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Is there good coverage of how Intel became so uncompetitive? My instinct is to say this is just the natural result of the presence of MBAs who are trained to fo

by nxc18 6y ago

Is there good coverage of how Intel became so uncompetitive? My instinct is to say this is just the natural result of the presence of MBAs who are trained to focus _exclusively_ on this quarter's results so ignore R&D investment and also shit on employees by doing gimmicks like hotdesking to pinch pennies. I'm willing to bet my intuition is wrong, especially given my extremely deep bias against MBAs and 'this quarter' thinking. Any great sources on the full story?

DylanBohlender 6y ago
Here are a couple good articles explaining it. https://www.extremetech.com/extreme/227720-how-intel-lost-10-billion-and-the-mobile-market https://www.extremetech.com/extreme/227720-how-intel-lost-10... https://semiwiki.com/semiconductor-manufacturers/intel/289196-murphys-law-vs-moores-law-how-intel-lost-its-dominance-in-the-computer-industry/ https://semiwiki.com/semiconductor-manufacturers/intel/28919... The TL;DR is that Intel has always been a vertically integrated shop (meaning that they usually fab and design their own chips), and that is starting to bite them because pure-play foundries are improving their tech at a faster rate. Intel has been unable to keep up with process advancements in their foundries, and that has led to pure-play foundries like TSMC taking massive market share. As chips get smaller and smaller, Intel has failed to keep up. They can only do 10nm for their mobile stuff and 14nm for their desktop stuff, whereas fabs like TSMC have been in 7nm territory for a while now and are moving into 5nm territory.
- avmich 6y ago
  > The TL;DR is that Intel has always been a vertically integrated shop (meaning that they usually fab and design their own chips), and that is starting to bite them because pure-play foundries are improving their tech at a faster rate. Are you saying that vertically integrated companies are inherently disadvantaged because pure-play companies have a bigger list of orders and can spend more on evolving technology? There is advantage to be vertically integrated, namely a better global optimization across domains, like between design and manufacturing. Would be interesting to know why it's not enough - if it's always not enough. If not always, then this particular case needs more reasons.
  - simonh 6y ago
    I think the point is if TSMC develops a new node they will find customers for it, and they compete with other foundries on node. With intel their foundries only have internal customers, who can only go to their internal foundries. There’s no competitive pressure on the foundries, and if they are ready early that’s wasted capacity. So so capacity and technology planning is based on a common road map to meet the needs of their slowest (er, I mean only) customer.
  - ethbr0 6y ago
    The balance likely comes down to volume. Specifically, total global chip sales. If Intel builds Intel (I believe their contract fabing is a rounding error?), then they're directly tied to Intel chip sales. This sets up a potential death spiral. Intel misses a process node deadline, Intel's products are uncompetitive, Intel sales decrease, less demand for Intel fab, less money for Intel fab improvement. Intel can temporarily paper over this by shifting money from other areas of the company, but it's not a good path to be on. Conversely, as you might expect, if Intel sales are increasing then the opposite, virtuous cycle holds. So essentially, Intel's fortune is tied to the Intel_sales : (global_sales / number_of_leading_edge_non-Intel_fabs) ratio. And with regards to that, two huge things happened in the marketplace recently: (1) mobile chip sales explosion, (2) GlobalFoundries exiting leading process race. If Intel hadn't been screwed by a process engineering miss, longer term trends would still have hit them hard.
    - CountSessine 6y ago
      This is the case with every foundry, though. It’s the reason GloFo isn’t competitive anymore, for example. What’s more interesting is the physics reason that they tripped up the last generation - what did TSMC do right that Intel did wrong? What bets were made? Which ones paid off?
      - Pet_Ant 6y ago
        I believe the issue was that Intel was leaning harder on EUV trying to make it and burying the competition instead of a more cautious approach by TSMC. Zen 3 is finally using some EUV layers whereas I believe Intel already wanted to use EUV heavily in their "10"nm process.
- ckemere 6y ago
  Just skimming the first article, the TL;DR that I took away is that TSMC can get revenue from their old foundry nodes for much longer than Intel can. So the issue is not how fast TSMC improves, but more that Intel has to invest proportionally much more to keep up.
  - dragontamer 6y ago
    Note: the I/O chip on AMD Zen 2 / Zen 3 is a 14nm GloFo chip. Only the CPU-cores ("Zepplin" maybe, or whatever they call them now) are 7nm TSMC. So AMD's strategy also leads to lower fabrication costs: because they can make a far cheaper 14nm chip to handle the slower portions of I/O (talking to RAM, or PCIe), while the expensive 7nm parts of TSMC are used only for the cores / L1 cache / L2 cache / L3 cache.
    - zinekeller 6y ago
      Small nitpick: if I remeber correctly, AMD now uses 12nm process from GloFo now instead of 14nm (due to PCIe 4 requirements).
      - dragontamer 6y ago
        If so, it hasn't changed since Zen 2. IIRC, AMD is on record saying that Zen2 / Zen3 have the same I/O chip, and that only the 7nm stuff is changing. Zen 2 has PCIe 4, so you could very well be correct.
    - Teever 6y ago
      Is there any indication that Intel will move to this chiplet design? It seems like it's a no brainer and it's been proven to work by AMD. What's keeping Intel from adopting this same practice? is it IP?
      - dragontamer 6y ago
        Intel has a competitor to chiplets, called EMIB, based off its Altera purchase. EMIB is pretty cool, but has only been deployed in a small number of situations so far (There was a Xeon + FPGA chip Intel made. There was the hybrid Intel+AMD chip, and finally the new big.LITTLE clone chip that Intel merged an Icelake + Atom core together). I don't know why Intel hasn't invested more heavily into EMIB, Foveros, and other advanced-packaging technologies... but Intel is clearly working on it. Intel can do it, they just haven't decided to do so yet. They have the tech for sure. Its simply a matter of priorities. Its not so much that Intel "isn't" investing into it, its arguable that Intel just hasn't invested "enough" into it. AMD went all in: they literally bet their entire company on advanced-packaging, with AMD GPUs using an active interposer with HBM2, and now Zen-chips taking a chiplet strategy. And to be fair: AMD had to do something drastic to turn the tide. We're just at a point where AMD is finally reaping the benefits of a decision they made years ago. -------- If I were to take a guess: Intel was too confident that they could solve 10nm / 7nm (or more specifically: EUV and/or quad patterning), which would have negated the need for advanced packaging. AMD on the other hand, is fabless. They based their designs off of what TSMC was already delivering to Apple. Since TSMC leapfrogged Intel in technology, AMD can now benefit from TSMC (indirectly benefiting from from Apple's investments). Intel's failure bubbled up from the fab level: Without 10nm chips, Intel was unable to keep up with TSMC's performance, and now AMD is advancing. ---- AMD's strategy just works really well for AMD. AMD is forced to keep buying chips from GloFo (which are limited to 14nm or 12nm designs). All of AMD's decisions just lined up marvelously: they fixed a lot of issues with their company by just properly making the right decisions in a lot of little, detailed ways. A happy marriage of tech + business decisions. I dunno if they can keep doing that, it almost feels lucky to me. But they're benefiting for sure. AMD took something that seemed like a downside (the forced purchase of 12nm or 14nm chips, even when 7nm was available), and turned it into a benefit.
tyingq 6y ago
Giving Jim Keller the boot is probably on Intel's list of regrets.
- ethbr0 6y ago
  Chip architecture isn't current Intel's problem, process architecture is. There's some overlap between the 2, but 100% of Intel's current struggles can be chalked up to dysfunction on their process side. Given the lead time of chip arch (2-3 years?), the chip side of the house is arriving at manufacturing start day, and the process and specs they'd been optimizing for just aren't available. Until Intel's process catches up, other parts of the company have limited options. (TSMC!)
  - 013a 6y ago
    Right, and that's my biggest fear. The process side of this industry is in a really scary spot right now. TSMC is killing it. Nvidia is using Samsung to fab the RTX 3xxx chips, and there's some rumblings that low yields are a reason why those are in such short supply (not to mention, whenever Samsung releases a new phone only some regions get the Exynos chips, because historically they couldn't produce enough of them; Samsung used to have a pretty cool relationship with Qualcomm whereby Snapdragons were fabbed with Samsung, but more recently, they've moved to TSMC). On the high performance side, everyone is moving to TSMC. If Samsung and Intel's fabs continue to exhibit issues at these smaller process node sizes, the monoculture is only going to get worse. We need Intel to get their act together, not just because it pushes better design innovation from AMD and Nvidia (not that they need it right now), but because their fabs are a critical, independent part of the software supply chain. They're the last western company with any form of high yield fabrication on high performance chips. At this point, we shouldn't just be worried about Intel's bottom line; we need to start being legitimately worried about national security (both in tactile cyber-warfare terms, and also more nebulous economic terms with regard to western manufacturing).
    - ethbr0 6y ago
      The geopolitical angle is not to be forgotten either. TSMC is majority-based in a country whose land and government is claimed by another, nearby, much larger country. A country willing to leverage international economic options to further that claim. TSMC's global importance has direct implications on the world's appetite for intervening or preemptively selling arms against a hypothetical Taiwan Strait invasion.
jjtheblunt 6y ago
hotdesking?
- nxc18 6y ago
  Several of the engineers I worked with a few years ago left Intel (for the company I work at) after they switched to hotdesking to save money on facilities. Basically the concept was instead of engineers having an assigned office or desk, the office would have a large field of unassigned desks and generic equipment. Every day you would come in, reserve a desk, take any belongings from a locker, and set up shop. At the end of the day, you would tear down, lock up, and leave. It is beautifully efficient from a top-down perspective, but it turns out employees like the consistency of a known work location each day. Its also nice to be able to put up a picture of family, from what I gather. I suspect the cost of personnel replacement dwarfs the saving of n% reduction in desk need.
  - rwmj 6y ago
    The worst part of hot-desking in my experience is you always seem to end up next to some guy from marketing who is on their phone all day, and as a result you get absolutely no thinking time.
    - newen 6y ago
      Same problem comes up with open offices. Some ass from another department constantly talking on the phone 9 to 5. I developed a Pavlovian twitch every time his phone rang.
      - ethbr0 6y ago
        "Corporate Accounts Payable, Nina speaking. Just a moment!" https://m.youtube.com/watch?v=oFwkL1WgD_0 https://m.youtube.com/watch?v=oFwkL1WgD_0
      - djrogers 6y ago
        > Some ass from another department constantly talking on the phone 9 to 5. Dude, that guy's job probably relied on him being on the phone all day - he's just doing it. It's not his fault that you can hear him, it's your office manager/designer. Some of us really do have to spend a huge chunk of our day talking to other people on the phone, zoom, etc. There's n other way to get our jobs done, and if they don't give us private office space to do it in, then we have to do it in the open space they do give us.
noch 6y ago
> Is there good coverage of how Intel became so uncompetitive? François Piednoël, performance architect at Intel for 20 years, recently gave a presentation that covers a lot of the reasons behind Intel's decline in his presentation "How to Fix Intel" https://www.youtube.com/watch?v=fiKjzeLco6c https://www.youtube.com/watch?v=fiKjzeLco6c
- temac 6y ago
  I think he is a little overrated, and the only reason he is that much known is because it is actually rare to see former Intel engineers opening a Youtube channel with some Intel content. His take about how to fix Spectre made completely no sense to me, so either I missed something, or he is actually lacking on some technical subjects... Anyway still some interesting insight about what he saw happened there. The situation can be explained in a very boring way in any case. You had the tick-tock cycle, then Intel 10nm was broken, but they thought not anything they could not fix with one more year of process debugging, maybe 2 worst case. And they had so much advance that they could even have tolerated 3. Except 10nm basically never worked. And the new microarchitectures were designed for it... They switched to thinking what to do with 14+++++++++ far too late, and even then I admit the result is suboptimal. SemiAccurate is... let's say very very opiniated (as usual), to be polite, and I don't think Rocket Lake will be that much a disaster, but also yes Zen 3 is solid, although not that much magical and a bit overpriced for now (but I'm sure AMD will be able to adjust if really needed) The final thing is: Intel had really an insane advance, and medium/high core count is not that much required right now in volume for consumers. I'm not sure about the situation in datacenters, could be more of a problem for Intel. But Intel has a level of market addressing that is insane and far above AMD. So it is not that much a big deal for Intel, at least if they manage to come back on tracks in the coming years. So did Intel became that much uncompetitive? I don't really think so. Enthusiasts are just so a bit too much now that AMD really is competitive. Choosing Zen 2 was still a (often excellent) compromise. Choosing Zen 3 over Intel would be a no-brainer if cheaper (and when you can!), and depending of what you do it can often be the good choice even at the current prices, or at least for some specific models.
skavi 6y ago
Intel never stopped investing a huge amount into R&D.
- deleted 6y ago
  [deleted]
totalZero 6y ago
My perspective is that every process node is so critical that missing the mark on 10nm had far-reaching ramifications. This kind of technology has gargantuan inertia. The entire hardware ecosystem is strongly interconnected between different firms, and each firm's future technology depends strongly on its past execution. Failure to deliver on 10nm not only jeopardized the smooth rollout of the subsequent process node, it also hurt Intel's ability to deliver large quantities of full-featured chips to customers. I don't personally believe that Apple would be going to in-house silicon instead of Intel for its flagship laptops if there were a viable way to avoid doing so. Intel is so hurt right now that I surmise it'd be willing to negotiate a fat discount for a flag-carrying customer, and the loss of Windows functionality is kind of disappointing at the upper end of the market (where some tools are clearly better supported by windows or at least x86).
- solarkraft 6y ago
  AMD seems to be doing well on x86 - they could've gone with them and saved themselves a somewhat painful ecosystem breakage. It's not just Intel's failure. They must think their chips are competitive against AMD's as well (or they're all in on iOS apps on Macs).
  - klelatti 6y ago
    I think its partly their desire to add their own IP (use of Apple Silicon as the name is probably revealing of how they think of the new chips) was probably decisive in making the move from x86. Plus probably still cheaper than any x86 alternative.
    - hakfoo 6y ago
      It's probably also a great way to avoid head-to-head competition. Apple marketing always reminded me of how for decades, Rolls-Royce advertisements never would explicitly say things like the engine horsepower and displacement-- just "ample." Now it will be that much easier to dodge performance questions. "Our machines are not built to run (mainstream software or game), so of course the performance is sketchy in the emulation penalty box. Just run the seven pieces of native MacOS software and it really flies."
graton 6y ago
I think they have lost a lot of their best employees because their pay is not that great. They aimed for paying at the 50th percentile in wages and the top companies come in and can offer double or more their current pay. Doesn't help they switched from large cubes with five-foot high cubicle walls which did a good job on minimizing noise and visual distractions to having cubicle walls with a height of about 3-4 feet high and much smaller. Plus they installed sit-stand desks and you have people stand and make phone calls that can be heard 30 feet away. Doesn't help for concentrating on problems.
- UncleOxidant 6y ago
  Yes on both counts. I was contacted a couple years back about a machine learning contracting gig. When I asked what the hourly rate was the recruiter said $45/hour. I laughed and said that the going rate for that kind of skill set is like $120+/hour. That has not been an isolated incident.
  - icelancer 6y ago
    >> $120+/hour Even this would be a substantial discount for most qualified people.
    - edoceo 6y ago
      I'm not qualified and get that rate
      - bigmattystyles 6y ago
        You would be surprised what you can get just by asking.
    - PragmaticPulp 6y ago
      Given the company, it's usually long-term contracts that more closely resemble full-time employment. The location is also usually outside of the biggest, most expensive cities. $120/hr * 40 hrs/wk * 50 wks/yr = $240K before self-employment taxes and paying for insurance. Ends up being comparable to typical compensation in cities that aren't SF, Seattle, or other top-tier markets. Now if someone was doing more typical ad-hoc freelance work on a project basis, $120/hr might be too low for typical work. However, $90-120/hr as a contractor with a long-term contract and stable pay over 12-18 months is not uncommon. Unless someone has a lot of new, small contracts knocking at their door nonstop, it can make more financial sense to take a $120/hr long-term contract over sporadic $200+/hr work that changes month to month.
deleted 6y ago
[deleted]
hooch 6y ago
I recall Intel intentionally took the foot off the accelerator in the midst of the GFC, and forfeited or skipped some next development to wait things out a while.
klelatti 6y ago
I think we've all taken the ability to reliably introduce process node improvements for granted to some extent. Intel has clearly been caught out by its inability to get 10nm - which I understand was overambitious - to work and pretty much everything else follows on from there. At the same time AMD has been fortunate that TSMC has been able to continue with its node shrinks - supported by demand from and cash generated by high end mobile devices. None of which is to say that Intel has been well run (cough McAfee cough) or that your criticisms aren't valid to some extent.
- hinkley 6y ago
  Are there any industries where high-end manufacturing doesn't subsidize low-end and low-middle products substantially? Are we saying this all started to unravel when most of the money moved to mobile and Intel still, after 20 years of warning shots, didn't have a compelling strategy there?
  - wmf 6y ago
    For Intel I think ~90% of the PC market plus ~90% of the server market provides enough volume to easily cover their R&D. The rest of the industry may have needed to pivot to mobile to fill their fabs but that's not Intel's problem.
    - yourapostasy 6y ago
      Is there an electric generator evolution scenario here Intel should be watching for? Back in the day before the electric grid really caught on, hydro- and coal-powered electric generators could be found in businesses large and small that had needs that went well beyond the limited voltage and amperage requirements of the meager electrified buildings at the time. It made sense for a business to have its own power plant engineering department to just feed and maintain the beasties if the productivity from thirsty electrically-powered machines far outweighed the enormous cost of an in-house power plant, consumables and staffing. As the grid evolved though, this need went away, and only really heavy industry these days exceed the delivery capabilities of the grid will run their own on-site power plant (more often they just try to "peer" co-locate next to a "real" power plant, kind of like HFT's with exchanges). Power plant manufacturing is now a heavily-specialized industry with margins much lower than Intel has become accustomed to. Could the "grid" of the Net, cloud and mobile devices evolve to the point where the existing PC and server markets retreats in relative scale into "heavy industrial" applications like cloud infrastructure, and shift out Intel's cash flow from under them? Under such a scenario, the PC and server markets don't shrink as much as grow dramatically slower on a relative basis to B2C-grade gear and infrastructure that explodes in growth comparatively. Intel will still be plenty profitable if well-run, and still be mighty, but won't grab all the headlines, and evolve into a GE-like "mainstream" business.
Nokinside 6y ago
Let's not forget that four companies entered this latest race in process node tech and two failed. Intel's 10nm and GlobalFoundries 7nm. This is high risk business. Unseen problems that come after pathfinding when big choices have been made may kill the success.
mattlondon 6y ago
Maybe just hubris and greed? Seems like there were years when intel did not have much competition from AMD. Each year the "big news" from intel was their their Celeron/Pentium/iX/whatever was now up to 100MHz faster than last year's (during limited situations where temperatures allow blah blah blah). Or they add some new strange trademarked exotic-sounding technology brand name each year like "The new Intel Celeron/Pentium/iX with..." "Intel MaxT"/"Intel TruEvo/"Intel Cartara"/"Intel Artuga Plus"/"Intel Versuvia"/"Intel Centurior Max"/"Intel T-Xe" that no one really understands but is basically some sort of mundane enterprise feature no one actually cares about that does something for remote wifi management Quick - rush to the store to get a new laptop!!! I totally need an extra 100MHz single-core maximum boost on a 4-core 2Ghz CPU (i.e. 5% max...) with Intel TruStep MagrittePro (TM) technology that does something to the colour gamut of my monitor in certain content creation scenarios.</sarcasm> It strikes me that Intel have been caught napping and resting on their laurels. AMD appear to have come out with a great competitive product and Intel don't seem to have anything to compete with it with because they've been milking the market for the past 5+ years with tiny incremental clock increases and nothing actually "new". They've allowed AMD to eat their lunch. Maybe they've got a "real" new product they've been keeping in reserve that they'll bring to market now and surprise everyone with. Maybe they'll bring out something amazing next year. Who knows. Maybe. Maybe not. Seems like they've blown their lead for now regardless.
somethoughts 6y ago
The interesting one I think about is if the current CEO is basically their version of Steve Ballmer at Microsoft. Not highly loved by tech, media or finance, but basically held the ship together long enough to enable Microsoft to figure out how to transition away from the sinking ship that was Microsoft Windows and into new markets. Basically he just needs to keep it afloat long enough for Intel to be able to find its version of Satya Nadella and Azure to unlock the next leg of growth.
- jbay808 6y ago
  Maybe? Intel is in a high-technology field, where research can take a decade to bear fruit. I hope they're already planting the seeds for that growth today, or else that they have plans that will keep them afloat for a very long time.
  - Filligree 6y ago
    Do you think they'd be able to hang on for a decade without catching up?
    - riffraff 6y ago
      Why wouldn't they? They probably have contracts that last over that whole time frame already, and their revenue is an order of magnitude higher than AMD. They could lose a lot of market share and then come up with something better in the end, like in the Athlon days. Not obvious that it will happen, but not impossible.
- m_mueller 6y ago
  The examples you cite are people with operational excellence that were built up internally over many years. As an outsider I have no trust that Intel still has such talent, it seems they are fully run by bean counters now. Who says it's a Microsoft and not a Kodak? Microsoft had the immeasurable advantage of two big markets cornered for themselves: enterprise software and home computers software. Intel meanwhile is a market leader that is getting outplayed on every market, the only thing in their favor is missing volume by their competitors - that's not an advantage that is going to last long.
formercoder 6y ago
Hi, MBA here, not sure what "training" you're referring to. Certainly nothing I learned in school taught me to focus on quarterly results and ignore R&D. I learned to attempt to push ROIC above WACC in order to ensure firms are generating economic profits, I learned that we probably should capitalize R&D and include it in ROIC to show that it does impact value, among other things
- Torkel 6y ago
  ROIC: return on invested capital WACC: weighted average cost of capital
- jimbob45 6y ago
  I love this website for blindly downvoting an MBA. Proud of y’all. On the other hand, attempting to quantify R&D seems like a fool’s errand. Maybe quantifying between different paths of R&D to see which could pay off more is beneficial but cutting the R&D budget outright because it’s not profitable? Seems like you’re cutting away from your company’s future at that point.
- kelnos 6y ago
  > capitalize R&D That's the problem with "MBA thinking". You can't put a dollar value on R&D. You just can't. Anything you do will be a gross approximation, and because the number is so fuzzy, you'll be encouraged (even subconsciously) to fudge it around to make other things look better, which will undoubtedly lead you to undervalue R&D to the point where it negatively impacts your business, but you have no idea why, because you're solely focused on dollar figures and not what really matters. Y'know, like developing the ability to solve actual customer problems in an exceptional manner. This sort of thing is very difficult to quantify, and any approach that starts from a finance perspective is always going to be sub-optimal at best, but often just flat-out wrong. I see so many people optimizing the things that are quantifiable at the expense of the things that aren't, when the loss of the qualitative things is what's killing their business. MBA types seem to never get this, and the form of your reply is basically a textbook example of that.
  - 6y ago
Devils-Avocado 6y ago
H1B migrant workers building empires inside the company instead of delivering good products.
- tehlike 6y ago
  Hah, likely true.
deepnotderp 6y ago
I grew up in a neighborhood where probably 90% of households had at least one parent working at Intel, including mine. Very simple: Cultural Decay
baloney1 6y ago
The CEO is, literally, one of these MBA types and he has recursively applied this thinking throughout the whole organization.
- k__ 6y ago
  "received a bachelor's degree in business administration from the University at Buffalo School of Management in 1983 and his MBA from Binghamton University in 1985." "January 31, 2019, Swan transitioned from his role as CFO and interim CEO" They got what they paid for, I guess...
  - gotfork 6y ago
    To be fair, most of the 10 nm problems were already in place when BK was still the CEO.
    - justicezyx 6y ago
      He is the manifestation of the problem then.
  - deleted 6y ago
    [deleted]
- ekianjo 6y ago
  Most CEO are MBAs.
  - dwheeler 6y ago
    A CEO who has only a non-technical education (such as an MBA) is VERY unusual for hardware or software companies that are successful. Often the CEO of this kind of company has at least some technical education, and usually the CEO has lots of it. After all, most of the decisions in such firms will have a technology component to them. A few examples: * Lisa Su (CEO of Advanced Micro Devices (AMD)): BS, MS, and PhD in Electrical Engineering from MIT, and is a fellow of IEEE * Jensen Huang (CEO and founder of NVIDIA): BS in electrical engineering from Oregon State University, master's degree in electrical engineering from Stanford University * C.C. Wei (CEO of TSMC): Ph.D. in Electrical Engineering from Yale University * Simon Segars (CEO ARM): Bachelor of Engineering degree in electronic engineering at U of Sussex, Master of Science degree from the School of Computer Science at the University of Manchester * Sundar Pichai (Alphabet/Google CEO): Has an MBA, but also has an M.S. from Stanford University in materials science and engineering * Eric Schmidt (former Google CEO): BS in Engineering, M.S. degree for designing and implementing a network, and PhD degree in EECS, with a dissertation about the problems of managing distributed software development and tools for solving these problems * Jeff Bezos (Amazon CEO): Bachelor of Science in Engineering (BSE) in electrical engineering and computer science from Princeton * Mark Zuckerburg (Facebook CEO): In Harvard studied Psychology and Computer Science (did not earn a degree, but did study it for a few years and implemented the first version of Facebook). * Tim Cook (Apple CEO): MBA from Duke University and a Bachelor of Science degree in Industrial Engineering from Auburn University. * Satya Narayana Nadella (Microsoft CEO): Bachelor's in electrical engineering from the Manipal Institute of Technology in Karnataka; M.S. in computer science at the University of Wisconsin–Milwaukee; MBA from the University of Chicago Booth School of Business * Reed Hastings (Netflix CEO): Bachelor of Arts degree in Mathematics (Bowdoin College), MS Computer Science (Stanford University) I'm sure there are more examples, but I think that amply demonstrates my point. The only other example I found of a no-tech CEO leading a tech company was Safra Catz (Oracle CEO), who has a bachelor of arts and a J.D. (Law School). My search wasn't exhaustive, but it was illuminating. Now let's compare this to Bob Swan (Intel CEO), who received a bachelor's degree in business administration from the University at Buffalo School of Management in 1983 and his MBA from Binghamton University in 1985. No tech at all. Maybe Mr. Swan can do well anyway, but his lack of technical education is extremely unusual when compared to most other tech companies.
usrusr 6y ago
Don't look for a change: their position was worse in the days of the Netburst dead-end and back then the company was just lucky that a second, independent path had been followed in the Haifa office to target a niche market (yes, laptops were niche in that age). So has there been organizational dysfunction for decades? I think not: there are things Intel has always been doing very well and post-Netburst improvements after Core 2 have also been significant. I believe that a big element is basically luck: you invest in a certain progression path and that investment will yield results so you keep going. Another path might be sufficiently better to write off the inferior path investment but you don't know that. Perhaps the unsatisfying path taken is the least bad of all. Even Netburst improved over time, a bit, and so did whatever forgettable AMD had been building between the Athlon glory days and those of Ryzen. As long as you see progress, it's very hard to just give it up for a fresh start (that may or may not be better). We can just be lucky that a luck/lock-in imbalance has never persisted long enough to make the lucky one the only survivor, because then they would never leave the left dead-end they'll inevitable run into some day.
- ndesaulniers 6y ago
  > whatever forgettable AMD had been building between the Athlon glory days and those of Ryzen Phenom II! I had six cores, 7 years ago! They were dog slow, but there were six of them (and that's all I could afford).
  - mjevans 6y ago
    They weren't even that slow. Seven years ago they didn't win in __single threaded__ applications, but for any multi-threaded workload they were great.
    - usrusr 6y ago
      How is that not equivalent to "they were so much cheaper that you could get more of them"? Hardly what I'd call architectural success.
      - 6y ago
deleted 6y ago
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fpoling 6y ago
Intel now and 10 years ago are not that different. If not a success of TSMC with EUV process, Intel would not be in a such troubled spot. Few years ago a reasonable assumption in the industry was that EUV would not be production-ready for quite some years. So Intel made a reasonable bet that they would be better with pushing existing technologies further. But then a company in The Netherlands solved the extreme ultraviolet generation and optics problem and Intel failed to push their existing process to 10nm allowing TSMC and Samsung to overtake it as a technology leader. And Intel now has to deal with a situation that it had no experience for the last 40 years when the company was a technology leader.
georgeburdell 6y ago
I don't know, but I can tell you why it won't get better. Anyone smart enough to get promoted at Intel is smart enough to move to Apple and make 50% more. I know because I did that. The ones I know left at INTC tell me that financial engineering is off the charts. INTC deserves that 9 P/E ratio
ksec 6y ago
>Is there good coverage There are lots of moving parts with an enormous organisation like Intel. But if you ask me there is one thing to point the finger to, it would be ex-Intel Chairman Andy Bryant ( He retired earlier this year ). Raised to CFO in 90s. Promoted to CAO in 00s. And later head the process and manufacturing operations while forced out Patrick Gelsinger. That was I think in 2009. The Otellini and Bryant era. Paul Otellini retired in 2012, and BK ( Brian Krzanich ) was picked ( by Andy Bryant ) as Otellini's successor. There seems to be lots of power play within Intel that we will never know.
incog_nit0 6y ago
> Is there good coverage of how Intel became so uncompetitive? This is an insightful analysis of what’s going wrong at Intel and the lead-up and fall out after Keller left: Part 1: https://web.archive.org/web/20200730185751/https://twitter.com/chiakokhua/status/1288911541207613440 https://web.archive.org/web/20200730185751/https://twitter.c... Part 2: https://web.archive.org/web/20200729091548/https://twitter.com/chiakokhua/status/1288402697536720897 https://web.archive.org/web/20200729091548/https://twitter.c... Part 2.5: https://web.archive.org/web/20200802065407/https://twitter.com/chiakokhua/status/1289816670626709506 https://web.archive.org/web/20200802065407/https://twitter.c... Part 3: https://web.archive.org/web/20200807105015/https://twitter.com/chiakokhua/status/1291687789260451847 https://web.archive.org/web/20200807105015/https://twitter.c... Part 4: https://web.archive.org/web/20200812073050/https://twitter.com/chiakokhua/status/1293444174851653632 https://web.archive.org/web/20200812073050/https://twitter.c...

by nxc18 6y ago

DylanBohlender 6y ago

Here are a couple good articles explaining it. https://www.extremetech.com/extreme/227720-how-intel-lost-10-billion-and-the-mobile-market https://www.extremetech.com/extreme/227720-how-intel-lost-10... https://semiwiki.com/semiconductor-manufacturers/intel/289196-murphys-law-vs-moores-law-how-intel-lost-its-dominance-in-the-computer-industry/ https://semiwiki.com/semiconductor-manufacturers/intel/28919... The TL;DR is that Intel has always been a vertically integrated shop (meaning that they usually fab and design their own chips), and that is starting to bite them because pure-play foundries are improving their tech at a faster rate. Intel has been unable to keep up with process advancements in their foundries, and that has led to pure-play foundries like TSMC taking massive market share. As chips get smaller and smaller, Intel has failed to keep up. They can only do 10nm for their mobile stuff and 14nm for their desktop stuff, whereas fabs like TSMC have been in 7nm territory for a while now and are moving into 5nm territory.

avmich 6y ago
> The TL;DR is that Intel has always been a vertically integrated shop (meaning that they usually fab and design their own chips), and that is starting to bite them because pure-play foundries are improving their tech at a faster rate. Are you saying that vertically integrated companies are inherently disadvantaged because pure-play companies have a bigger list of orders and can spend more on evolving technology? There is advantage to be vertically integrated, namely a better global optimization across domains, like between design and manufacturing. Would be interesting to know why it's not enough - if it's always not enough. If not always, then this particular case needs more reasons.
- simonh 6y ago
  I think the point is if TSMC develops a new node they will find customers for it, and they compete with other foundries on node. With intel their foundries only have internal customers, who can only go to their internal foundries. There’s no competitive pressure on the foundries, and if they are ready early that’s wasted capacity. So so capacity and technology planning is based on a common road map to meet the needs of their slowest (er, I mean only) customer.
- ethbr0 6y ago
  The balance likely comes down to volume. Specifically, total global chip sales. If Intel builds Intel (I believe their contract fabing is a rounding error?), then they're directly tied to Intel chip sales. This sets up a potential death spiral. Intel misses a process node deadline, Intel's products are uncompetitive, Intel sales decrease, less demand for Intel fab, less money for Intel fab improvement. Intel can temporarily paper over this by shifting money from other areas of the company, but it's not a good path to be on. Conversely, as you might expect, if Intel sales are increasing then the opposite, virtuous cycle holds. So essentially, Intel's fortune is tied to the Intel_sales : (global_sales / number_of_leading_edge_non-Intel_fabs) ratio. And with regards to that, two huge things happened in the marketplace recently: (1) mobile chip sales explosion, (2) GlobalFoundries exiting leading process race. If Intel hadn't been screwed by a process engineering miss, longer term trends would still have hit them hard.
  - CountSessine 6y ago
    This is the case with every foundry, though. It’s the reason GloFo isn’t competitive anymore, for example. What’s more interesting is the physics reason that they tripped up the last generation - what did TSMC do right that Intel did wrong? What bets were made? Which ones paid off?
    - Pet_Ant 6y ago
      I believe the issue was that Intel was leaning harder on EUV trying to make it and burying the competition instead of a more cautious approach by TSMC. Zen 3 is finally using some EUV layers whereas I believe Intel already wanted to use EUV heavily in their "10"nm process.
ckemere 6y ago
Just skimming the first article, the TL;DR that I took away is that TSMC can get revenue from their old foundry nodes for much longer than Intel can. So the issue is not how fast TSMC improves, but more that Intel has to invest proportionally much more to keep up.
- dragontamer 6y ago
  Note: the I/O chip on AMD Zen 2 / Zen 3 is a 14nm GloFo chip. Only the CPU-cores ("Zepplin" maybe, or whatever they call them now) are 7nm TSMC. So AMD's strategy also leads to lower fabrication costs: because they can make a far cheaper 14nm chip to handle the slower portions of I/O (talking to RAM, or PCIe), while the expensive 7nm parts of TSMC are used only for the cores / L1 cache / L2 cache / L3 cache.
  - zinekeller 6y ago
    Small nitpick: if I remeber correctly, AMD now uses 12nm process from GloFo now instead of 14nm (due to PCIe 4 requirements).
    - dragontamer 6y ago
      If so, it hasn't changed since Zen 2. IIRC, AMD is on record saying that Zen2 / Zen3 have the same I/O chip, and that only the 7nm stuff is changing. Zen 2 has PCIe 4, so you could very well be correct.
  - Teever 6y ago
    Is there any indication that Intel will move to this chiplet design? It seems like it's a no brainer and it's been proven to work by AMD. What's keeping Intel from adopting this same practice? is it IP?
    - dragontamer 6y ago
      Intel has a competitor to chiplets, called EMIB, based off its Altera purchase. EMIB is pretty cool, but has only been deployed in a small number of situations so far (There was a Xeon + FPGA chip Intel made. There was the hybrid Intel+AMD chip, and finally the new big.LITTLE clone chip that Intel merged an Icelake + Atom core together). I don't know why Intel hasn't invested more heavily into EMIB, Foveros, and other advanced-packaging technologies... but Intel is clearly working on it. Intel can do it, they just haven't decided to do so yet. They have the tech for sure. Its simply a matter of priorities. Its not so much that Intel "isn't" investing into it, its arguable that Intel just hasn't invested "enough" into it. AMD went all in: they literally bet their entire company on advanced-packaging, with AMD GPUs using an active interposer with HBM2, and now Zen-chips taking a chiplet strategy. And to be fair: AMD had to do something drastic to turn the tide. We're just at a point where AMD is finally reaping the benefits of a decision they made years ago. -------- If I were to take a guess: Intel was too confident that they could solve 10nm / 7nm (or more specifically: EUV and/or quad patterning), which would have negated the need for advanced packaging. AMD on the other hand, is fabless. They based their designs off of what TSMC was already delivering to Apple. Since TSMC leapfrogged Intel in technology, AMD can now benefit from TSMC (indirectly benefiting from from Apple's investments). Intel's failure bubbled up from the fab level: Without 10nm chips, Intel was unable to keep up with TSMC's performance, and now AMD is advancing. ---- AMD's strategy just works really well for AMD. AMD is forced to keep buying chips from GloFo (which are limited to 14nm or 12nm designs). All of AMD's decisions just lined up marvelously: they fixed a lot of issues with their company by just properly making the right decisions in a lot of little, detailed ways. A happy marriage of tech + business decisions. I dunno if they can keep doing that, it almost feels lucky to me. But they're benefiting for sure. AMD took something that seemed like a downside (the forced purchase of 12nm or 14nm chips, even when 7nm was available), and turned it into a benefit.

tyingq 6y ago

Giving Jim Keller the boot is probably on Intel's list of regrets.

ethbr0 6y ago
Chip architecture isn't current Intel's problem, process architecture is. There's some overlap between the 2, but 100% of Intel's current struggles can be chalked up to dysfunction on their process side. Given the lead time of chip arch (2-3 years?), the chip side of the house is arriving at manufacturing start day, and the process and specs they'd been optimizing for just aren't available. Until Intel's process catches up, other parts of the company have limited options. (TSMC!)
- 013a 6y ago
  Right, and that's my biggest fear. The process side of this industry is in a really scary spot right now. TSMC is killing it. Nvidia is using Samsung to fab the RTX 3xxx chips, and there's some rumblings that low yields are a reason why those are in such short supply (not to mention, whenever Samsung releases a new phone only some regions get the Exynos chips, because historically they couldn't produce enough of them; Samsung used to have a pretty cool relationship with Qualcomm whereby Snapdragons were fabbed with Samsung, but more recently, they've moved to TSMC). On the high performance side, everyone is moving to TSMC. If Samsung and Intel's fabs continue to exhibit issues at these smaller process node sizes, the monoculture is only going to get worse. We need Intel to get their act together, not just because it pushes better design innovation from AMD and Nvidia (not that they need it right now), but because their fabs are a critical, independent part of the software supply chain. They're the last western company with any form of high yield fabrication on high performance chips. At this point, we shouldn't just be worried about Intel's bottom line; we need to start being legitimately worried about national security (both in tactile cyber-warfare terms, and also more nebulous economic terms with regard to western manufacturing).
  - ethbr0 6y ago
    The geopolitical angle is not to be forgotten either. TSMC is majority-based in a country whose land and government is claimed by another, nearby, much larger country. A country willing to leverage international economic options to further that claim. TSMC's global importance has direct implications on the world's appetite for intervening or preemptively selling arms against a hypothetical Taiwan Strait invasion.

jjtheblunt 6y ago

hotdesking?

nxc18 6y ago
Several of the engineers I worked with a few years ago left Intel (for the company I work at) after they switched to hotdesking to save money on facilities. Basically the concept was instead of engineers having an assigned office or desk, the office would have a large field of unassigned desks and generic equipment. Every day you would come in, reserve a desk, take any belongings from a locker, and set up shop. At the end of the day, you would tear down, lock up, and leave. It is beautifully efficient from a top-down perspective, but it turns out employees like the consistency of a known work location each day. Its also nice to be able to put up a picture of family, from what I gather. I suspect the cost of personnel replacement dwarfs the saving of n% reduction in desk need.
- rwmj 6y ago
  The worst part of hot-desking in my experience is you always seem to end up next to some guy from marketing who is on their phone all day, and as a result you get absolutely no thinking time.
  - newen 6y ago
    Same problem comes up with open offices. Some ass from another department constantly talking on the phone 9 to 5. I developed a Pavlovian twitch every time his phone rang.
    - ethbr0 6y ago
      "Corporate Accounts Payable, Nina speaking. Just a moment!" https://m.youtube.com/watch?v=oFwkL1WgD_0 https://m.youtube.com/watch?v=oFwkL1WgD_0
    - djrogers 6y ago
      > Some ass from another department constantly talking on the phone 9 to 5. Dude, that guy's job probably relied on him being on the phone all day - he's just doing it. It's not his fault that you can hear him, it's your office manager/designer. Some of us really do have to spend a huge chunk of our day talking to other people on the phone, zoom, etc. There's n other way to get our jobs done, and if they don't give us private office space to do it in, then we have to do it in the open space they do give us.

noch 6y ago

> Is there good coverage of how Intel became so uncompetitive? François Piednoël, performance architect at Intel for 20 years, recently gave a presentation that covers a lot of the reasons behind Intel's decline in his presentation "How to Fix Intel" https://www.youtube.com/watch?v=fiKjzeLco6c https://www.youtube.com/watch?v=fiKjzeLco6c

temac 6y ago
I think he is a little overrated, and the only reason he is that much known is because it is actually rare to see former Intel engineers opening a Youtube channel with some Intel content. His take about how to fix Spectre made completely no sense to me, so either I missed something, or he is actually lacking on some technical subjects... Anyway still some interesting insight about what he saw happened there. The situation can be explained in a very boring way in any case. You had the tick-tock cycle, then Intel 10nm was broken, but they thought not anything they could not fix with one more year of process debugging, maybe 2 worst case. And they had so much advance that they could even have tolerated 3. Except 10nm basically never worked. And the new microarchitectures were designed for it... They switched to thinking what to do with 14+++++++++ far too late, and even then I admit the result is suboptimal. SemiAccurate is... let's say very very opiniated (as usual), to be polite, and I don't think Rocket Lake will be that much a disaster, but also yes Zen 3 is solid, although not that much magical and a bit overpriced for now (but I'm sure AMD will be able to adjust if really needed) The final thing is: Intel had really an insane advance, and medium/high core count is not that much required right now in volume for consumers. I'm not sure about the situation in datacenters, could be more of a problem for Intel. But Intel has a level of market addressing that is insane and far above AMD. So it is not that much a big deal for Intel, at least if they manage to come back on tracks in the coming years. So did Intel became that much uncompetitive? I don't really think so. Enthusiasts are just so a bit too much now that AMD really is competitive. Choosing Zen 2 was still a (often excellent) compromise. Choosing Zen 3 over Intel would be a no-brainer if cheaper (and when you can!), and depending of what you do it can often be the good choice even at the current prices, or at least for some specific models.

skavi 6y ago

Intel never stopped investing a huge amount into R&D.

deleted 6y ago
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totalZero 6y ago

My perspective is that every process node is so critical that missing the mark on 10nm had far-reaching ramifications. This kind of technology has gargantuan inertia. The entire hardware ecosystem is strongly interconnected between different firms, and each firm's future technology depends strongly on its past execution. Failure to deliver on 10nm not only jeopardized the smooth rollout of the subsequent process node, it also hurt Intel's ability to deliver large quantities of full-featured chips to customers. I don't personally believe that Apple would be going to in-house silicon instead of Intel for its flagship laptops if there were a viable way to avoid doing so. Intel is so hurt right now that I surmise it'd be willing to negotiate a fat discount for a flag-carrying customer, and the loss of Windows functionality is kind of disappointing at the upper end of the market (where some tools are clearly better supported by windows or at least x86).

solarkraft 6y ago
AMD seems to be doing well on x86 - they could've gone with them and saved themselves a somewhat painful ecosystem breakage. It's not just Intel's failure. They must think their chips are competitive against AMD's as well (or they're all in on iOS apps on Macs).
- klelatti 6y ago
  I think its partly their desire to add their own IP (use of Apple Silicon as the name is probably revealing of how they think of the new chips) was probably decisive in making the move from x86. Plus probably still cheaper than any x86 alternative.
  - hakfoo 6y ago
    It's probably also a great way to avoid head-to-head competition. Apple marketing always reminded me of how for decades, Rolls-Royce advertisements never would explicitly say things like the engine horsepower and displacement-- just "ample." Now it will be that much easier to dodge performance questions. "Our machines are not built to run (mainstream software or game), so of course the performance is sketchy in the emulation penalty box. Just run the seven pieces of native MacOS software and it really flies."

graton 6y ago

I think they have lost a lot of their best employees because their pay is not that great. They aimed for paying at the 50th percentile in wages and the top companies come in and can offer double or more their current pay. Doesn't help they switched from large cubes with five-foot high cubicle walls which did a good job on minimizing noise and visual distractions to having cubicle walls with a height of about 3-4 feet high and much smaller. Plus they installed sit-stand desks and you have people stand and make phone calls that can be heard 30 feet away. Doesn't help for concentrating on problems.

UncleOxidant 6y ago
Yes on both counts. I was contacted a couple years back about a machine learning contracting gig. When I asked what the hourly rate was the recruiter said $45/hour. I laughed and said that the going rate for that kind of skill set is like $120+/hour. That has not been an isolated incident.
- icelancer 6y ago
  >> $120+/hour Even this would be a substantial discount for most qualified people.
  - edoceo 6y ago
    I'm not qualified and get that rate
    - bigmattystyles 6y ago
      You would be surprised what you can get just by asking.
  - PragmaticPulp 6y ago
    Given the company, it's usually long-term contracts that more closely resemble full-time employment. The location is also usually outside of the biggest, most expensive cities. $120/hr * 40 hrs/wk * 50 wks/yr = $240K before self-employment taxes and paying for insurance. Ends up being comparable to typical compensation in cities that aren't SF, Seattle, or other top-tier markets. Now if someone was doing more typical ad-hoc freelance work on a project basis, $120/hr might be too low for typical work. However, $90-120/hr as a contractor with a long-term contract and stable pay over 12-18 months is not uncommon. Unless someone has a lot of new, small contracts knocking at their door nonstop, it can make more financial sense to take a $120/hr long-term contract over sporadic $200+/hr work that changes month to month.

deleted 6y ago

[deleted]

hooch 6y ago

I recall Intel intentionally took the foot off the accelerator in the midst of the GFC, and forfeited or skipped some next development to wait things out a while.

klelatti 6y ago

I think we've all taken the ability to reliably introduce process node improvements for granted to some extent. Intel has clearly been caught out by its inability to get 10nm - which I understand was overambitious - to work and pretty much everything else follows on from there. At the same time AMD has been fortunate that TSMC has been able to continue with its node shrinks - supported by demand from and cash generated by high end mobile devices. None of which is to say that Intel has been well run (cough McAfee cough) or that your criticisms aren't valid to some extent.

hinkley 6y ago
Are there any industries where high-end manufacturing doesn't subsidize low-end and low-middle products substantially? Are we saying this all started to unravel when most of the money moved to mobile and Intel still, after 20 years of warning shots, didn't have a compelling strategy there?
- wmf 6y ago
  For Intel I think ~90% of the PC market plus ~90% of the server market provides enough volume to easily cover their R&D. The rest of the industry may have needed to pivot to mobile to fill their fabs but that's not Intel's problem.
  - yourapostasy 6y ago
    Is there an electric generator evolution scenario here Intel should be watching for? Back in the day before the electric grid really caught on, hydro- and coal-powered electric generators could be found in businesses large and small that had needs that went well beyond the limited voltage and amperage requirements of the meager electrified buildings at the time. It made sense for a business to have its own power plant engineering department to just feed and maintain the beasties if the productivity from thirsty electrically-powered machines far outweighed the enormous cost of an in-house power plant, consumables and staffing. As the grid evolved though, this need went away, and only really heavy industry these days exceed the delivery capabilities of the grid will run their own on-site power plant (more often they just try to "peer" co-locate next to a "real" power plant, kind of like HFT's with exchanges). Power plant manufacturing is now a heavily-specialized industry with margins much lower than Intel has become accustomed to. Could the "grid" of the Net, cloud and mobile devices evolve to the point where the existing PC and server markets retreats in relative scale into "heavy industrial" applications like cloud infrastructure, and shift out Intel's cash flow from under them? Under such a scenario, the PC and server markets don't shrink as much as grow dramatically slower on a relative basis to B2C-grade gear and infrastructure that explodes in growth comparatively. Intel will still be plenty profitable if well-run, and still be mighty, but won't grab all the headlines, and evolve into a GE-like "mainstream" business.

Nokinside 6y ago

Let's not forget that four companies entered this latest race in process node tech and two failed. Intel's 10nm and GlobalFoundries 7nm. This is high risk business. Unseen problems that come after pathfinding when big choices have been made may kill the success.

mattlondon 6y ago

Maybe just hubris and greed? Seems like there were years when intel did not have much competition from AMD. Each year the "big news" from intel was their their Celeron/Pentium/iX/whatever was now up to 100MHz faster than last year's (during limited situations where temperatures allow blah blah blah). Or they add some new strange trademarked exotic-sounding technology brand name each year like "The new Intel Celeron/Pentium/iX with..." "Intel MaxT"/"Intel TruEvo/"Intel Cartara"/"Intel Artuga Plus"/"Intel Versuvia"/"Intel Centurior Max"/"Intel T-Xe" that no one really understands but is basically some sort of mundane enterprise feature no one actually cares about that does something for remote wifi management Quick - rush to the store to get a new laptop!!! I totally need an extra 100MHz single-core maximum boost on a 4-core 2Ghz CPU (i.e. 5% max...) with Intel TruStep MagrittePro (TM) technology that does something to the colour gamut of my monitor in certain content creation scenarios.</sarcasm> It strikes me that Intel have been caught napping and resting on their laurels. AMD appear to have come out with a great competitive product and Intel don't seem to have anything to compete with it with because they've been milking the market for the past 5+ years with tiny incremental clock increases and nothing actually "new". They've allowed AMD to eat their lunch. Maybe they've got a "real" new product they've been keeping in reserve that they'll bring to market now and surprise everyone with. Maybe they'll bring out something amazing next year. Who knows. Maybe. Maybe not. Seems like they've blown their lead for now regardless.

somethoughts 6y ago

The interesting one I think about is if the current CEO is basically their version of Steve Ballmer at Microsoft. Not highly loved by tech, media or finance, but basically held the ship together long enough to enable Microsoft to figure out how to transition away from the sinking ship that was Microsoft Windows and into new markets. Basically he just needs to keep it afloat long enough for Intel to be able to find its version of Satya Nadella and Azure to unlock the next leg of growth.

jbay808 6y ago
Maybe? Intel is in a high-technology field, where research can take a decade to bear fruit. I hope they're already planting the seeds for that growth today, or else that they have plans that will keep them afloat for a very long time.
- Filligree 6y ago
  Do you think they'd be able to hang on for a decade without catching up?
  - riffraff 6y ago
    Why wouldn't they? They probably have contracts that last over that whole time frame already, and their revenue is an order of magnitude higher than AMD. They could lose a lot of market share and then come up with something better in the end, like in the Athlon days. Not obvious that it will happen, but not impossible.
m_mueller 6y ago
The examples you cite are people with operational excellence that were built up internally over many years. As an outsider I have no trust that Intel still has such talent, it seems they are fully run by bean counters now. Who says it's a Microsoft and not a Kodak? Microsoft had the immeasurable advantage of two big markets cornered for themselves: enterprise software and home computers software. Intel meanwhile is a market leader that is getting outplayed on every market, the only thing in their favor is missing volume by their competitors - that's not an advantage that is going to last long.

formercoder 6y ago

Hi, MBA here, not sure what "training" you're referring to. Certainly nothing I learned in school taught me to focus on quarterly results and ignore R&D. I learned to attempt to push ROIC above WACC in order to ensure firms are generating economic profits, I learned that we probably should capitalize R&D and include it in ROIC to show that it does impact value, among other things

Torkel 6y ago
ROIC: return on invested capital WACC: weighted average cost of capital
jimbob45 6y ago
I love this website for blindly downvoting an MBA. Proud of y’all. On the other hand, attempting to quantify R&D seems like a fool’s errand. Maybe quantifying between different paths of R&D to see which could pay off more is beneficial but cutting the R&D budget outright because it’s not profitable? Seems like you’re cutting away from your company’s future at that point.
kelnos 6y ago
> capitalize R&D That's the problem with "MBA thinking". You can't put a dollar value on R&D. You just can't. Anything you do will be a gross approximation, and because the number is so fuzzy, you'll be encouraged (even subconsciously) to fudge it around to make other things look better, which will undoubtedly lead you to undervalue R&D to the point where it negatively impacts your business, but you have no idea why, because you're solely focused on dollar figures and not what really matters. Y'know, like developing the ability to solve actual customer problems in an exceptional manner. This sort of thing is very difficult to quantify, and any approach that starts from a finance perspective is always going to be sub-optimal at best, but often just flat-out wrong. I see so many people optimizing the things that are quantifiable at the expense of the things that aren't, when the loss of the qualitative things is what's killing their business. MBA types seem to never get this, and the form of your reply is basically a textbook example of that.
- 6y ago

Devils-Avocado 6y ago

H1B migrant workers building empires inside the company instead of delivering good products.

tehlike 6y ago
Hah, likely true.

deepnotderp 6y ago

I grew up in a neighborhood where probably 90% of households had at least one parent working at Intel, including mine. Very simple: Cultural Decay

baloney1 6y ago

The CEO is, literally, one of these MBA types and he has recursively applied this thinking throughout the whole organization.

k__ 6y ago
"received a bachelor's degree in business administration from the University at Buffalo School of Management in 1983 and his MBA from Binghamton University in 1985." "January 31, 2019, Swan transitioned from his role as CFO and interim CEO" They got what they paid for, I guess...
- gotfork 6y ago
  To be fair, most of the 10 nm problems were already in place when BK was still the CEO.
  - justicezyx 6y ago
    He is the manifestation of the problem then.
- deleted 6y ago
  [deleted]
ekianjo 6y ago
Most CEO are MBAs.
- dwheeler 6y ago
  A CEO who has only a non-technical education (such as an MBA) is VERY unusual for hardware or software companies that are successful. Often the CEO of this kind of company has at least some technical education, and usually the CEO has lots of it. After all, most of the decisions in such firms will have a technology component to them. A few examples: * Lisa Su (CEO of Advanced Micro Devices (AMD)): BS, MS, and PhD in Electrical Engineering from MIT, and is a fellow of IEEE * Jensen Huang (CEO and founder of NVIDIA): BS in electrical engineering from Oregon State University, master's degree in electrical engineering from Stanford University * C.C. Wei (CEO of TSMC): Ph.D. in Electrical Engineering from Yale University * Simon Segars (CEO ARM): Bachelor of Engineering degree in electronic engineering at U of Sussex, Master of Science degree from the School of Computer Science at the University of Manchester * Sundar Pichai (Alphabet/Google CEO): Has an MBA, but also has an M.S. from Stanford University in materials science and engineering * Eric Schmidt (former Google CEO): BS in Engineering, M.S. degree for designing and implementing a network, and PhD degree in EECS, with a dissertation about the problems of managing distributed software development and tools for solving these problems * Jeff Bezos (Amazon CEO): Bachelor of Science in Engineering (BSE) in electrical engineering and computer science from Princeton * Mark Zuckerburg (Facebook CEO): In Harvard studied Psychology and Computer Science (did not earn a degree, but did study it for a few years and implemented the first version of Facebook). * Tim Cook (Apple CEO): MBA from Duke University and a Bachelor of Science degree in Industrial Engineering from Auburn University. * Satya Narayana Nadella (Microsoft CEO): Bachelor's in electrical engineering from the Manipal Institute of Technology in Karnataka; M.S. in computer science at the University of Wisconsin–Milwaukee; MBA from the University of Chicago Booth School of Business * Reed Hastings (Netflix CEO): Bachelor of Arts degree in Mathematics (Bowdoin College), MS Computer Science (Stanford University) I'm sure there are more examples, but I think that amply demonstrates my point. The only other example I found of a no-tech CEO leading a tech company was Safra Catz (Oracle CEO), who has a bachelor of arts and a J.D. (Law School). My search wasn't exhaustive, but it was illuminating. Now let's compare this to Bob Swan (Intel CEO), who received a bachelor's degree in business administration from the University at Buffalo School of Management in 1983 and his MBA from Binghamton University in 1985. No tech at all. Maybe Mr. Swan can do well anyway, but his lack of technical education is extremely unusual when compared to most other tech companies.

usrusr 6y ago

Don't look for a change: their position was worse in the days of the Netburst dead-end and back then the company was just lucky that a second, independent path had been followed in the Haifa office to target a niche market (yes, laptops were niche in that age). So has there been organizational dysfunction for decades? I think not: there are things Intel has always been doing very well and post-Netburst improvements after Core 2 have also been significant. I believe that a big element is basically luck: you invest in a certain progression path and that investment will yield results so you keep going. Another path might be sufficiently better to write off the inferior path investment but you don't know that. Perhaps the unsatisfying path taken is the least bad of all. Even Netburst improved over time, a bit, and so did whatever forgettable AMD had been building between the Athlon glory days and those of Ryzen. As long as you see progress, it's very hard to just give it up for a fresh start (that may or may not be better). We can just be lucky that a luck/lock-in imbalance has never persisted long enough to make the lucky one the only survivor, because then they would never leave the left dead-end they'll inevitable run into some day.

ndesaulniers 6y ago
> whatever forgettable AMD had been building between the Athlon glory days and those of Ryzen Phenom II! I had six cores, 7 years ago! They were dog slow, but there were six of them (and that's all I could afford).
- mjevans 6y ago
  They weren't even that slow. Seven years ago they didn't win in __single threaded__ applications, but for any multi-threaded workload they were great.
  - usrusr 6y ago
    How is that not equivalent to "they were so much cheaper that you could get more of them"? Hardly what I'd call architectural success.
    - 6y ago

deleted 6y ago

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fpoling 6y ago

Intel now and 10 years ago are not that different. If not a success of TSMC with EUV process, Intel would not be in a such troubled spot. Few years ago a reasonable assumption in the industry was that EUV would not be production-ready for quite some years. So Intel made a reasonable bet that they would be better with pushing existing technologies further. But then a company in The Netherlands solved the extreme ultraviolet generation and optics problem and Intel failed to push their existing process to 10nm allowing TSMC and Samsung to overtake it as a technology leader. And Intel now has to deal with a situation that it had no experience for the last 40 years when the company was a technology leader.

georgeburdell 6y ago

I don't know, but I can tell you why it won't get better. Anyone smart enough to get promoted at Intel is smart enough to move to Apple and make 50% more. I know because I did that. The ones I know left at INTC tell me that financial engineering is off the charts. INTC deserves that 9 P/E ratio

ksec 6y ago

>Is there good coverage There are lots of moving parts with an enormous organisation like Intel. But if you ask me there is one thing to point the finger to, it would be ex-Intel Chairman Andy Bryant ( He retired earlier this year ). Raised to CFO in 90s. Promoted to CAO in 00s. And later head the process and manufacturing operations while forced out Patrick Gelsinger. That was I think in 2009. The Otellini and Bryant era. Paul Otellini retired in 2012, and BK ( Brian Krzanich ) was picked ( by Andy Bryant ) as Otellini's successor. There seems to be lots of power play within Intel that we will never know.

incog_nit0 6y ago

> Is there good coverage of how Intel became so uncompetitive? This is an insightful analysis of what’s going wrong at Intel and the lead-up and fall out after Keller left: Part 1: https://web.archive.org/web/20200730185751/https://twitter.com/chiakokhua/status/1288911541207613440 https://web.archive.org/web/20200730185751/https://twitter.c... Part 2: https://web.archive.org/web/20200729091548/https://twitter.com/chiakokhua/status/1288402697536720897 https://web.archive.org/web/20200729091548/https://twitter.c... Part 2.5: https://web.archive.org/web/20200802065407/https://twitter.com/chiakokhua/status/1289816670626709506 https://web.archive.org/web/20200802065407/https://twitter.c... Part 3: https://web.archive.org/web/20200807105015/https://twitter.com/chiakokhua/status/1291687789260451847 https://web.archive.org/web/20200807105015/https://twitter.c... Part 4: https://web.archive.org/web/20200812073050/https://twitter.com/chiakokhua/status/1293444174851653632 https://web.archive.org/web/20200812073050/https://twitter.c...