The metastory here is actually about Intel, Boeing, and most recently, Chrysler. How they each did it is a little different, but they all turned the dial all the way to "short-term profit."
I often wonder whether there's a correlation between the reduction in a company's profitability and quality with its decision to hire cheaper offshore workers, or insourcing cheaper workers from abroad. I wonder if the smart money did any type of internal studies regarding this type of correlation.
Any strategy or tactic option works based on its fit with circumstances. Given that, it’s usually fine details of situation and execution that produce success or failure.
And where to find enough companies reflecting Intel’s situation, without confounding factors, for a survey?
“Correlations” are not the best inputs for business decisions.
But I don’t doubt there would have been lots of consultants ready to manufacture such a survey if Intel had signaled demand…
I don't get why Intel had to scrap 20A and try to go for 18A, making things that much harder for themselves in the process while they're already in a tricky position, especially with speculation and mixed messaging and stuff like this: https://overclock3d.net/news/misc/former-intel-ceo-speaks-ou...
It feels like every delay is pretty bad for their image and the public opinion, though of course I can't quantify it. It would probably be a bit different if they were shipping products: Core Ultra was a bit of a sidegrade in some respects but with better pricing it would actually be a good option. Even their Intel Arc cards had a rough launch but despite that most of the issues have been largely addressed and things are looking up, especially for the pricing that they can pull off and the market segment that they're targetting (like AMD also pulling out from the high end, because they can't compete with Nvidia).
My current CPU is a Ryzen 5 4500, which uses a "7nm" process and which PassMark tells me is smack dab in the middle of everything that's available out there. Something like the Core Ultra 245K would be a very significant improvement, even a lower TDP part would be good, as long as it's priced correctly. Yet, Intel is trying for a moonshot with 18A instead of getting something "good enough" out there and competing on price, while doing that was more or less what let AMD survive for years (e.g. before Ryzen), doing which would probably put them in a more stable position and would let them iterate.
That CMOS fabrication process was intended for a single Intel product, the laptop CPUs Arrow Lake H, which will now be made by TSMC.
The costs for bringing that process good enough for mass production would have never been recovered.
It is much better to channel all resources to improving the fabrication yields of the superior 18A fabrication process, which is intended to be used for many important Intel products, including server CPUs, and also for any external customers they will be able to lure.
While Intel has used a slogan like "5 nodes in 4 years", two of those were actually half nodes, i.e. "Intel 3" is an improved variant of "Intel 4" and "Intel 18A" is an improved variant of "Intel 20A".
It would have been much better for Intel if they would have also skipped "Intel 4", but they were in a hurry to launch Meteor Lake before the end of 2023 and "Intel 3" would not have been ready for mass production by that time, and they were still not convinced that they must completely outsource the fabrication of their CPU chips until they have a competitive fabrication process.
With some difficulties, Intel has succeeded until now to meet all their milestones toward their stated goal of having a competitive fabrication process, i.e. 18A, and competitive CPUs, by the end of 2025.
The main thing that can be criticized about their roadmap is that it had included too many intermediate steps, with not yet competitive fabrication processes and CPUs, which have required nonetheless a lot of development efforts, slowing the progress towards the real goal. Nevertheless, it is likely that most of the intermediate steps have been unavoidable, because without new products for a couple of years their sales would have been even lower and their losses greater.
Only if Pat Gelsinger would have remained CEO until that time (one year from now) it would have been possible to assess whether he has been a bad CEO or a good CEO.
Leading-edge semiconductors is a hell of a business. It requires so, so much investment and time and if you can't comprehensively beat the competition your product is almost worthless.
Companies and governments alike have tried to enter the industry and failed over and over. And even staying in it was a struggle for Intel once the pressure was on.
I'm not sure if or how that will ever change. Unless someone comes up with a complete revolution for chip manufacturing that makes the process far easier and simpler than anything we have today, while keeping close to the same performance - I don't think it will. Or if we move to some completely new technology with no similarities at all to silicon - so that new blood can make significant progress.
Intel's board needs to go. They're not in a bad position, they were the first to take delivery of a high NA EUV lithography machine, their most recent products are really good, and they're seen as a cornerstone of the USA's semiconductor strategy should larger scale war break out (almost a certainty at this point).
If they stay the course they'll be in an amazing position. Especially if China makes a move on Taiwan...
It's possible to turn it around sure, but in practice can they? Every story I've read about Intel indicates they don't pay well. How will they attract talent?
I had a glimmer of hope when Keller joined, but he noped out not long after, concluding that leadership were idiots and telling the board as much, then resigning shortly later.
Whether he was right or not is for the reader to speculate, but he's not exactly known as an unstable hothead, nor unintelligent, so one can at least speculate some real problems existed.
It's hard to completely shake up and revamp an organization so large and entrenched, but it's exactly what they need.
I think if they can deliver 18a in 2025 and it is comparable to the competition they are going to be in a much better position. Intel dominated because their fabs were better. At some point they got complacent and stopped investing. Pat changed that and hopefully it continues. If Intel wants to succeed it has to have a comparable product at a comparable price to TSMC. There is more demand for leading edge chips than supply. Plenty of market share to go around if Intel can figure it out.
>Intel dominated because their fabs were better. At some point they got complacent and stopped investing. Pat changed that and hopefully it continues.
I thought the board wanted to split the company in two, while Pat wanted to invest in the fabs. Now that he's gone, doesn't that mean the board will find someone who agrees with them about spinning off the fab business?
>doesn't that mean the board will find someone who agrees with them about spinning off the fab business?
I dont think that is even possible. Given the money they received from CHIP Act. They could spin off x86 business, but may be not the Fab. My guess is that The board actually want Intel to be itself back in the good old days, leading edge node and selling CPU at a premium. Hence they want to scale down their scale of investment on Fabs and possibly focusing capacity for itself only.
Obviously the board doesn't know much about the current Semi market.
I think this is probably accurate. I think the board is struggling with the amount of financial outlay and the weaker than expected returns. I don’t think Pat or the board thought things would get this bad before they got better. I do think they could have managed public sentiment a bit better. While they have been struggling it would have been smart to have an enthusiast gaming cpu that outclassed AMD even if it they lost money on it. Most of the tech sites that review cpus are enthusiast oriented. I don’t believe things are as dire as they look for Intel.
For national security reasons, the fab side might be too important to fail, and the US government will continue to subsidize them in being 2 years behind TSMC. The x86 business is in a weirder place because switching to the latest TSMC node would be an immediate improvement and its problems are more tractable, but it's less strategically important (another domestic vendor with near drop-in replacements exists), and both datacenter and PC customers are seriously looking at other options.
I think it is conjecture that is what the board wants. I myself have mused on here that is what they want, but I honestly think it would be a huge mistake, especially at this point. I think they are too far invested in this strategy to abandon it now.
>I honestly think it would be a huge mistake, especially at this point. I think they are too far invested in this strategy to abandon it now.
Don't assume any great intelligence on the part of these board members. If all these company-running people were so brilliant, Intel wouldn't be in this mess in the first place.
Executing so well that they’re fabbing basically all of their current products at their biggest competitor TSMC instead of their own fabs? That doesn’t really scream successful execution to me…
As you said, 18A is the last node of that plan, so by now if they were executing well on those nodes they should be fabbing all their products on the Intel 3 and 20A processes but they’re not. In fact they don’t even have a 20A process to use because they cancelled it, so clearly that wasn’t executed well.
Intel made a strategic error in adopting EUV later than Samsung and TSMC, but they've always had good fabs. All the (non-fake) news about 18a seems to point to them being able to deliver in 2025.
This is the biggest thing that gives me some hope. The issue was they were trying to execute on old technology that was never going to scale smaller. This was a huge strategic blunder by leadership, but does not mean that the rank and file cannot execute when given the proper tools.
And that is the big IF. Depending on who you believe 18a is either doomed or right on track. I think if they can launch shipping products that consumers can actually buy on 18a in 2025 it is a huge win. If not, well, Intel is for a lot more pain.
Yes. Many exercise by pla and one is active even now (and the largest one). It is more a question of when. And would USA just sit and watch then. If so, how about the chip … the relocation of talent like physicist under nazi germany may not be done in time.
"Every Thursday I do a 24 hour prayer and fasting day . This week I'd invite you to join me in praying and fasting for the 100K Intel employees as they navigate this difficult period. Intel and its team is of seminal importance to the future of the industry and US".
Sign of a massive process failure in and of itself, no? If the shareholders want to pay someone to pray there are plenty of cheap priests available. He's just manifestly not doing his job.