Why does Intel seem so pessimistic about its future?
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To set the stage: I've heard the recent news about layoffs with Intel. Before that I read from their new CEO "On training, I think it is too late for us". Lastly there has been some offhand comments (from LTT) that they're preparing to sell the company.
Yet while I have no doubt that they are behind; their revenue is about 55 billion since 2023, down from the high of 78-80ish Billion during the pandemic, but about the same as the plateau leading up to the pandemic 2015-2019.
Maybe i'm naive about the way businesses work; but if your still profitable, and you know you need to "catch up" why lay off people and close sites? Maybe that works for a consumer goods company; if your overhead is too high and your not making a profit: slim down.
However for a company where RND is really where the value is, like Intel, it just doesn't seem to make sense; your not going to get better designs and processes by reducing your experienced staff and letting them go work for the competition. Maybe some restructuring, (in the engineering sense not the euphemism for layoffs).
Semiconductor fab is an industry which takes years and tons of cash to stand up a new product line, so a failure can really set you back a ton. Intel has had a series of false starts and outright failures competing with the entire industry. They can't match TSMC on fabs, they can't match AMD on x86 cpus, they got stomped by ARM in portables/edge, and they can't seem to make a dent in the GPU market. The only place where they have a small market lead is in data center cpus, but they are at serious risk of falling behind that curve if AMD wants to move to a smaller node, or if server grade ARM finally takes off.
Intel got rich on vertically integration and now they are struggling on both the fab and the IP side, which has really broken their traditional business model.
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To set the stage: I've heard the recent news about layoffs with Intel. Before that I read from their new CEO "On training, I think it is too late for us". Lastly there has been some offhand comments (from LTT) that they're preparing to sell the company.
Yet while I have no doubt that they are behind; their revenue is about 55 billion since 2023, down from the high of 78-80ish Billion during the pandemic, but about the same as the plateau leading up to the pandemic 2015-2019.
Maybe i'm naive about the way businesses work; but if your still profitable, and you know you need to "catch up" why lay off people and close sites? Maybe that works for a consumer goods company; if your overhead is too high and your not making a profit: slim down.
However for a company where RND is really where the value is, like Intel, it just doesn't seem to make sense; your not going to get better designs and processes by reducing your experienced staff and letting them go work for the competition. Maybe some restructuring, (in the engineering sense not the euphemism for layoffs).
I think this is not then being pessimistic. It's one of the first cases of a corporation being realistic, rather than pushing the propaganda of success till it shuts down.
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Nvidia ate their lunch and they don't see a way back from it.
AMD too. Epyc is better than Xeon. Intel survives on the good will of integrators.
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I hope they pull through. Not because of any loyalty. I'll buy whatever is providing the best value for performance at the time. But I don't want to see a monopoly in the x86 market.
More likely that this will just kill the x86 market and ARM will fully take over because of those chips' reduced power consumption in comparison.
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From videos I watched, the big issue is them losing their market position. They took a big hit when Apple ditched them and made their own chips. Now they're losing to AMD and Nvidia in the server space. Their newest desktop chips are under-performing. The consumer market is getting more competitive with Qualcomm joining the space and Nvidia/AMD preparing ARM chips. They made a lot of factories for producing chips but it sounds like they're struggling to lock in a major buyer. Now they're ejecting tens of thousands of employees in the next few months because they're hemorrhaging money.
TL;DR they're getting screwed from every front and either it will take them a long time to recover or they're going to be left behind.
Sounds about right. I was a die hard fan of Intel for years. I upgraded my PC this year and I picked AMD for the first time in my life. Looking at the scathing reviews and performance tables, it is an insane choice to pick Intel.
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And why is that?
If you want reliable sources you should look into War Thunder's forum leaks.
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They sat on their monopoly and didn't innovate, got taken over by AMD and still didn't innovate and instead of letting engineers do what engineers do c suite morons and execs took a bad situation and ran the company into the ground all in an effort to keep shareholders happy.
As soon as your engineering company starts taking advice from business instead of engineers, you've lost. See also - Boeing.
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I hope they cling on and make somewhat of a comeback, or carve out a niche market, but I don't feel sorry for them at all. The are guilty of shade monopolistic tactics.
As a nerdy consumer, I wouldn't count Intel out. I remember when their Pentium 4's ran hot and AMD started eating their lunch, then they launched the Core line up and were back on top. They get lazy when they're not challenged.
That being said, historically, they haven't done very well pivoting from their main business. Their GPU line up seems kind of ok but them trying to make mobile chips went nowhere.
Companies seem to have realized there's real benefit to using ARM processors in laptops for the performance and battery life which is a direct threat to intel's business.
So it's intel's ability to create when pressure is applied vs their inability to create products outside of their comfort zone.
I don't count them out but it's a steep climb.
I've got my eye on their stock just in case this looks like it might turn into something like Apple in the 90s.
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Semiconductor fab is an industry which takes years and tons of cash to stand up a new product line, so a failure can really set you back a ton. Intel has had a series of false starts and outright failures competing with the entire industry. They can't match TSMC on fabs, they can't match AMD on x86 cpus, they got stomped by ARM in portables/edge, and they can't seem to make a dent in the GPU market. The only place where they have a small market lead is in data center cpus, but they are at serious risk of falling behind that curve if AMD wants to move to a smaller node, or if server grade ARM finally takes off.
Intel got rich on vertically integration and now they are struggling on both the fab and the IP side, which has really broken their traditional business model.
Plus, they took a bath when they basically had to admit two entire generations of processors had a fatal flaw:
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To set the stage: I've heard the recent news about layoffs with Intel. Before that I read from their new CEO "On training, I think it is too late for us". Lastly there has been some offhand comments (from LTT) that they're preparing to sell the company.
Yet while I have no doubt that they are behind; their revenue is about 55 billion since 2023, down from the high of 78-80ish Billion during the pandemic, but about the same as the plateau leading up to the pandemic 2015-2019.
Maybe i'm naive about the way businesses work; but if your still profitable, and you know you need to "catch up" why lay off people and close sites? Maybe that works for a consumer goods company; if your overhead is too high and your not making a profit: slim down.
However for a company where RND is really where the value is, like Intel, it just doesn't seem to make sense; your not going to get better designs and processes by reducing your experienced staff and letting them go work for the competition. Maybe some restructuring, (in the engineering sense not the euphemism for layoffs).
Because they've witnessed its past?
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As soon as your engineering company starts taking advice from business instead of engineers, you've lost. See also - Boeing.
wrote last edited by [email protected]Are you kidding?
From the perspective of capitalists, Boeing is the fucking dream. They can innovate fuck not at all, they can bury inconvenient data AND the people who know it with impunity, and since they're too big to fail in literally the cronyest capitalist industry on Earth, American War, the government not only won't lift a finger, but will actively print money to give to them to let them keep doing all of the above in perpetuity.
Boeing is the capiteeliest of capitalist success stories. You didn't think modern corporations actually believed their own propaganda about free markets deciding profit and success based on herp derp honest compertition? Thats just the bullshit they drive into kids minds when they can't yet muster questions or concerns to ruin their lives and forge them into wage zombie husks. Capitalists want to win, preferably at the gunpoint of their captured governments, because actually prouducing products/services that people actually want is for suckers.
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Are you kidding?
From the perspective of capitalists, Boeing is the fucking dream. They can innovate fuck not at all, they can bury inconvenient data AND the people who know it with impunity, and since they're too big to fail in literally the cronyest capitalist industry on Earth, American War, the government not only won't lift a finger, but will actively print money to give to them to let them keep doing all of the above in perpetuity.
Boeing is the capiteeliest of capitalist success stories. You didn't think modern corporations actually believed their own propaganda about free markets deciding profit and success based on herp derp honest compertition? Thats just the bullshit they drive into kids minds when they can't yet muster questions or concerns to ruin their lives and forge them into wage zombie husks. Capitalists want to win, preferably at the gunpoint of their captured governments, because actually prouducing products/services that people actually want is for suckers.
You are bouncing on Boeing's dick so hard I can hear the "boeing" from here. Jesus christ.
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Maybe i’m naive about the way businesses work; but if your still profitable, and you know you need to “catch up” why lay off people and close sites?
I don't have any internal knowledge of Intel but I can make some guesses.
There is a 1 to 2 year process pipeline that goes from ideation, to design, to prototyping, to production readiness, to recurring production. If Intel has determined that the chips they have in design and prototyping stage aren't market viable, there's no reason to pass them to the next steps. This means that the teams that follow (production readiness, to recurring production) won't have work for potentially years. So why employ the extremely expensive staff that do those steps for years when they have nothing to do and you just burn money for now output?
Yet while I have no doubt that they are behind; their revenue is about 55 billion since 2023, down from the high of 78-80ish Billion during the pandemic
Business have ways move moving profit and debt around. One way is corporate bonds ( or Commercial Paper). This can give cash infusions up front to build out infrastructure or finance today's design costs knowing that you'll be able to take the profits from the sales of those completed products at a later date, and pay off the debt. Its possible that Intel has taken out this debt, and because they're dumping products currently in development, they won't have any profits to pay off the debt. I don't know if Intel has any of these, but they are not uncommon in large companies.
However for a company where RND is really where the value is, like Intel, it just doesn’t seem to make sense; your not going to get better designs and processes by reducing your experienced staff and letting them go work for the competition.
Sure, but maybe not on all product lines. If you have 10 product lines, and 8 of them are producing products that are barely profitable (or perhaps not profitable at all), you might trim those lines, reducing your headcount to provide more R&D resources to the 2 remaining promising product lines.
wrote last edited by [email protected]So why employ the extremely expensive staff that do those steps for years when they have nothing to do and you just burn money for now output?
Because in an industry as specialized as semiconductors, most of those "expensive staff" are people with 12 to 25 years of industry experience and company specific institutional knowledge.
Once they're gone, it's impossible to replace that knowledge. New hires will never know the same details and tricks, and the old staff are unlikely to come back after being screwed (except for insanely high compensation.) In specialized industries you have to retain the knowledge base through thin times to have any hope of being successful in thick times.
Its a shortsighted move by bean counters looking to make it to the next quarter so they can merge or sell off, and nothing more.
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You are bouncing on Boeing's dick so hard I can hear the "boeing" from here. Jesus christ.
wrote last edited by [email protected]If you want to believe me calling them the peak of capitalism by capitalism's own inhuman metrics is a compliment, knock yourself out.
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If you want reliable sources you should look into War Thunder's forum leaks.
Hey, we aren't discussing military hardware here!
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And why is that?
why would you trust someone who uses his platform to purposely harm the reputation of companies competing with the one he is invested in?
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I hope they cling on and make somewhat of a comeback, or carve out a niche market, but I don't feel sorry for them at all. The are guilty of shade monopolistic tactics.
From what I've heard, the main thing modern Intel really excels at is hardware video encoding.
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why would you trust someone who uses his platform to purposely harm the reputation of companies competing with the one he is invested in?
I am curious about your view. Can you point to anything specific? We all know he made a big investment into Framework and he was a fanboi of that company for a while.
There are some very real constraints around how LTT can review laptops now. Any promotional work (reviews, status updates, etc.) that LTT does for Framework is easily framed as such based on video context.
I am genuinely curious about this and your point of view. Why? I am not a huge fan of deception or otherwise shady practices that would illegally harm competitors.
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As soon as your engineering company starts taking advice from business instead of engineers, you've lost. See also - Boeing.
Patrick Gelsinger was an engineer.
Nvidia is run by a former engineer. I don't know if that's an argument for or against the idea.
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From videos I watched, the big issue is them losing their market position. They took a big hit when Apple ditched them and made their own chips. Now they're losing to AMD and Nvidia in the server space. Their newest desktop chips are under-performing. The consumer market is getting more competitive with Qualcomm joining the space and Nvidia/AMD preparing ARM chips. They made a lot of factories for producing chips but it sounds like they're struggling to lock in a major buyer. Now they're ejecting tens of thousands of employees in the next few months because they're hemorrhaging money.
TL;DR they're getting screwed from every front and either it will take them a long time to recover or they're going to be left behind.
The hit wasn’t Apple leaving them. That was a small part of their business. The failure was getting in on mobile when they had the chance. They could have diversified and they didn’t, so when AMD came to eat their lunch, they had no fallback and now way to catch up.
