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I don't see what options Intel has to dramatically increase their future profits and thus market capitalization, even if an activist gives them a kick up the bu

I don't see what options Intel has to dramatically increase their future profits and thus market capitalization, even if an activist gives them a kick up the butt. Option 1: Strip mine the company. This is more of the traditional PE/activist play. Once you stop spending all those R&D dollars, then Intel could extract a lot of profits from the x86 over the next decade or so. But this is only a short-medium term play. All mines run out of gold eventually. Option 2: Split the Fab and design (x86) business. I'm not sure this helps that much, I think x86 is F'ed even if it could use the TSMC fabs. This is what AMD is already doing. The major important players (Apple, Amazon, MS, Goog) want to go ARM and then maybe RISC-V for their own strategic reasons anyway. Option 3: Spend unheard of amounts of money to try and win back a process advantage over TSMC. This would entail spending tens of billions of dollars to basically make a bet that might pay off. It would be fun to watch, but success is not guaranteed, or even likely. Is there an option 4?

creato 6y ago
> The major important players (Apple, Amazon, MS, Goog) want to go ARM and then maybe RISC-V for their own strategic reasons anyway. Source? I don't think they care, I think they just don't want to be beholden to a single supplier, like they were to Intel for a while.
- discodave 6y ago
  Notice that: "AWS Graviton processors are custom built by Amazon Web Services" and "Apple Silicon" It's not just about x86 -> Arm, it's about bringing more control of the design in house. This only gets more important as we move towards more SoC type designs. Imagine, for instance, AWS doing an entire SoC with Nitro, disc controllers, memory etc on one chip. I'm not sure that they could, or would want to do such a thing with Intel and x86. Edit: Adding my sources ;) Graviton quote: https://aws.amazon.com/ec2/graviton/ https://aws.amazon.com/ec2/graviton/ Apple silicon quote: https://www.apple.com/mac/m1/ https://www.apple.com/mac/m1/ (for fun, try to CTRL+F this page for "arm")
amluto 6y ago
Option 4: spend some of their massive amounts of money to rebuild their R&D capabilities. Simultaneously give up their outdated idea that their core architecture is so valuable and secret that it must never be fabbed elsewhere. And spend the money to keep up with fab technology. And possibly put an actual engineer at the helm. Right now Intel seems to be going the way of Boeing — plenty of money, but less innovation than they ought to have.) Keeping fab and design under one roof does not require that the fab and the design sides of the business exclusively with with each other. (I think Intel should keep Altera, too. A paired CPU and FPGA solution has genuine value. One thing that Intel appears to still be good at is software tooling. If Intel were to provide tooling for their FPGAs that was anywhere near as good as their x86 tooling, then Altera could take off as everyone’s favorite platform. Right now they’re at substantial risk of losing new developer mindshare to Lattice because of the IceStorm project. I have trouble imagining that more than a few $M of total resources have been spent there. As it stands, nVidia is a major player in big chips that do serious computation. Whatever one may think about CUDA, it’s in a whole different league from the garbage currently available from Xilinx and Altera.)
- discodave 6y ago
  In 10 years, the biggest markets will likely be: 1. Mobile (I include cars, IoT etc) 2. Server/cloud (most new servers will be deployed to AWS, MS, Google, and maybe Alibaba) 3. Graphics / ML (you mentioned Nvidia and CUDA) How would your suggested option 4 help Intel gain a significant foothold in any of those markets? (or stop the Arm transition in the case of #2)
  - ethbr0 6y ago
    Crazy idea: Why doesn't Intel launch their own cloud IaaS offering? Value proposition: Intel needs to scale manufacturing and R&D, in a way that doesn't leave them in a performance bind (ie without performance, they can't sell at scale, and thus can't afford to buy performance). Abstracting compute behind an IaaS offering would let them do exactly that while providing an alternate sink for binned chips. Furthermore, they've got decent HW/SW integration talent in-house, and they could offer a key feature other clouds couldn't: vendor agnosticism. Building {PaaS product} on an Intel cloud seems strategically smarter than building on one of the continually-vertically-integrating clouds.
im3w1l 6y ago
Take the fight to TSMC by fabbing for other companies. Probably combined with your option 3.
modeless 6y ago
They must win back the process advantage. It's existential for them, and important for the U.S. geopolitically. Their fabs need more customers to justify the astronomical investment. They must expand their foundry business.
- quiescant_dodo 6y ago
  If China encroaches on Taiwan, the US is economically obligated to intervene; losing access to TSMC would be a massive hit. (It seems that TSMC is getting increasingly-advanced over their competitors, but maybe that's just my media blindspot.) I expect the federal government to take action here, probably by giving huge monetary incentives to Intel/AMD for creating a state-of-the-art fab in the US.
  - tacotacotaco 6y ago
    China has been hiring engineers from TSMC to make their own chips. https://asia.nikkei.com/Business/China-tech/China-hires-over-100-TSMC-engineers-in-push-for-chip-leadership https://asia.nikkei.com/Business/China-tech/China-hires-over... TMSC is planning to build a fab factory in the US. https://www.forbes.com/sites/willyshih/2020/05/15/tsmcs-announcement-of-a-us-fab-is-big-news/?sh=4bcdf87e2340 https://www.forbes.com/sites/willyshih/2020/05/15/tsmcs-anno...
tcbawo 6y ago
Option 4, lobby for favorable government contracts under DoD, NASA, etc. with the rationale of protecting American strategic advantage.
mkl 6y ago
> The major important players (Apple, Amazon, MS, Goog) want to go ARM and then maybe RISC-V for their own strategic reasons anyway. I think this is partly because they can easily get a license to use ARM or RISC-V in custom chips, but doing that with x86 is pretty much impossible.

creato 6y ago

> The major important players (Apple, Amazon, MS, Goog) want to go ARM and then maybe RISC-V for their own strategic reasons anyway. Source? I don't think they care, I think they just don't want to be beholden to a single supplier, like they were to Intel for a while.

discodave 6y ago
Notice that: "AWS Graviton processors are custom built by Amazon Web Services" and "Apple Silicon" It's not just about x86 -> Arm, it's about bringing more control of the design in house. This only gets more important as we move towards more SoC type designs. Imagine, for instance, AWS doing an entire SoC with Nitro, disc controllers, memory etc on one chip. I'm not sure that they could, or would want to do such a thing with Intel and x86. Edit: Adding my sources ;) Graviton quote: https://aws.amazon.com/ec2/graviton/ https://aws.amazon.com/ec2/graviton/ Apple silicon quote: https://www.apple.com/mac/m1/ https://www.apple.com/mac/m1/ (for fun, try to CTRL+F this page for "arm")

amluto 6y ago

Option 4: spend some of their massive amounts of money to rebuild their R&D capabilities. Simultaneously give up their outdated idea that their core architecture is so valuable and secret that it must never be fabbed elsewhere. And spend the money to keep up with fab technology. And possibly put an actual engineer at the helm. Right now Intel seems to be going the way of Boeing — plenty of money, but less innovation than they ought to have.) Keeping fab and design under one roof does not require that the fab and the design sides of the business exclusively with with each other. (I think Intel should keep Altera, too. A paired CPU and FPGA solution has genuine value. One thing that Intel appears to still be good at is software tooling. If Intel were to provide tooling for their FPGAs that was anywhere near as good as their x86 tooling, then Altera could take off as everyone’s favorite platform. Right now they’re at substantial risk of losing new developer mindshare to Lattice because of the IceStorm project. I have trouble imagining that more than a few $M of total resources have been spent there. As it stands, nVidia is a major player in big chips that do serious computation. Whatever one may think about CUDA, it’s in a whole different league from the garbage currently available from Xilinx and Altera.)

discodave 6y ago
In 10 years, the biggest markets will likely be: 1. Mobile (I include cars, IoT etc) 2. Server/cloud (most new servers will be deployed to AWS, MS, Google, and maybe Alibaba) 3. Graphics / ML (you mentioned Nvidia and CUDA) How would your suggested option 4 help Intel gain a significant foothold in any of those markets? (or stop the Arm transition in the case of #2)
- ethbr0 6y ago
  Crazy idea: Why doesn't Intel launch their own cloud IaaS offering? Value proposition: Intel needs to scale manufacturing and R&D, in a way that doesn't leave them in a performance bind (ie without performance, they can't sell at scale, and thus can't afford to buy performance). Abstracting compute behind an IaaS offering would let them do exactly that while providing an alternate sink for binned chips. Furthermore, they've got decent HW/SW integration talent in-house, and they could offer a key feature other clouds couldn't: vendor agnosticism. Building {PaaS product} on an Intel cloud seems strategically smarter than building on one of the continually-vertically-integrating clouds.

im3w1l 6y ago

Take the fight to TSMC by fabbing for other companies. Probably combined with your option 3.

modeless 6y ago

They must win back the process advantage. It's existential for them, and important for the U.S. geopolitically. Their fabs need more customers to justify the astronomical investment. They must expand their foundry business.

quiescant_dodo 6y ago
If China encroaches on Taiwan, the US is economically obligated to intervene; losing access to TSMC would be a massive hit. (It seems that TSMC is getting increasingly-advanced over their competitors, but maybe that's just my media blindspot.) I expect the federal government to take action here, probably by giving huge monetary incentives to Intel/AMD for creating a state-of-the-art fab in the US.
- tacotacotaco 6y ago
  China has been hiring engineers from TSMC to make their own chips. https://asia.nikkei.com/Business/China-tech/China-hires-over-100-TSMC-engineers-in-push-for-chip-leadership https://asia.nikkei.com/Business/China-tech/China-hires-over... TMSC is planning to build a fab factory in the US. https://www.forbes.com/sites/willyshih/2020/05/15/tsmcs-announcement-of-a-us-fab-is-big-news/?sh=4bcdf87e2340 https://www.forbes.com/sites/willyshih/2020/05/15/tsmcs-anno...

tcbawo 6y ago

Option 4, lobby for favorable government contracts under DoD, NASA, etc. with the rationale of protecting American strategic advantage.

mkl 6y ago

> The major important players (Apple, Amazon, MS, Goog) want to go ARM and then maybe RISC-V for their own strategic reasons anyway. I think this is partly because they can easily get a license to use ARM or RISC-V in custom chips, but doing that with x86 is pretty much impossible.