zen 1 had failed AMD would have faced bankruptcy. Probably a good reason why they're so behind on the software side.

So AMD going from that to 2-3x intel's market cap is just... not quite as impressive as Apple's turnaround, but certainly in that direction.

If Tan resigns I suspect only way Pat would come back is with an entirely new board, so either way it's likely the board is done.

How effective would Gelsinger be at returning after the then previous CEO took the company in a totally different path and practically trashed Gelsinger’s original plan?

> How effective would Gelsinger be

Effective at what? Intel’s done, it’s on the Boeing trajectory, it’s just about grabbing what you can as the ship goes down.

I highly doubt the US government will let Intel sink. I think one way or another they will bail them, either by emergency funds or through government contracts, and keep the lights on until they turn things around. For the same reasons they didn’t let Boeing die out.

> For the same reasons they didn’t let Boeing die out.

Right — so that extends the time window for pillaging, and means that you can raid future taxpayer money, not just current assets. But there’s still no “turn around,” it’s just different flavors of getting paid massively to go down with the ship.

The Board is a disgrace. For all his fault, Gelsinger had Intel at least on a path back, yes, it's going to take a lot of money because the past two decades have been missed opportunities.

And not only did the Board not do their proper due diligence on Tan, but just let him toss Gelsinger's plan out? Shareholders should sue every one of them.

Intel board members:

Frank Yeary, managing member Darwin capital advisors

James Goetz, partner Sequoia Capital

Andrea Goldsmith, dean of engineering Princeton University

Alyssa Henry, former square CEO

Eric Meurice, former CEO ASML

Barbara Novick, cofounder BlackRock

Steve Sanghi, CEO microchip

Gregory Smith, former CFO Boeing company

Stacy Smith, chair of Autodesk

Dion Weisler, former CEO HP

There are a lot of people that should not be on the board of a semiconductor company.

"Should not be" is too harsh, you should have diversity on a board, not only people from that single industry, but maybe you mean "too many". Presumably the investor-appointees have broad experience with many other companies. The type of people who should know how to hire a CEO.

> Presumably the investor-appointees have broad experience with many other companies

Investors have experience "managing" money to themselves. What is controversial about this? It's like saying pilots have experience flying planes. These investors have a lot experience financializing everything about a company.

We know where that leads, and it's not to success ... well, except for the investors with inside information that get out at the right time.

I'll bite.

Autodesk turned into a rent seeking company over a decade ago.

Anyone Ex Boeing is sus, but maybe I'm wrong.

Ex HP CEO is also sus because HP has been slowly circling the drain for the last 20 years.

Depends a lot on whether the ex-Boeing was pre McDonnell Douglas.

Alyssa Henry is former AWS, and an absolute monster of a leader.

Is being a monster a good or a bad thing?

i was really hoping apple was gonna drop a new chip called the M4 Monster to one up the Ultra

i share rhat to say, i think it's got positive connotations atm

In this slang usage it is a good thing.

Lets not be hasty in condemning him - some "cross pollination" is probably standard in this business. I'm sure there are plenty of Chinese high-tech companies, with CEOs named something like Jack Smith, or Andrew Callahan, that were caught exporting technology to the USA.

Nobody really knows if 18a is a failure or if it was turned into one by deliberate mismanagement. It feels like when Microsoft took over Nokia.

This is entirely on the board. They didn’t know / They didn’t clear first with govt. Either way it’s grossly negligent.

I mean, given that Tom Cotton wrote it, I would be surprised if it were true in any meaningful sense.

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