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This spoils any optimism I may have had for Intel. Reading that this came due to a search for "Strategic alternatives" is damning. Intel is like Boeing. They ma

This spoils any optimism I may have had for Intel. Reading that this came due to a search for "Strategic alternatives" is damning. Intel is like Boeing. They make one thing and they used to make it very well, silicon. If Boeing told you they were looking into alternatives to making planes would you be optimistic? It feels like they're throwing in the towel on being the leader, giving up on trying to catch up process wise and will look to maximize their existing revenue. RIP

totalZero 6y ago
I don't see much similarity between the story of Intel and the story of Boeing. Boeing made an entire line of defective airplanes that could autonomously kill everyone aboard under normal usage. Then, a respiratory virus hammered the travel industry. In contrast, the semiconductor industry is seeing more demand than ever before, and presently undergoing a shortage. Intel has mismanaged 10nm and 7nm, but the company maintains a majority CPU market share overall and an even wider margin for servers.
- ericbarrett 6y ago
  I think Spectre and related vulnerabilities are directly comparable to the 737 MAX debacle, insofar as they reflect poor engineering decisions made directly against the customer in favor of short-term profit. Of course Boeing’s decision was far more devastating and led to the loss of 346 souls, but the pathology that gave rise to both situations (executive hubris, failure to tackle accumulated tech debt) seems quite similar.
  - ghaff 6y ago
    Eh. Some of the vulnerabilities in that class were Intel-specific. But there is a whole class of vulnerabilities that potentially can hit any design that has speculative execution--and people just aren't OK with shutting off speculative execution because the performance hit is so big.
    - ericbarrett 6y ago
      Intel chips were significantly more impacted by Spectre mitigations than AMD & others[0], and needed significantly more workarounds. [0] https://www.tomshardware.com/news/intel-amd-mitigations-performance-impact,39381.html https://www.tomshardware.com/news/intel-amd-mitigations-perf...
  - totalZero 6y ago
    Workarounds for Meltdown and Spectre can impose a nontrivial performance hit for certain workloads, but it's tough to compare a 20-month grounding of 737 Max with patched security vulnerabilities that the average consumer neither understands nor directly observes.
    - ericbarrett 6y ago
      Why not? Obviously the outcome of Boeing’s decision directly led to many deaths, and I am explicitly not trying to compare the two on result. However, the corporate actions which created these two scenarios are quite similar and I think it’s useful to compare them, since we’ll definitely see it again and again in the modern business world.
  - xxpor 6y ago
    The thing about the max is the deaths were directly observable and obvious. The problem with Spectre/Meltdown is they might have been exploited for years, leading to wars/economic harm that the general public will never be able to tie back to Intel. On the balance of probabilities I think the Max debacle ended up doing more harm, but IMO Intel (and AMD/ARM to a lesser extent) did get off easy because of the extremely technical nature of the issue. Edit: I also agree that the max issue has a much more direct Executive Directive -> Harm line to draw. I don't think the Intel CEO went down to engineering and said anything comparable to "create a new version of a plane that needs no new training while having completely new larger more efficient engines, even if that's physically impossible"
meragrin_ 6y ago
> It feels like they're throwing in the towel on being the leader, giving up on trying to catch up process wise and will look to maximize their existing revenue. RIP If they were going from a former CTO to a former CFO, I would agree. They are going to a former CTO from a former CFO. How does this make it seem like they are looking to maximize their existing revenue rather than trying to get someone in to "fix" their issues?
gvb 6y ago
TFA doesn't say it came due to a search for "strategic alternatives." It says "Dan Loeb's Third Point hedge fund in December urged Intel's board to explore "strategic alternatives." That is typical hedge fund pressure attempting to squeeze (short term) money out of their investment. The article has two more paragraphs consisting of the hedge fund's cheap shot quotes. It isn't clear Intel's board succumbed to the hedge fund pressure. Changing the CEO from a finance-oriented CEO to a technically-oriented CEO (Gelsinger) is taking Intel back to its roots rather than "exploring strategic alternatives." Intel was founded and lead for many years by technically-oriented CEOs. Ref: https://en.wikipedia.org/wiki/Intel#Leadership_and_corporate_structure https://en.wikipedia.org/wiki/Intel#Leadership_and_corporate...
- totalZero 6y ago
  As far as Third Point's public commentary goes, you're right. [0] (Who knows what they said in private.) "Strategic alternatives" often means "split up the businesses." Silver Lake proposed something similar to AMD in 2015. In the end, the Silver Lake deal didn't happen [1] and AMD stock is up 45x since then. [0] https://www.yahoo.com/entertainment/third-point-full-letter-intel-220753103.html https://www.yahoo.com/entertainment/third-point-full-letter-... [1] https://www.extremetech.com/computing/215353-amd-talks-with-private-equity-firm-silver-lake-fell-through-report https://www.extremetech.com/computing/215353-amd-talks-with-...
  - atniomn 6y ago
    Splitting up Intel's fabrication and design businesses would it make similar to AMD, the stock which is up 45x since 2015. Intel's fabrication business needs more volume, so it can increase R&D spending and capital expenditure, it can get this volume as a merchant fab. Intel's design business doesn't need to be held back by Intel's fabrication delays. I imagine designers at Intel would prefer to compete with AMD on the same playing field--TSMC's latest node.
    - totalZero 6y ago
      AMD chose to spin out GlobalFoundries in 2008, several years prior to the 2015 Silver Lake near-deal [0], becoming a fabless company on the tail end of a 90% slide in AMD stock. AMD share price continued to decline and remained in the low single digits for seven years after AMD and GlobalFoundries parted ways. My understanding is that Silver Lake wanted AMD to split apart its product segments. They were going to buy 20-25% of the company, but the deal never materialized. Intel's vertical integration is an asset IMO, especially in a supply-constrained environment like the present. [0]: https://www.eetimes.com/amd-foundry-spinoff-open-for-business/# https://www.eetimes.com/amd-foundry-spinoff-open-for-busines...
specialist 6y ago
Yes, but (vs and): My goober hot take on Boeing is a bit different. Another victim of financialization. When McDonald Douglass reverse acquired Boeing, the balance changed. Emphasis on share price, gutting wages while doing stock buybacks, shady business practices (bribes for defense contracts, gutting oversight), and so forth. Of course, there's always more to the story. Like I have no idea how much to blame Clinton Admin's push for consolidation and monopolies (removing competition). Or how to explain the quixotic quest to outsource and offshore core competencies. So as casual observer, it seems like Intel similarly lost its way.

totalZero 6y ago

I don't see much similarity between the story of Intel and the story of Boeing. Boeing made an entire line of defective airplanes that could autonomously kill everyone aboard under normal usage. Then, a respiratory virus hammered the travel industry. In contrast, the semiconductor industry is seeing more demand than ever before, and presently undergoing a shortage. Intel has mismanaged 10nm and 7nm, but the company maintains a majority CPU market share overall and an even wider margin for servers.

ericbarrett 6y ago
I think Spectre and related vulnerabilities are directly comparable to the 737 MAX debacle, insofar as they reflect poor engineering decisions made directly against the customer in favor of short-term profit. Of course Boeing’s decision was far more devastating and led to the loss of 346 souls, but the pathology that gave rise to both situations (executive hubris, failure to tackle accumulated tech debt) seems quite similar.
- ghaff 6y ago
  Eh. Some of the vulnerabilities in that class were Intel-specific. But there is a whole class of vulnerabilities that potentially can hit any design that has speculative execution--and people just aren't OK with shutting off speculative execution because the performance hit is so big.
  - ericbarrett 6y ago
    Intel chips were significantly more impacted by Spectre mitigations than AMD & others[0], and needed significantly more workarounds. [0] https://www.tomshardware.com/news/intel-amd-mitigations-performance-impact,39381.html https://www.tomshardware.com/news/intel-amd-mitigations-perf...
- totalZero 6y ago
  Workarounds for Meltdown and Spectre can impose a nontrivial performance hit for certain workloads, but it's tough to compare a 20-month grounding of 737 Max with patched security vulnerabilities that the average consumer neither understands nor directly observes.
  - ericbarrett 6y ago
    Why not? Obviously the outcome of Boeing’s decision directly led to many deaths, and I am explicitly not trying to compare the two on result. However, the corporate actions which created these two scenarios are quite similar and I think it’s useful to compare them, since we’ll definitely see it again and again in the modern business world.
- xxpor 6y ago
  The thing about the max is the deaths were directly observable and obvious. The problem with Spectre/Meltdown is they might have been exploited for years, leading to wars/economic harm that the general public will never be able to tie back to Intel. On the balance of probabilities I think the Max debacle ended up doing more harm, but IMO Intel (and AMD/ARM to a lesser extent) did get off easy because of the extremely technical nature of the issue. Edit: I also agree that the max issue has a much more direct Executive Directive -> Harm line to draw. I don't think the Intel CEO went down to engineering and said anything comparable to "create a new version of a plane that needs no new training while having completely new larger more efficient engines, even if that's physically impossible"

meragrin_ 6y ago

> It feels like they're throwing in the towel on being the leader, giving up on trying to catch up process wise and will look to maximize their existing revenue. RIP If they were going from a former CTO to a former CFO, I would agree. They are going to a former CTO from a former CFO. How does this make it seem like they are looking to maximize their existing revenue rather than trying to get someone in to "fix" their issues?

gvb 6y ago

TFA doesn't say it came due to a search for "strategic alternatives." It says "Dan Loeb's Third Point hedge fund in December urged Intel's board to explore "strategic alternatives." That is typical hedge fund pressure attempting to squeeze (short term) money out of their investment. The article has two more paragraphs consisting of the hedge fund's cheap shot quotes. It isn't clear Intel's board succumbed to the hedge fund pressure. Changing the CEO from a finance-oriented CEO to a technically-oriented CEO (Gelsinger) is taking Intel back to its roots rather than "exploring strategic alternatives." Intel was founded and lead for many years by technically-oriented CEOs. Ref: https://en.wikipedia.org/wiki/Intel#Leadership_and_corporate_structure https://en.wikipedia.org/wiki/Intel#Leadership_and_corporate...

totalZero 6y ago
As far as Third Point's public commentary goes, you're right. [0] (Who knows what they said in private.) "Strategic alternatives" often means "split up the businesses." Silver Lake proposed something similar to AMD in 2015. In the end, the Silver Lake deal didn't happen [1] and AMD stock is up 45x since then. [0] https://www.yahoo.com/entertainment/third-point-full-letter-intel-220753103.html https://www.yahoo.com/entertainment/third-point-full-letter-... [1] https://www.extremetech.com/computing/215353-amd-talks-with-private-equity-firm-silver-lake-fell-through-report https://www.extremetech.com/computing/215353-amd-talks-with-...
- atniomn 6y ago
  Splitting up Intel's fabrication and design businesses would it make similar to AMD, the stock which is up 45x since 2015. Intel's fabrication business needs more volume, so it can increase R&D spending and capital expenditure, it can get this volume as a merchant fab. Intel's design business doesn't need to be held back by Intel's fabrication delays. I imagine designers at Intel would prefer to compete with AMD on the same playing field--TSMC's latest node.
  - totalZero 6y ago
    AMD chose to spin out GlobalFoundries in 2008, several years prior to the 2015 Silver Lake near-deal [0], becoming a fabless company on the tail end of a 90% slide in AMD stock. AMD share price continued to decline and remained in the low single digits for seven years after AMD and GlobalFoundries parted ways. My understanding is that Silver Lake wanted AMD to split apart its product segments. They were going to buy 20-25% of the company, but the deal never materialized. Intel's vertical integration is an asset IMO, especially in a supply-constrained environment like the present. [0]: https://www.eetimes.com/amd-foundry-spinoff-open-for-business/# https://www.eetimes.com/amd-foundry-spinoff-open-for-busines...

specialist 6y ago

Yes, but (vs and): My goober hot take on Boeing is a bit different. Another victim of financialization. When McDonald Douglass reverse acquired Boeing, the balance changed. Emphasis on share price, gutting wages while doing stock buybacks, shady business practices (bribes for defense contracts, gutting oversight), and so forth. Of course, there's always more to the story. Like I have no idea how much to blame Clinton Admin's push for consolidation and monopolies (removing competition). Or how to explain the quixotic quest to outsource and offshore core competencies. So as casual observer, it seems like Intel similarly lost its way.