Why does Intel seem so pessimistic about its future?
-
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.
Apple probably didn't move the needle, at least in any market Intel was actually in.
Intel's deep woes began around 2016, when TSMC got ahead of them fab-wise and Intel stuck with in-house. Not a little ahead, years ahead and mostly a branding exercise to assert equivalence ("Intel 7" was just 10nm rebranded, and on the current 3nm front, TSMCs 3nm is over 50% more dense than Intel's claimed "Intel 3".).
At roughly the same time AMD did Zen, coming out of a long bad microarchitectural design.
Intel basically invested on trying to branch out in unproven directions rather than focusing on actually salvaging their core business. Intel partners were given huge budgets to try Intel's wacky ideas no one asked for and burdened Intel CPUs with trying to have a built in FPGA or HPC fabric or phase change memory sticks. They thought if they could make a rack of cpu sockets, memory, and I/O that could be freely reassociated they would have a gold mine, despite no one really wanting that (software does fine with traditional setup).
Then to just utterly drive things home, NVIDIA comes and every IT budget is busy throwing every last dollar they have at GPUs with as little as possible spared for enabling components, like CPUs.
-
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.
I don't think they have a datacenter lead anymore, EPYC really cooked them and they haven't been able to really catch back up. It's been a mess since AMD Rome for Intel.
-
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).
Intel is best thought of as two businesses, where their historical dominance in one (actually fabricating semiconductors) protected their dominance in another (designing logic chips), despite not actually being the best at that.
Intel's fabs represented the cutting edge in semiconductor manufacturing, and their superiority in that business almost killed AMD, who just couldn't keep up. Eventually, AMD decided they wouldn't try to keep up with cutting edge semiconductor manufacturing, and spun off their fabs as an independent company called Global Foundries in 2009.
But Intel hit a wall in progressing in semiconductor manufacturing, and made very slow progress with a new type of transistor known as a finFET, with lots of roadblocks and challenges. The biggest delays came around Intel's 10nm process, where they never got yields quite to where they should have been, while other foundries like Samsung and TSMC passed them up. And so their actual CPU business suffered because AMD, now a fabless chip designer, could go all in on TSMC's more advanced processes. Plus because they were fabless, they pioneered advanced packaging for "chiplet" designs where different pieces of silicon could be connected in a way that they acted like a single chip, but where the different components could be small enough that imperfections wouldn't hurt yield as badly, and where they could mix and match the cheap processes and the expensive processes to the part of the "chip" that actually needed the performance and precision.
Meanwhile, Apple was competing with Qualcomm and Samsung in the mobile System on a Chip (SoC) systems for phones, and developed its own silicon expertise. Eventually, they were able to scale up performance (with TSMC's help) to make a competitive laptop chip based on the principles of their mobile chip design (and then eventually desktop chips). That allowed them to stop buying Intel chips, and switch to their own designs, manufactured by TSMC. Qualcomm is also attempting to get into the laptop/small PC market by scaling up their mobile chip designs, also manufactured by TSMC.
Intel can get things right if it catches up with or surpasses TSMC in the next paradigm of semiconductor manufacturing. The transistors are changing from finFET (where TSMC has utter dominance) to GAAFET (where Intel, TSMC, and Samsung are all jockeying for position), and are trying out backside power (where the transistor gates are powered from underneath rather than from the cluttered top side). Intel has basically gone all in on their 18A process, and in a sense it's a bit of a clean slate in their competition with TSMC (and to a lesser degree, Samsung, and a new company out of Japan named Rapidus), and possibly even with Chinese companies like SMIC.
But there are negative external signs. Intel acknowledged that they don't have a lot of outside customers signing up for foundry services, so they're not exactly poaching any clients from TSMC. And if that's happening while TSMC is making absurd profits, that must mean that those potential clients who have seen Intel's tech under NDA might see that Intel is falling further behind from TSMC. At that point, Intel will struggle to compete on logic chips (CPUs against AMD and Apple and maybe Qualcomm, discrete GPUs against AMD and NVIDIA), if they're all just paying TSMC to make the chips for them.
So I don't think all of their layoffs make a ton of sense, but understand that they're really trying to retake the lead on fabrication, with everything else a lesser priority.
-
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.
Well, in the short term that's true, because they won't be allowed to fail. You have to think either the government will get much more involved or all their civilian customers will go away if this continues on, though.
-
Intel is best thought of as two businesses, where their historical dominance in one (actually fabricating semiconductors) protected their dominance in another (designing logic chips), despite not actually being the best at that.
Intel's fabs represented the cutting edge in semiconductor manufacturing, and their superiority in that business almost killed AMD, who just couldn't keep up. Eventually, AMD decided they wouldn't try to keep up with cutting edge semiconductor manufacturing, and spun off their fabs as an independent company called Global Foundries in 2009.
But Intel hit a wall in progressing in semiconductor manufacturing, and made very slow progress with a new type of transistor known as a finFET, with lots of roadblocks and challenges. The biggest delays came around Intel's 10nm process, where they never got yields quite to where they should have been, while other foundries like Samsung and TSMC passed them up. And so their actual CPU business suffered because AMD, now a fabless chip designer, could go all in on TSMC's more advanced processes. Plus because they were fabless, they pioneered advanced packaging for "chiplet" designs where different pieces of silicon could be connected in a way that they acted like a single chip, but where the different components could be small enough that imperfections wouldn't hurt yield as badly, and where they could mix and match the cheap processes and the expensive processes to the part of the "chip" that actually needed the performance and precision.
Meanwhile, Apple was competing with Qualcomm and Samsung in the mobile System on a Chip (SoC) systems for phones, and developed its own silicon expertise. Eventually, they were able to scale up performance (with TSMC's help) to make a competitive laptop chip based on the principles of their mobile chip design (and then eventually desktop chips). That allowed them to stop buying Intel chips, and switch to their own designs, manufactured by TSMC. Qualcomm is also attempting to get into the laptop/small PC market by scaling up their mobile chip designs, also manufactured by TSMC.
Intel can get things right if it catches up with or surpasses TSMC in the next paradigm of semiconductor manufacturing. The transistors are changing from finFET (where TSMC has utter dominance) to GAAFET (where Intel, TSMC, and Samsung are all jockeying for position), and are trying out backside power (where the transistor gates are powered from underneath rather than from the cluttered top side). Intel has basically gone all in on their 18A process, and in a sense it's a bit of a clean slate in their competition with TSMC (and to a lesser degree, Samsung, and a new company out of Japan named Rapidus), and possibly even with Chinese companies like SMIC.
But there are negative external signs. Intel acknowledged that they don't have a lot of outside customers signing up for foundry services, so they're not exactly poaching any clients from TSMC. And if that's happening while TSMC is making absurd profits, that must mean that those potential clients who have seen Intel's tech under NDA might see that Intel is falling further behind from TSMC. At that point, Intel will struggle to compete on logic chips (CPUs against AMD and Apple and maybe Qualcomm, discrete GPUs against AMD and NVIDIA), if they're all just paying TSMC to make the chips for them.
So I don't think all of their layoffs make a ton of sense, but understand that they're really trying to retake the lead on fabrication, with everything else a lesser priority.
Great explanation. Thanks.
-
Intel is best thought of as two businesses, where their historical dominance in one (actually fabricating semiconductors) protected their dominance in another (designing logic chips), despite not actually being the best at that.
Intel's fabs represented the cutting edge in semiconductor manufacturing, and their superiority in that business almost killed AMD, who just couldn't keep up. Eventually, AMD decided they wouldn't try to keep up with cutting edge semiconductor manufacturing, and spun off their fabs as an independent company called Global Foundries in 2009.
But Intel hit a wall in progressing in semiconductor manufacturing, and made very slow progress with a new type of transistor known as a finFET, with lots of roadblocks and challenges. The biggest delays came around Intel's 10nm process, where they never got yields quite to where they should have been, while other foundries like Samsung and TSMC passed them up. And so their actual CPU business suffered because AMD, now a fabless chip designer, could go all in on TSMC's more advanced processes. Plus because they were fabless, they pioneered advanced packaging for "chiplet" designs where different pieces of silicon could be connected in a way that they acted like a single chip, but where the different components could be small enough that imperfections wouldn't hurt yield as badly, and where they could mix and match the cheap processes and the expensive processes to the part of the "chip" that actually needed the performance and precision.
Meanwhile, Apple was competing with Qualcomm and Samsung in the mobile System on a Chip (SoC) systems for phones, and developed its own silicon expertise. Eventually, they were able to scale up performance (with TSMC's help) to make a competitive laptop chip based on the principles of their mobile chip design (and then eventually desktop chips). That allowed them to stop buying Intel chips, and switch to their own designs, manufactured by TSMC. Qualcomm is also attempting to get into the laptop/small PC market by scaling up their mobile chip designs, also manufactured by TSMC.
Intel can get things right if it catches up with or surpasses TSMC in the next paradigm of semiconductor manufacturing. The transistors are changing from finFET (where TSMC has utter dominance) to GAAFET (where Intel, TSMC, and Samsung are all jockeying for position), and are trying out backside power (where the transistor gates are powered from underneath rather than from the cluttered top side). Intel has basically gone all in on their 18A process, and in a sense it's a bit of a clean slate in their competition with TSMC (and to a lesser degree, Samsung, and a new company out of Japan named Rapidus), and possibly even with Chinese companies like SMIC.
But there are negative external signs. Intel acknowledged that they don't have a lot of outside customers signing up for foundry services, so they're not exactly poaching any clients from TSMC. And if that's happening while TSMC is making absurd profits, that must mean that those potential clients who have seen Intel's tech under NDA might see that Intel is falling further behind from TSMC. At that point, Intel will struggle to compete on logic chips (CPUs against AMD and Apple and maybe Qualcomm, discrete GPUs against AMD and NVIDIA), if they're all just paying TSMC to make the chips for them.
So I don't think all of their layoffs make a ton of sense, but understand that they're really trying to retake the lead on fabrication, with everything else a lesser priority.
Thank you for this excellent summary!
-
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.
We'll here's a lecture by Peter Thiel basically saying "competition might be good for society but being a monopoly is good for business". Ghoul says it openly.
-
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).
It's easier to get rich killing a company than doing good business
-
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.
Do you find it strange how with all that considered, Intel is still competitive with AMD?
It's almost like Intel knows it can leapfrog AMD, but it chooses not to because then they would have to compete with their own innovations.
-
Do you find it strange how with all that considered, Intel is still competitive with AMD?
It's almost like Intel knows it can leapfrog AMD, but it chooses not to because then they would have to compete with their own innovations.
What? Intel subsists on its monopoly from the 90s and 2000s. They can't get their fabs to function. They can't keep their power usage down. Their IPC is awful... Dude you have no idea what you're talking about. And to top it Trump and his cronies are trying to force other chip companies to buy a huge stake into Intel to try and save it from going under.
-
What? Intel subsists on its monopoly from the 90s and 2000s. They can't get their fabs to function. They can't keep their power usage down. Their IPC is awful... Dude you have no idea what you're talking about. And to top it Trump and his cronies are trying to force other chip companies to buy a huge stake into Intel to try and save it from going under.
Sorry, I don't take fanboys or fanboyism seriously.
-
Sorry, I don't take fanboys or fanboyism seriously.
Lol ok, bud.
