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Protecting its x86 business by outsourcing & relying on an external supplier for one of its core competencies? They've announced they have contingency plans to

by mythz 6y ago

Protecting its x86 business by outsourcing & relying on an external supplier for one of its core competencies? They've announced they have contingency plans to hedge against further schedule uncertainty (assuming that means using TSMC), but their #1 priority would be to use their own fabs.

klelatti 6y ago
Protecting their x86 server business should be their number 1 priority right now. Customers don't care if the product is manufactured in Intel or TSMC Fabs and the margins will still be more than satisfactory. If the x86 based product falls behind customers have an incentive to move to ARM made on TSMC (Apple being the obvious case in point). In this respect AMD is doing Intel a long term favour by giving firms an x86 fall back.
- mythz 6y ago
  That's fairly short-sighted, a 200B company shouldn't be protecting their core business by handing over their manufacturing reins to effectively create a monopoly that most of the world relies upon for chip manufacturing to make up for a 6 month delay, whilst still incurring the massive fixed costs of their existing fabs. How much more secure would their business be if they're at the mercy of Monopoly supplier with no competition? At least Apple's business is protected as they're a value-added supplier with a near impenetrable network monopoly to prevent competition, but most of Intel's business is chips, conceding manufacturing of them to a single supplier who's now worth nearly 2x Intel, who are big enough to buy ARM or merge with AMD seems unwise for their long-term prospects.
  - klelatti 6y ago
    I didn't say they should hand all their manufacturing to TSMC. Rather, if they have fallen behind on manufacturing (which they have) and decided that they need to access TSMC fabs (which they seem to have) then the priority should be x86 not Ponte Vecchio. Why? Because whilst they are behind on process some firms have an bigger incentive to switch to ARM (eg Apple). Once they have gone to ARM they are much less likely to come back to Intel x86. If they can keep them away from ARM they have a chance of getting them back if/when they get their manufacturing back on track.
    - mythz 6y ago
      Either way conceding manufacturing of their flagship products to their competitor is not without consequence, and shouldn't be their primary preference - it's their contingency plan, as it should be.
      - klelatti 6y ago
        Sure, their primary preference would be to use in-house, but their flagship products today are being built using either an old or a problematic process node and that's a big problem that is not going to get sorted in 6 months. Reading the earnings call I think its reasonably clear that they will be going outside for at least some of their manufacturing - the 'contingency plan' is really around what happens if things get worse.

by mythz 6y ago

klelatti 6y ago

Protecting their x86 server business should be their number 1 priority right now. Customers don't care if the product is manufactured in Intel or TSMC Fabs and the margins will still be more than satisfactory. If the x86 based product falls behind customers have an incentive to move to ARM made on TSMC (Apple being the obvious case in point). In this respect AMD is doing Intel a long term favour by giving firms an x86 fall back.

mythz 6y ago
That's fairly short-sighted, a 200B company shouldn't be protecting their core business by handing over their manufacturing reins to effectively create a monopoly that most of the world relies upon for chip manufacturing to make up for a 6 month delay, whilst still incurring the massive fixed costs of their existing fabs. How much more secure would their business be if they're at the mercy of Monopoly supplier with no competition? At least Apple's business is protected as they're a value-added supplier with a near impenetrable network monopoly to prevent competition, but most of Intel's business is chips, conceding manufacturing of them to a single supplier who's now worth nearly 2x Intel, who are big enough to buy ARM or merge with AMD seems unwise for their long-term prospects.
- klelatti 6y ago
  I didn't say they should hand all their manufacturing to TSMC. Rather, if they have fallen behind on manufacturing (which they have) and decided that they need to access TSMC fabs (which they seem to have) then the priority should be x86 not Ponte Vecchio. Why? Because whilst they are behind on process some firms have an bigger incentive to switch to ARM (eg Apple). Once they have gone to ARM they are much less likely to come back to Intel x86. If they can keep them away from ARM they have a chance of getting them back if/when they get their manufacturing back on track.
  - mythz 6y ago
    Either way conceding manufacturing of their flagship products to their competitor is not without consequence, and shouldn't be their primary preference - it's their contingency plan, as it should be.
    - klelatti 6y ago
      Sure, their primary preference would be to use in-house, but their flagship products today are being built using either an old or a problematic process node and that's a big problem that is not going to get sorted in 6 months. Reading the earnings call I think its reasonably clear that they will be going outside for at least some of their manufacturing - the 'contingency plan' is really around what happens if things get worse.