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I think this is the wrong way of looking at it - and actually the way that Intel themselves describe it. Intel think of themselves as a manufacturing company wh

I think this is the wrong way of looking at it - and actually the way that Intel themselves describe it. Intel think of themselves as a manufacturing company whose designs drive demand for their fab. But in truth, most of their value comes from x86 which could be produced by any fab. To stay competitive, their high end designs need to be on the absolute bleedge edge process. Which up until now has been Intel fabs. But it's not giving up on Intel fabs to get their stuff produced by TSMC. They need to do both - they need to make money by producing the best designs in the market no matter what the process in the high end space, as wl as sinking investment into their fabrication side to make sure that in 5 years time they're the leading fab. At which point they can turn around and say F-U to all those TSMC customers, produce only Intel chips and use that to capture market share.

reader_mode 6y ago
And the way I see it that's probably the reason why TSMC won't allocate any significant capacity to them, they already have more demand than they can produce. Maybe if they spun out the fab part but they have so much stuff under the corporation that probably makes no sense.
- muricula 6y ago
  AMD spun out global foundries, and they're not competitive at the bleeding edge today. I fear the fab-only part of Intel would be the same.
  - iforgotpassword 6y ago
    So then AMD switched to TSMC. Otherwise they would have been stuck with an inferior process and fallen even more behind during the last decade.
ogre_codes 6y ago
> But in truth, most of their value comes from x86 which could be produced by any fab. This is why I suggest it's a profit taking move. If they ditched all manufacturing, their profitability will certainly go up in the near term. But then how does Intel fend off increasingly competitive ARM CPUs? So long as Intel had a hand in manufacturing, they at least have a chance of maintaining an edge through their processes. I'm also deeply frustrated that yet another manufacturing giant is leaving the US. But that's more or less another issue.
- HelloNurse 6y ago
  But it is good "profit taking": selling good x86 products that can't be made with Intel fabrication processes (which apparently offer a choice between too old, not working or not ready) instead of selling nothing (at least, not in satisfactory quantities).
theevilsharpie 6y ago
> But it's not giving up on Intel fabs to get their stuff produced by TSMC. Manufacturing at the leading edge is getting increasingly expensive, to the point where every fab other than TSMC, Samsung, and Intel has bowed out over the years and has never operated on the leading edge again. A major part of the reason for this consolidation is that fabs need more and more economies of scale in order to make up the cost of the initial investment in the fab. If you can't achieve those economies of scale, then the manufacturing node will never be profitable, and whoever's bankrolling it will quickly pull the plug. (GlobalFoundries exiting the 7nm market is the most recent example of this.) If Intel outsources leading edge production to TSMC or Samsung, they will lose operational experience and infrastructure needed to operate fabs at the leading edge, and their fabs will never be competitive for leading edge production again (barring a major misstep by TSMC or Samsung).

reader_mode 6y ago

And the way I see it that's probably the reason why TSMC won't allocate any significant capacity to them, they already have more demand than they can produce. Maybe if they spun out the fab part but they have so much stuff under the corporation that probably makes no sense.

muricula 6y ago
AMD spun out global foundries, and they're not competitive at the bleeding edge today. I fear the fab-only part of Intel would be the same.
- iforgotpassword 6y ago
  So then AMD switched to TSMC. Otherwise they would have been stuck with an inferior process and fallen even more behind during the last decade.

ogre_codes 6y ago

> But in truth, most of their value comes from x86 which could be produced by any fab. This is why I suggest it's a profit taking move. If they ditched all manufacturing, their profitability will certainly go up in the near term. But then how does Intel fend off increasingly competitive ARM CPUs? So long as Intel had a hand in manufacturing, they at least have a chance of maintaining an edge through their processes. I'm also deeply frustrated that yet another manufacturing giant is leaving the US. But that's more or less another issue.

HelloNurse 6y ago
But it is good "profit taking": selling good x86 products that can't be made with Intel fabrication processes (which apparently offer a choice between too old, not working or not ready) instead of selling nothing (at least, not in satisfactory quantities).

theevilsharpie 6y ago

> But it's not giving up on Intel fabs to get their stuff produced by TSMC. Manufacturing at the leading edge is getting increasingly expensive, to the point where every fab other than TSMC, Samsung, and Intel has bowed out over the years and has never operated on the leading edge again. A major part of the reason for this consolidation is that fabs need more and more economies of scale in order to make up the cost of the initial investment in the fab. If you can't achieve those economies of scale, then the manufacturing node will never be profitable, and whoever's bankrolling it will quickly pull the plug. (GlobalFoundries exiting the 7nm market is the most recent example of this.) If Intel outsources leading edge production to TSMC or Samsung, they will lose operational experience and infrastructure needed to operate fabs at the leading edge, and their fabs will never be competitive for leading edge production again (barring a major misstep by TSMC or Samsung).