34 ms·

Intel Problems

569 points by camillovisini 6y ago

recursivedoubts 6y ago
Perhaps now the "Why do people obsess over manufacturing?" question that many tech workers ask when other US industries were decimated will become a bit less quizzical.
- coldtea 6y ago
  It only becomes less quizzical when it hits home -- that is when one's own job is on the line.
- yourapostasy 6y ago
  It was more economics and political policy wonks, economists and politicians in general, who didn't just ask that question, but thrust forth the prescriptive rhetoric through a large grid of trade agreements, "Globalism is here to stay! Get over it! Comparative Advantage!" This is only the first in a long, expensive series of lessons these people will be taught by reality in the coming decades. I'm guessing this kind of manufacturing loss will cost at least $1T to catch up and take the lead again after all is said and done, assuming the US can even take the lead. US organization, economic, and financial management at the macro scale is going through a kind of "architecture astronaut" multi-decade phase with financialization propping up abstracted processes of how to lead massive organizations as big blocks on diagrams instead of highly fractal, constantly shifting networks of ideas and stories repeatedly coalescing around people, processes, and resources into focused discrete action in continguous and continuous OODA feedback loops absorbing and learning mistakes along the way. Ideally, the expensive BA and INTC lessons drive home the urgent need for an evolution in organizational management. I wryly think how similar the national comparative advantage argument looks to much young adult science fiction portrayal of space opera galactic empire settings with entire worlds dedicated solely to one purpose. This world only produces agricultural goods. That world only provides academician services. It is a very human desire to simplify complex fractal realities, and effective modeling is one of our species' advantages, but at certain scales of size, agility and complexity it breaks down. We know this well in the software world; some problems are intrinsically hard and complex, and there is a baseline level of complexity the software must model to successfully assist with the problem space. Simplifying further past that point deteriorates the delivery.
  - DoofusOfDeath 6y ago
    > financialization propping up abstracted processes of how to lead massive organizations as big blocks on diagrams instead of highly fractal, constantly shifting networks of ideas and stories repeatedly coalescing around people, processes, and resources into focused discrete action in continguous and continuous OODA feedback loops absorbing and learning mistakes along the way. I had trouble reading this without falling into the cadence of Howl! by Allen Ginsberg.
    - yourapostasy 6y ago
      Thanks for introducing me to that, it was enjoyable to listen to Allen. [1] https://www.youtube.com/watch?v=MVGoY9gom50 https://www.youtube.com/watch?v=MVGoY9gom50
      - DoofusOfDeath 6y ago
        My pleasure :) But to my chagrin, I just realized that the reading cadence I had in mind wasn't Allen Ginsberg's, but instead Jack Kerouac's. [0] [0] https://youtu.be/3LLpNKo09Xk?t=197 https://youtu.be/3LLpNKo09Xk?t=197
        yourapostasy 6y ago
        Ha, that Beat Generation background music really sets the tone.
        DoofusOfDeath 6y ago
        Are you referring to the music that's (mostly?) Steve Allen's piano playing? Yeah, totally. I also never knew that Steve Allen was so good at piano. Before watching that video, all I knew about him was that he'd had a popular TV show.
  - mountainb 6y ago
    The US decided that it didn't like all the political disorder that came with managing a large proletariat. Instead, it decided to outsource the management of that proletariat to Asia and the 'global south.' Our proletariat instead was mostly liquidated and shifted itself into the service industry (not that amenable to labor organization) and the welfare/workfare rolls. There are so many things that the US would have to reform to become more competitive again, but we are so invested into the FIRE economy that it's not unlike the position of the southern states before the Civil War: they were completely invested into the infrastructure of slavery and could not contemplate an alternative economic system because of that. The US is wedded to an economy based on FIRE and Intellectual Property production, with the rest of the economy just in a support role. I'm not really a pro-organized-labor person, but I think that as a matter of national security we have to figure out a way to reform and compromise to get to the point to which we develop industry even if it is redundant due to globalization. The left needs to compromise on environmental protection, the rich need to compromise on NIMBYism, and the right needs to compromise on labor relations. Unfortunately none of this is on the table even as a point of discussion. Our politics is almost entirely consumed by insane gibberish babbling. This became very clear when COVID hit and there was no realistic prospect of spinning up significant industrial capacity to make in-demand goods like masks and filters. In the future, hostile countries will challenge and overtake the US in IP production (which is quite nebulous and based on legal control of markets anyway) and in finance as well. The US will be in a very weak negotiating position at that point.
ENOTTY 6y ago
Contrary to the article, AMD is not yet shipping 5nm in volume. (Rumors point to Zen 4 later in 2021.) Additionally, Intel works with ASML and other similar suppliers. Intel even owns a chunk of ASML.
- totalZero 6y ago
  I looked up Canon's and Nikon's lithography numbers yesterday and was shocked to see that they barely make any money off their lithography businesses, considering that both companies make DUV machinery. Although they don't have the street cred of ASML, they are important because (A) there's a shortage, and (B) the demand side of the machinery market needs to foster competition in order to keep ASML from gouging its customers. To go even further than your comment (with which I agree, 5nm isn't the center of AMD's income right now), TSMC isn't even making most of its wafer revenue from 5nm and 7nm. Straight from the horse's mouth (Wendell Huang, CFO): "Now, let's move on to the revenue by technology. 5-nanometer process technology contributed 20% of wafer revenue in the fourth quarter, while 7-nanometer and 16-nanometer contributed 29% and 13%, respectively. Advanced technologies, which are defined as 16-nanometer and below, accounted for 62% of wafer revenue. On a full-year basis, 5-nanometer revenue contribution came in at 8% of 2020 wafer revenue. 7-nanometer was 33% and 16-nanometer was 17%." https://www.fool.com/earnings/call-transcripts/2021/01/14/taiwan-semiconductor-manufacturing-company-limited/ https://www.fool.com/earnings/call-transcripts/2021/01/14/ta...
  - moonbug 6y ago
    they'll still be depreciating the newer fabs.
    - totalZero 6y ago
      Sure, but my understanding is that (assuming that you have a choice about how much depreciation expense to write down) from a tax perspective that's what you're supposed to do when your business is making money. It's also a form of P&L smoothing.
jeffbee 6y ago
Well I got down to the part where the author said that AMD never threatened Intel in the data center market and I closed the tab. AMD won entire generations of data center orders while Intel was flailing with Itanium and NetBurst.
- mhh__ 6y ago
  Speaking of Itanium, if the x86 dam has truly burst, I'd much rather see something more like the Itanium than RISC-V. Something new. It's a shame the Mill is so secretive, actually, they're design is rather nice.
  - sitkack 6y ago
    One of RISC-V's main goals is to be boring and extensible. Think if it as the control-plane core, or the EFI for a larger system. You would take RISC-V and use it drive your novel VLIW processor.
    - mhh__ 6y ago
      How? RISC-V will have to have memory model, for example, which will define some at least effective execution model. If you turn RISC-V into not RISC-V you might as well just start from scratch.
    - garethrowlands 6y ago
      Pretty sure you can't take RISC-V and use it to drive a Mill.
  - raverbashing 6y ago
    Nah I think the Itanic concept is dead in the water VLIW works (especially in the way it was done in Itanium - IIRC) when either your workload is too predictable or maybe if your compiler manages to be one order of magnitude smarter than it is today (even with llvm, etc) It seems even M1 prefers to reorder scalar operations than work with SIMD ops in some cases (this is one of its processors)
gorjusborg 6y ago
Totally reasonable argument, and I think most would be better off with an independent, US-based foundry. Unfortunately, I doubt that the US government functions well enough at this point to recognize the threat and overcome the influence Intel's money would wield against the effort.
- NortySpock 6y ago
  I thought GlobalFoundries was US based, and they have a fab in Vermont (and Germany and Singapore)
  - nicoburns 6y ago
    Yes, but GlobalFoundries have given up development on leading edge process nodes.
  - totalZero 6y ago
    It's a US company but it's owned by the Emirate of Abu Dhabi.
jjoonathan 6y ago
The "US manufacturing is actually stronger than ever" camp used to cook their books by over-weighting Intel profits. Hopefully this will be a wakeup call.
- colinmhayes 6y ago
  Manufacturing isn't an industry that the U.S. should be interested in currently. Wait until the entire factory can be automated and it will come back. Until then enjoy the cheaper goods provided by globalized labor.
totalZero 6y ago
> This is why Intel needs to be split in two. Yes, integrating design and manufacturing was the foundation of Intel’s moat for decades, but that integration has become a straight-jacket for both sides of the business. Intel’s designs are held back by the company’s struggles in manufacturing, while its manufacturing has an incentive problem. The only comparable data point says that this is a terrible idea. AMD spun out GlobalFoundries after a deep slide in their valuation, and the stock (as well as the company's reputation) remained in the doldrums for several years after that. Chipmaking is a big business and there are many advantages to vertical integration when both sides of the company function appropriately. If you own the fabs and there is a surge in demand (as we see now at the less extreme end of the lithography spectrum), your designs get preferential treatment. Intel's problem isn't the structure of the company, it's the execution. Swan was not originally intended as the permanent replacement to Krzanich[0], and it's a bit strange to draw conclusions about whether the company can steer away from the rocks when the new captain isn't even going to take the helm until the middle of next month. People are viewing Intel's suggestion that it may use TSMC's fabs for some products as a negative for Intel, but I just see it as a way to exert pressure on AMD's gross margin by putting some market demand pressure on the extreme end of the lithography spectrum (despite sustained demand in TSMC's HPC segment, TSMC's 7nm+ and 5nm are not the main driver of current semiconductor shortages). [0] https://www.engadget.com/2019-01-31-intel-gives-interim-ceo-robert-swan-the-full-time-job.html https://www.engadget.com/2019-01-31-intel-gives-interim-ceo-...
- garaetjjte 6y ago
  >The only comparable data point says that this is a terrible idea. Huh, I would say completely opposite thing. AMD wouldn't have survived if it kept trying to improve their own process instead of going to TSMC.
  - ZeroCool2u 6y ago
    The problem here is not the success of AMD after splitting, but the complete retreat of Global Foundries from the SOTA process node. If this happens again with an Intel split then we have only TSMC left, off the coast of mainland China in Taiwan, in the middle of a game of thermonuclear tug of war between the West and China. While Capitalism will likely be part of the solution, through subsidizes for Intel or some other form, it must take a back seat to preventing the scenario described above from becoming reality. We are on the brink of this happening already with so many people suggesting such a split and ignoring what happened to AMD and GF. The geopolitical ramifications of completely centralizing the only leading process node in such a sensitive area between the world's super powers cannot be understated. Full disclosure: I'm a shareholder in Intel, TSMC, and AMD.
mikewarot 6y ago
They could make a strategic investment in reconfigurable computing, and pivot around this, if they can survive long enough to profit from it.
ashtonkem 6y ago
I think one day we’re going to wake up and discover that AWS mostly runs on Graviton (ARM) and not x86. And on that day intel’s troubles will go from future to present. My standing theory is that the m1 will accelerate it. Obviously all the wholly managed AWS services (Dynamo, Kinesis, S3, etc.) can change over silently, but the issue is EC2. I have a MBP, as do all of my engineers. Within a few years all of these machines will age out and be replaced with m1 powered machines. At that point the idea of developing on ARM and deploying on x86 will be unpleasant, especially since Graviton 2 is already cheaper per compute unit than x86 is for some work loads; imagine what Graviton 3 & 4 will offer.
- mhh__ 6y ago
  I can see this happening for things that run in entirely managed environments but I don't think AWS can make the switch fully until that exact hardware is on people's benches. Doing microbenchmarking is quite awkward on the cloud, whereas anyone with a Linux laptop from the last 20 years can access PMCs for their hardware
  - ashtonkem 6y ago
    Professional laptops don’t last that long, and a lot of developers are given MBPs for their work. I personally expect that I’ll get a M1 laptop from my employer within the next 2 years. At that point the pressure to migrate from x86 to ARM will start to increase.
    - mhh__ 6y ago
      You miss my point - if I am seriously optimizing something I need to be on the same chip not the same ISA. Graviton2 is a Neoverse core from Arm and it's totally separate from M1. Besides, Apple don't let you play with PMCs easily and I'm assuming they won't be publishing any event tables any time soon so unless they get reverse engineered you'll have to do it through xcode.
      - ashtonkem 6y ago
klelatti 6y ago
Feel this piece ducks one of the most important questions - what is the future and value of x86 to Intel? For a long time x86 was one half of the moat but it feels like that moat is close to crumbling. Once that happens the value of the design part of the business will be much, much lower - especially if they have to compete with an on form AMD. Can they innovate their way out of this? Doesn't look entirely promising at the moment.
- mhh__ 6y ago
  It's worth saying that CPU design isn't like software. Intel and AMD cores are fairly different, and the ISA is the only thing that unites them. If X86 finally goes, and Intel and AMD both switched elsewhere we'd be seeing the same battle as usual but in different clothes. On top of the raw uarch design, there is also the peripherals and ram standard etc. etc.
  - klelatti 6y ago
    Fair points, but if you're saying that if we moved to a non-x86 (and presumably Arm based) world then its business as usual for Intel and AMD then I'd strongly disagree - it's a very different (and much less profitable) commercial environment with lots more competition.
    - mhh__ 6y ago
      The likelihood of Intel moving to ARM is probably nil. They have enough software to drag whatever ISA they choose with them, whereas AMD bringing up an ARM core could be fairly herculean as they have to convince their customers to not only buy their new chip but also trust AMD with a bunch of either missing or brand new software.
      - klelatti 6y ago
        The days when Intel could single handedly successfully introduce a new (incompatible) ISA are long gone (if it ever could). I expect they will stick with x86 for as long as possible.
darshanime 6y ago
C'mon Intel, this is your opportunity to go all in on RISC-V
- moonbug 6y ago
  why?
  - jfb 6y ago
    They're not losing money fast enough on x86?
    - mahkeiro 6y ago
      They are not loosing money....
ramoz 6y ago
A solution to yesterday's problems shouldn't discount tomorrow's innovations. I don't think iOS and Android are in the best long-term position. There's more things happening in our global infrastructure that should be accounted for. Internet is priming for a potential reverse/re- evolution of itself. (5G is a large factor for this).
hctaw 6y ago
Slightly more aggressive take: fully automated contract manufacturing is the future, those that resist its march will be trampled and those that ignore it will be left behind. Semiconductor manufacturing is just one example where this is happening, electronics is another. Maybe one day Toyota Auto fabs will be making Teslas.
Ericson2314 6y ago
Gosh, splitting (if not anti-trust at least pro-competition) then subsidies sounds like way too sane government planning for the US to actually do it.
sradman 6y ago
> Solution One: Breakup > Solution Two: Subsidies Solution Three: lower prices/margins (temporarily) to match the value proposition of AMD on Windows PCs and Linux Cloud servers.
- hakcermani 6y ago
  Solution Four: Is it even possible that Intel and AMD merge ?! With ARM based chips clearly accelerating and poised to take a big market share (Apple, Nvidia, Amazon, Qualcomm becoming major players) there is less of an antitrust issue ?
  - vinay_ys 6y ago
    It is more likely they will stick to their guns like IBM sticking with Power (which is technically awesome) but still pricing it too high (because cost economics is likely out of whack) and in the process they will lose developer mindshare. I really hope Intel does better than IBM with Power.
- twblalock 6y ago
  Intel needs to change the way it does business. Simply lowering prices won't achieve that. Becoming the cheap option is likely the beginning of a death spiral the company will never recover from -- it will give the company an excuse to double down on a failing strategy. Furthermore, AMD is not the biggest threat to Intel. The biggest threat is cloud providers like Amazon designing their own chips, which is already happening. If those succeed, who would build them? Certainly not Intel, if they continue to manufacture only their own designs -- that business, like so much other fab business, will go to TSMC.
  - sradman 6y ago
    > Becoming the cheap option is likely the beginning of a death spiral... Maybe. I didn't suggest becoming the cheap option I suggested re-evaluating its premium pricing strategy in the short-term to reflect current and future customer value. Margin stickiness seems to be a built-in bias similar to the sunk-costs fallacy. Server-side Neoverse is a threat but a slow-moving one. I'm assuming that "Breakup" (going fabless) will not show benefits for many months if not years. Price seems like an obvious lever; perhaps I'm being naive about pricing but it's not obvious to me why.
varispeed 6y ago
When I learned that allegedly Intel and nVidia were fixing the laptop market, I just hope that this company goes down or goes through a substantial transformation. Their current management situation is untenable. If I was a shareholder (fortunately I am no longer), I would pressure them to sack everyone involved.
kolbe 6y ago
If TSMC is going to be a monopolist fab for x86, then they will ultimately suck all the profits out of the server/desktop markets. This isn't just kinda bad news for Intel/AMD, it's really bad news.
thoughtsimple 6y ago
How does Moore's law figure into this? I suspect that TSMC runs into the wall that is quantum physics at around 1-2nm. Considering that TSMC has said that they will be in full production of 3nm in 2022, I can't see 1nm being much beyond 2026-2028. What happens then? Does a stall in die shrinks allow other fabs to catch up? It appears to me that Intel stalling at 14nm is what opened the door for TSMC and Samsung to catch up. Does the same thing happen in 2028 and allow China to finally catch up?
- kasperni 6y ago
  Jim Keller believes that at least 10-20 years of shrinking is possible [1]. [1] https://www.youtube.com/watch?v=Nb2tebYAaOA&t=1800 https://www.youtube.com/watch?v=Nb2tebYAaOA&t=1800
- jng 6y ago
  Modern process node designations (5nm, 3nm...) are not measurements any more, they are marketing terms. The actual measure of shrinking is a lot smaller than the name would mean to indicate, and not approaching the quantum limits as fast as it may seem.
  - chaorace 6y ago
    I did not know that! Though, that answer raises its own questions... If the two are entirely unlinked, what's stopping Intel from slapping "Now 3nm!" on their next gen processors? Surely some components must be at the advertised size, even if it's no longer a clear cut all-or-nothing descriptor, right? What's actually being sized down and why is it seemingly posing so many challenges for Intel's supply chain?
    - okl 6y ago
      There's a nice wiki where you can look up more detailed specs on the processes of each contender, e.g. 5nm: https://en.wikichip.org/wiki/5_nm_lithography_process https://en.wikichip.org/wiki/5_nm_lithography_process
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pcdoodle 6y ago
If intel made a SBC or SOC design for low power applications, I'd consider it if they had long term support. Intel used to power all of our edge needs in POS and Security, now I see that slipping as well.
darig 6y ago
If you want to write an article about how your article website has matured, maybe start with proofreading the first sentence.
JumpCrisscross 6y ago
> a federal subsidy program should operate as a purchase guarantee: the U.S. will buy A amount of U.S.-produced 5nm processors for B price; C amount of U.S. produced 3nm processors for D price; E amount of U.S. produced 2nm processors for F price; etc. I really like this concept, though I’d advocate for a straight subsidy (sales of American-made chips to a U.S.-registered and based buyer get $ credit, paid directly to the supplier and buyer, on proof of sale and proof of purchase) given the logistical issues of the U.S. government having a stockpile of cutting-edge chips it can’t dump on the market.
11thEarlOfMar 6y ago
A major incentive for the US government to get involved is touched on. Not only is Taiwan 'just off the coast' from China, China is coming for it and intends to assimilate Taiwan back into China just as Hong Kong and Macau have been. At that point, the only sustainable leverage the rest of the world would have in chip technology would be ASML.
- aluminussoma 6y ago
  It is thought provoking to think that the USA's interest in Taiwan is more about protecting TMSC than protecting a democratic state in East Asia. By this line of thinking, building capacity in Arizona, or anywhere outside Taiwan, is good for TMSC and for the USA but weakens Taiwan.
  - oblio 6y ago
    > It is thought provoking to think that the USA's interest in Taiwan is more about protecting TMSC than protecting a democratic state in East Asia. Why it though provoking? It's always realpolitik. All wars are. There's always a pretext but the subtext is what actually causes wars.
  - samus 6y ago
    Taiwan is also stategically important because it guards access from the Pacific to China and back. To the north there is Japan and South Korea (US allies), and to the south there are Vietnam and the Philippines, who already feel the pressure of the expansion of China's influence (Chinese military bases in the South China sea), and are thus likely to side with the US in the future. Right now, China is sorta contained, but if the CCP can reassert itself on Taiwan, the situation will flip and the CCP will have full control about access to the mainland from the sea, and can freely access the Pacific.
me551ah 6y ago
I wonder how the move from x86 to arm is going to affect desktop apps. With the move to ARM apple is already pushing it's iOS apps into MacOS. Once it becomes commonplace on Windows, it would be super easy to run Android Apps on Windows via simulation(rather than emulation which is much slower). Given that mobile apps are more lightweight and consume far less resources than their electron counterparts, would people prefer to use those instead? Especially if their UIs were updated to support larger desktop screens.
- deleted 6y ago
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- oblio 6y ago
  Why do you think mobile apps are more lightweight? Android phones these days have at least 4GB or RAM and mobile apps are in general more limited plus you run fewer of them in parallel as they tend to be offloaded from RAM once the limit is reached.
WoodenChair 6y ago
The thing about all of these articles analyzing Intel's problems is that nobody really knows the details of Intel's "problems" because it comes down to just one "problem" that we have no insight into: node size. What failures happened in Intel's engineering/engineering management of its fabs that led to it getting stuck at 14 nm? Only the people in charge of Intel's fabs know exactly what went wrong, and to my knowledge they're not talking. If Intel had kept chugging along and got down to 10 nm years ago when they first said they would, and then 7 nm by now, it wouldn't have any of these other problems. And we don't know exactly why that didn't happen.
- JoshTko 6y ago
  We actually have a lot of insight in that Intel still doesn't have a good grasp on the problem. Their 10nm was supposed to enter volume production in mid 2018, and they still haven't truly entered volume production today. Additionally Intel announced in July 2020 that their 7nm is delayed by at least a year which means they figured out their node delay problem.
  - WoodenChair 6y ago
    > We actually have a lot of insight in that Intel still doesn't have a good grasp on the problem. Their 10nm was supposed to enter volume production in mid 2018, and they still haven't truly entered volume production today. Additionally Intel announced in July 2020 that their 7nm is delayed by at least a year which means they figured out their node delay problem. Knowing something happened is not the same as knowing "why" it happened. That's the point of my comment. We don't know why they were not able to achieve volume production on 10 nm earlier.
    - okl 6y ago
      SemiAccurate has written a lot about the reasons, for me the essence from that was: complacency, unrealistic goals, they didn't have a plan B in case schedule slips.
    - mchusma 6y ago
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eutropia 6y ago
I worked at Intel in 2012 and 2013. Back then, we had a swag t-shirt that said "I've got x86 problems but ARM aint one". I went and dug that shirt out of a box and had a good laugh when Apple dropped the M1 macs. Back then, the company was confident that they could make the transition to EUV lithography and had marketing roadmaps out to 5nm...
gmmeyer 6y ago
This article seems to mix up AMD and ARM
trident5000 6y ago
A company that is being cannibalized by companies ripping the rug under them by developing their own chips, yet Intel makes no efforts to return the favor. They need to make an open source OS phone, maybe that will make a dent and serve as a carrier for the chips. They dont need to do all the work they can partner.
NoNameHaveI 6y ago
Companies that use millions of micros will grow tired of paying royalties for ARM & other IP. I'm putting my money on RISC-V. If Intel is smart, they will too and offer design customization and contract manufacturing of RISC-V.
ineedasername 6y ago
I found the geopolitical portion to be the most important aspect here. China has shown a willingness to flex its muscles on enforcing its values beyond their borders. China is smart, and plays a long game. We don't want to wake up one day and find they've flexed their muscles on their regional neighbors similar to their rare earths strong-arming from 2010-2014 and not have fab capabilities to fall back on in the West. (For that matter, I'm astounded that after 2014 the status quo returned on rare earths with very little state-level strategy or subsidy to address the risk there.)
- Spooky23 6y ago
  That’s a good comparison... CPUs are increasingly a commodity.
- okl 6y ago
  > [...] and not have fab capabilities to fall back on in the West. I'm not too concerned: - There are still a number of foundries in western countries that produce chips which are good enough for "military equipment". - Companies like TSMC are reliant on imports of specialized chemicals and tools mostly from Japan/USA/Europe. - Any move from China against Taiwan would likely be followed by significant emigration/"brain drain".
  - Lopiolis 6y ago
    The issue isn't just military equipment though. When your entire economy is reliant on electronic chips, it's untenable for all of those chips to come from a geopolitical opponent. That gives them a lot of influence over business and politics without having to impact military equipment.
  - ineedasername 6y ago
    National security doesn't just extend to direct military applications. Pretty much every industry and piece of critical infrastructure comes into play here. It won't matter if western fabs can produce something "good enough" if every piece of technological infrastructure from the past 5 years was built with something better. As for moves again at Taiwan, China hasn't given up that prize. Brain drain would be moot if China simply prevented emigration. I view Hong Kong right now as China testing the waters for future actions of that sort. Happily though I also view TSMC's pending build of a fab in Arizona as exactly that sort of geographical diversification of industrial and human resources necessary. We just need more of it.
phcordner 6y ago
> And in that planning the fact that TSMC’s foundries — and Samsung’s — are within easy reach of Chinese missiles is a major issue. Are processor fabs analagous to auto factories and shipyards in World War II? Is the United States military's plan for a nuclear exchange with China dependent on a steady supply of cutting edge semiconductors? Even if it is, is that strategy really going to help? This article is mostly concerened with Intel's stock price. Why bring this into it? Let's say Intel gets its mojo back and is producing cutting edge silicon at a level to compete with TSMC and supplying the Pentagon with all sorts of goodies... and then China nukes Taiwan? And now we cash in our Intel options just in time to see the flash and be projected as ash particles on a brick wall? "The U.S. needs cutting edge fabs on U.S. soil" is true only if you believe the falied assumptions of the blue team during the Millenium Challenge, that electronic superiority is directly related to battlefield superiority. If semiconductors are the key to winning a war, why hasn't the U.S. won one lately? And what does any of this have to do with Intel? Why are we dreaming up Dr. Strangelove scenarios? Is it just that some people are only comfortable with Keynesian stimulus if it's in the context of war procurement?
- tgtweak 6y ago
  I don't feel that there is a meaningful TSMC alternative today. Samsung, Intel and GlobalFoundries are not suitable replacements for TSMC with regards to throughput or technology. The world does need some meaningful fabs outside of Taiwan/South Korea. All of the <10nm semiconductor and most of the >10nm semiconductor fabrication takes place within a 750km/460mile radius circle today. That is risky. Israel, Mexico, Germany, Canada, Japan (not that it would grow the circle much...) are all viable places to run a foundry. The fact that Intel is one of the few outside that circle doesn't inspire confidence in the security of the global supply chain.
  - oblio 6y ago
    It doesn't even have to be war: https://en.wikipedia.org/wiki/2011_Thailand_floods#Damages_to_industrial_estates_and_global_supply_shortages https://en.wikipedia.org/wiki/2011_Thailand_floods#Damages_t...
  - 6y ago
iamgopal 6y ago
Solution three : Invest to make x86 to become power efficient to reach at par or better than arm counter part, while outsourcing manufacturing to TMSC to fill the gap. Reach to the level Future Apple M chip will achieve. At the same time, start building bare metal cloud hosting solutions that allow other companies to provide their own cloud solutions, ( and using energy efficiency at your advantage ), also use that energy efficiency to create mobile platform that can enable Mozilla and Ubuntu like provider to make operating syatem on.
billiam 6y ago
Though provoking, to be sure, but the problem with his solution of building up Intel's manufacturing arm through spinoff and subsidy is that we simply don't have the labor force to support it, and with much more controlled immigration in the future, it will take decades to build up the engineering education needed to make the US compete with Taiwan, South Korea, and of course China.
iamgopal 6y ago
The problem was created when they lost focus on energy efficiency. Rest is just after effect.
cbozeman 6y ago
This was a well-written article, but I don't think it came from someone with a deep understanding of semiconductor technology and fabrication. Intel hasn't lost to Apple and AMD because they employ idiots, or because of their shitty company culture (in fact, they're doing surprisingly well in spite of their awful company culture). Intel lost because they made the wrong bet on the wrong type of process technology. 10 years ago (or thereabouts), Intel's engineers were certain that they had the correct type of process technology outlined to successfully migrate down from 22nm to 14nm, then down to 10nm and eventually 7, 5, and 3nm. They were betting on future advances in physics, chemistry, and semiconductor processes. Advances that didn't materialize. EUV turned out to be the best way to make a wafer at lower transistor size. So now Intel's playing catch up. Their 10nm process is still error-prone and far from stable. There are no high-performance 10nm desktop or server chips. That's not going to continue forever though. Even on 14nm, Intel chips, while not as fast as Apple's M1 or AMD's Ryzen 5000 series, are still competitive in many areas. Intel's 14nm chips are over 6 years old. The first was Broadwell in October 2014. What do you think will happen when Intel solves the engineering problems on 10nm, and then 7nm? And then 5nm? It took AMD 5 years to become competitive with Intel, and over 5 to actually surpass them. If you think the M1 and 5950X are fast, then wait till we have an i9-14900K on 5nm. It'll make these offers look quaint by comparison. EDIT: I say this as a total AMD fanboy by the way, who bought a 3900X and RX 5700 XT at MicroCenter on 7/7/2019 and stood in line for almost five hours to get them, and as someone who now has a Threadripper 3990X workstation. I love AMD for what they've done... they took us out of the quad-core paradigm and brought us into the octa-core paradigm of x86 computing. But I am under no illusions that they're technically superior to Intel. Their process is what allows them to outperform Intel, not their design. I guarantee you that if Intel could mass produce their CPUs on their 7nm process (which is far, far more transistor dense than TSMC's 7nm), AMD would be 15-25% behind on performance. It isn't so much that AMD is succeeding because they're technically superior... they're succeeding because Zen's design team made the right bet and because Intel's engineering process team made the wrong bet.
- adrian_b 6y ago
  I agree with most of what you say, except that AMD was also technically superior during these last years. Intel certainly has the potential of being technically superior to AMD, but they do not appear to have focused on the right things in their roadmaps for CPU evolution. Many years before the launches of Ice Lake and Tiger Lake, the enthusiastic presentations of Intel about the future claimed that these will bring some sort of marvelous improvements in microarchitecture, but the reality has proven to be much more modest. While from Skylake in 2015 to Ice Lake in 2019 there was a decent increase in IPC, it was still much less than expected after so many years. While they were waiting for a manufacturing process, they should have redesigned their CPU cores to get something better than this. Moreover the enhancements in Ice Lake and Tiger Lake seem somewhat unbalanced and random, there is no grand plan that can be discerned about how to improve a CPU. On the other hand the evolution of Zen cores was perfect, every time the AMD team seems to have been able to add precisely all improvements that could give a maximum performance increase with a minimum implementation effort. Thus they were able to pass from Zen 1 (2017) with an IPC similar to Intel Broadwell (2014), to Zen 2 (2019) with an IPC a little higher than Intel Skylake (2015) and eventually to Zen 3 (2020) with an IPC a little higher than Intel Tiger Lake (2020). So even if the main advantage of AMD remains the superior CMOS technology they use from TSMC, just due to the competence of their design teams, they have passed from being 3 years behind Intel in IPC in 2017, to being ahead of Intel in IPC in 2020. If that is not technical superiority, I do not know what is. Like I have said, I believe that Intel could have done much better than that, but they seem to have done some sort of a random walk, instead of a directed run, like AMD.
m3kw9 6y ago
If individual companies developing their own chips is a trend, and it sure seem like it is starting to, intel has a lot more competition they have to contend with. Before is always a buy, now add build into the equation. That’s where intels problems are coming. That’s a lot of head winds, they can capture that by splitting and going the TSMC route, and specialize further on the design and use some form of licensing model like ARM. This is like the Microsoft pivot into cloud to save itself.
ncmncm 6y ago
It's time for more predictions. 1. Apple's CPUs will not improve anywhere near as fast as the competition. Computation per watt of (some) competitors' products will outpace Apple's in just a few years. 2. Intel will come roaring back on the back of TSMC, but first will need to wait on growth of manufacturing capacity, as certain competitors can get more money per mm^2. 3. Intel will fail to address its product-quality problem, but it will not end up hurting them.
toonies555 6y ago
Lets speed run a doomsday: 2022: share price tanks, ceo booted, they shuffle but dont have a plan, no longer blue chip so finance is hard to come by. delisting. everyone booted. doors close. 2023/4: AMD only game in town. profits and volumes up. so are the faults and vulnerabilities. They spend most of their effort in fixes and not innovation. 2024: M1 chip available on dells/hps/thinkpads. AWS only use Graviton unless customer specifically buys another chip. 2025: Desktop ARM chip available on dells/hps/thinkpads. 2025: AWS makes a 'compile-to-anything' service. decompiler and recompiler on demand. 2026: AMD still suffering. Hires Jim Keller for the 20th time. makes a new ZEN generation that beats M1 and Arm. AMD goes into mobile CPUs.
Causality1 6y ago
The funny thing is, in the time period being addressed first in the article (2013) Intel was better at mobile than it is now. Its Bay Trail and Cherry Trail chips had more performance per dollar than even today's offerings, eight years later. Intel just decided low-margin wasn't a concept in which they were interested.
z77dj3kl 6y ago
A question for those who've been around in tech longer: was Google really the first and "disruptive" user of x86 commodity hardware in datacenters that everyone else then lagged behind? Or was it just a general wave and shift in the landscape?
LockAndLol 6y ago
How does RISC factor into all of this? China is working on its own chips after Trump poked the bear. It wouldn't surprise me if, seemingly out of nowhere, they suddenly started promoting and selling RISC chips and compatible motherboards at competitive prices.
worik 6y ago
What was "the memory crash of 1984"?
- deleted 6y ago
  [deleted]
- totalZero 6y ago
  DRAM at one point in time accounted for over 90% of Intel’s sales revenue. The article states that DRAM was essentially the “technology driver” on which Intel’s learning curve depended. Over time the DRAM business matured as Japanese companies were able to involve equipment suppliers in the continuous improvement of the manufacturing process in each successive DRAM generation. Consequentially, top Japanese producers were able to reach production yields that were up to 40% higher than top U.S. companies. DRAMs essentially became a commodity product. Intel tried to maintain a competitive advantage and introduced several innovative technology design efforts with its next generation DRAM offerings. These products did not provide enough competitive advantage, thus the company lost its strategic position in the DRAM market over time. Intel declined from an 82.9% market share in 1974 to a paltry 1.3% share in 1984. Intel’s serendipitous and fortuitous entry into microprocessors happened when Busicom, a Japanese calculator company, contacted Intel for the development of a new chipset. Intel developed the microprocessor but the design was owned by Busicom. Legendary Intel employee Ted Hoff had the foresight to lobby top management to buy back the design for uses in non calculator devices. The microprocessor became an important source of sales revenue for Intel, eventually displacing DRAMs as the number one business. https://anthonysmoak.com/2016/03/27/andy-grove-and-intels-move-from-memory-to-microprocessors/ https://anthonysmoak.com/2016/03/27/andy-grove-and-intels-mo...
jonny_eh 6y ago
Every time a stratechery article is posted here I wonder how long it'll take before they reference a past article. It was the first sentence.

569 points by camillovisini 6y ago

Perhaps now the "Why do people obsess over manufacturing?" question that many tech workers ask when other US industries were decimated will become a bit less quizzical.

coldtea 6y ago
It only becomes less quizzical when it hits home -- that is when one's own job is on the line.
yourapostasy 6y ago
It was more economics and political policy wonks, economists and politicians in general, who didn't just ask that question, but thrust forth the prescriptive rhetoric through a large grid of trade agreements, "Globalism is here to stay! Get over it! Comparative Advantage!" This is only the first in a long, expensive series of lessons these people will be taught by reality in the coming decades. I'm guessing this kind of manufacturing loss will cost at least $1T to catch up and take the lead again after all is said and done, assuming the US can even take the lead. US organization, economic, and financial management at the macro scale is going through a kind of "architecture astronaut" multi-decade phase with financialization propping up abstracted processes of how to lead massive organizations as big blocks on diagrams instead of highly fractal, constantly shifting networks of ideas and stories repeatedly coalescing around people, processes, and resources into focused discrete action in continguous and continuous OODA feedback loops absorbing and learning mistakes along the way. Ideally, the expensive BA and INTC lessons drive home the urgent need for an evolution in organizational management. I wryly think how similar the national comparative advantage argument looks to much young adult science fiction portrayal of space opera galactic empire settings with entire worlds dedicated solely to one purpose. This world only produces agricultural goods. That world only provides academician services. It is a very human desire to simplify complex fractal realities, and effective modeling is one of our species' advantages, but at certain scales of size, agility and complexity it breaks down. We know this well in the software world; some problems are intrinsically hard and complex, and there is a baseline level of complexity the software must model to successfully assist with the problem space. Simplifying further past that point deteriorates the delivery.
- DoofusOfDeath 6y ago
  > financialization propping up abstracted processes of how to lead massive organizations as big blocks on diagrams instead of highly fractal, constantly shifting networks of ideas and stories repeatedly coalescing around people, processes, and resources into focused discrete action in continguous and continuous OODA feedback loops absorbing and learning mistakes along the way. I had trouble reading this without falling into the cadence of Howl! by Allen Ginsberg.
  - yourapostasy 6y ago
    Thanks for introducing me to that, it was enjoyable to listen to Allen. [1] https://www.youtube.com/watch?v=MVGoY9gom50 https://www.youtube.com/watch?v=MVGoY9gom50
    - DoofusOfDeath 6y ago
      My pleasure :) But to my chagrin, I just realized that the reading cadence I had in mind wasn't Allen Ginsberg's, but instead Jack Kerouac's. [0] [0] https://youtu.be/3LLpNKo09Xk?t=197 https://youtu.be/3LLpNKo09Xk?t=197
      - yourapostasy 6y ago
        Ha, that Beat Generation background music really sets the tone.
        DoofusOfDeath 6y ago
        Are you referring to the music that's (mostly?) Steve Allen's piano playing? Yeah, totally. I also never knew that Steve Allen was so good at piano. Before watching that video, all I knew about him was that he'd had a popular TV show.
- mountainb 6y ago
  The US decided that it didn't like all the political disorder that came with managing a large proletariat. Instead, it decided to outsource the management of that proletariat to Asia and the 'global south.' Our proletariat instead was mostly liquidated and shifted itself into the service industry (not that amenable to labor organization) and the welfare/workfare rolls. There are so many things that the US would have to reform to become more competitive again, but we are so invested into the FIRE economy that it's not unlike the position of the southern states before the Civil War: they were completely invested into the infrastructure of slavery and could not contemplate an alternative economic system because of that. The US is wedded to an economy based on FIRE and Intellectual Property production, with the rest of the economy just in a support role. I'm not really a pro-organized-labor person, but I think that as a matter of national security we have to figure out a way to reform and compromise to get to the point to which we develop industry even if it is redundant due to globalization. The left needs to compromise on environmental protection, the rich need to compromise on NIMBYism, and the right needs to compromise on labor relations. Unfortunately none of this is on the table even as a point of discussion. Our politics is almost entirely consumed by insane gibberish babbling. This became very clear when COVID hit and there was no realistic prospect of spinning up significant industrial capacity to make in-demand goods like masks and filters. In the future, hostile countries will challenge and overtake the US in IP production (which is quite nebulous and based on legal control of markets anyway) and in finance as well. The US will be in a very weak negotiating position at that point.

ENOTTY 6y ago

Contrary to the article, AMD is not yet shipping 5nm in volume. (Rumors point to Zen 4 later in 2021.) Additionally, Intel works with ASML and other similar suppliers. Intel even owns a chunk of ASML.

totalZero 6y ago
I looked up Canon's and Nikon's lithography numbers yesterday and was shocked to see that they barely make any money off their lithography businesses, considering that both companies make DUV machinery. Although they don't have the street cred of ASML, they are important because (A) there's a shortage, and (B) the demand side of the machinery market needs to foster competition in order to keep ASML from gouging its customers. To go even further than your comment (with which I agree, 5nm isn't the center of AMD's income right now), TSMC isn't even making most of its wafer revenue from 5nm and 7nm. Straight from the horse's mouth (Wendell Huang, CFO): "Now, let's move on to the revenue by technology. 5-nanometer process technology contributed 20% of wafer revenue in the fourth quarter, while 7-nanometer and 16-nanometer contributed 29% and 13%, respectively. Advanced technologies, which are defined as 16-nanometer and below, accounted for 62% of wafer revenue. On a full-year basis, 5-nanometer revenue contribution came in at 8% of 2020 wafer revenue. 7-nanometer was 33% and 16-nanometer was 17%." https://www.fool.com/earnings/call-transcripts/2021/01/14/taiwan-semiconductor-manufacturing-company-limited/ https://www.fool.com/earnings/call-transcripts/2021/01/14/ta...
- moonbug 6y ago
  they'll still be depreciating the newer fabs.
  - totalZero 6y ago
    Sure, but my understanding is that (assuming that you have a choice about how much depreciation expense to write down) from a tax perspective that's what you're supposed to do when your business is making money. It's also a form of P&L smoothing.

jeffbee 6y ago

Well I got down to the part where the author said that AMD never threatened Intel in the data center market and I closed the tab. AMD won entire generations of data center orders while Intel was flailing with Itanium and NetBurst.

mhh__ 6y ago
Speaking of Itanium, if the x86 dam has truly burst, I'd much rather see something more like the Itanium than RISC-V. Something new. It's a shame the Mill is so secretive, actually, they're design is rather nice.
- sitkack 6y ago
  One of RISC-V's main goals is to be boring and extensible. Think if it as the control-plane core, or the EFI for a larger system. You would take RISC-V and use it drive your novel VLIW processor.
  - mhh__ 6y ago
    How? RISC-V will have to have memory model, for example, which will define some at least effective execution model. If you turn RISC-V into not RISC-V you might as well just start from scratch.
  - garethrowlands 6y ago
    Pretty sure you can't take RISC-V and use it to drive a Mill.
- raverbashing 6y ago
  Nah I think the Itanic concept is dead in the water VLIW works (especially in the way it was done in Itanium - IIRC) when either your workload is too predictable or maybe if your compiler manages to be one order of magnitude smarter than it is today (even with llvm, etc) It seems even M1 prefers to reorder scalar operations than work with SIMD ops in some cases (this is one of its processors)

gorjusborg 6y ago

Totally reasonable argument, and I think most would be better off with an independent, US-based foundry. Unfortunately, I doubt that the US government functions well enough at this point to recognize the threat and overcome the influence Intel's money would wield against the effort.

NortySpock 6y ago
I thought GlobalFoundries was US based, and they have a fab in Vermont (and Germany and Singapore)
- nicoburns 6y ago
  Yes, but GlobalFoundries have given up development on leading edge process nodes.
- totalZero 6y ago
  It's a US company but it's owned by the Emirate of Abu Dhabi.

jjoonathan 6y ago

The "US manufacturing is actually stronger than ever" camp used to cook their books by over-weighting Intel profits. Hopefully this will be a wakeup call.

colinmhayes 6y ago
Manufacturing isn't an industry that the U.S. should be interested in currently. Wait until the entire factory can be automated and it will come back. Until then enjoy the cheaper goods provided by globalized labor.

totalZero 6y ago

> This is why Intel needs to be split in two. Yes, integrating design and manufacturing was the foundation of Intel’s moat for decades, but that integration has become a straight-jacket for both sides of the business. Intel’s designs are held back by the company’s struggles in manufacturing, while its manufacturing has an incentive problem. The only comparable data point says that this is a terrible idea. AMD spun out GlobalFoundries after a deep slide in their valuation, and the stock (as well as the company's reputation) remained in the doldrums for several years after that. Chipmaking is a big business and there are many advantages to vertical integration when both sides of the company function appropriately. If you own the fabs and there is a surge in demand (as we see now at the less extreme end of the lithography spectrum), your designs get preferential treatment. Intel's problem isn't the structure of the company, it's the execution. Swan was not originally intended as the permanent replacement to Krzanich[0], and it's a bit strange to draw conclusions about whether the company can steer away from the rocks when the new captain isn't even going to take the helm until the middle of next month. People are viewing Intel's suggestion that it may use TSMC's fabs for some products as a negative for Intel, but I just see it as a way to exert pressure on AMD's gross margin by putting some market demand pressure on the extreme end of the lithography spectrum (despite sustained demand in TSMC's HPC segment, TSMC's 7nm+ and 5nm are not the main driver of current semiconductor shortages). [0] https://www.engadget.com/2019-01-31-intel-gives-interim-ceo-robert-swan-the-full-time-job.html https://www.engadget.com/2019-01-31-intel-gives-interim-ceo-...

garaetjjte 6y ago
>The only comparable data point says that this is a terrible idea. Huh, I would say completely opposite thing. AMD wouldn't have survived if it kept trying to improve their own process instead of going to TSMC.
- ZeroCool2u 6y ago
  The problem here is not the success of AMD after splitting, but the complete retreat of Global Foundries from the SOTA process node. If this happens again with an Intel split then we have only TSMC left, off the coast of mainland China in Taiwan, in the middle of a game of thermonuclear tug of war between the West and China. While Capitalism will likely be part of the solution, through subsidizes for Intel or some other form, it must take a back seat to preventing the scenario described above from becoming reality. We are on the brink of this happening already with so many people suggesting such a split and ignoring what happened to AMD and GF. The geopolitical ramifications of completely centralizing the only leading process node in such a sensitive area between the world's super powers cannot be understated. Full disclosure: I'm a shareholder in Intel, TSMC, and AMD.

mikewarot 6y ago

They could make a strategic investment in reconfigurable computing, and pivot around this, if they can survive long enough to profit from it.

ashtonkem 6y ago

I think one day we’re going to wake up and discover that AWS mostly runs on Graviton (ARM) and not x86. And on that day intel’s troubles will go from future to present. My standing theory is that the m1 will accelerate it. Obviously all the wholly managed AWS services (Dynamo, Kinesis, S3, etc.) can change over silently, but the issue is EC2. I have a MBP, as do all of my engineers. Within a few years all of these machines will age out and be replaced with m1 powered machines. At that point the idea of developing on ARM and deploying on x86 will be unpleasant, especially since Graviton 2 is already cheaper per compute unit than x86 is for some work loads; imagine what Graviton 3 & 4 will offer.

mhh__ 6y ago
I can see this happening for things that run in entirely managed environments but I don't think AWS can make the switch fully until that exact hardware is on people's benches. Doing microbenchmarking is quite awkward on the cloud, whereas anyone with a Linux laptop from the last 20 years can access PMCs for their hardware
- ashtonkem 6y ago
  Professional laptops don’t last that long, and a lot of developers are given MBPs for their work. I personally expect that I’ll get a M1 laptop from my employer within the next 2 years. At that point the pressure to migrate from x86 to ARM will start to increase.
  - mhh__ 6y ago
    You miss my point - if I am seriously optimizing something I need to be on the same chip not the same ISA. Graviton2 is a Neoverse core from Arm and it's totally separate from M1. Besides, Apple don't let you play with PMCs easily and I'm assuming they won't be publishing any event tables any time soon so unless they get reverse engineered you'll have to do it through xcode.
    - ashtonkem 6y ago

klelatti 6y ago

Feel this piece ducks one of the most important questions - what is the future and value of x86 to Intel? For a long time x86 was one half of the moat but it feels like that moat is close to crumbling. Once that happens the value of the design part of the business will be much, much lower - especially if they have to compete with an on form AMD. Can they innovate their way out of this? Doesn't look entirely promising at the moment.

mhh__ 6y ago
It's worth saying that CPU design isn't like software. Intel and AMD cores are fairly different, and the ISA is the only thing that unites them. If X86 finally goes, and Intel and AMD both switched elsewhere we'd be seeing the same battle as usual but in different clothes. On top of the raw uarch design, there is also the peripherals and ram standard etc. etc.
- klelatti 6y ago
  Fair points, but if you're saying that if we moved to a non-x86 (and presumably Arm based) world then its business as usual for Intel and AMD then I'd strongly disagree - it's a very different (and much less profitable) commercial environment with lots more competition.
  - mhh__ 6y ago
    The likelihood of Intel moving to ARM is probably nil. They have enough software to drag whatever ISA they choose with them, whereas AMD bringing up an ARM core could be fairly herculean as they have to convince their customers to not only buy their new chip but also trust AMD with a bunch of either missing or brand new software.
    - klelatti 6y ago
      The days when Intel could single handedly successfully introduce a new (incompatible) ISA are long gone (if it ever could). I expect they will stick with x86 for as long as possible.

darshanime 6y ago

C'mon Intel, this is your opportunity to go all in on RISC-V

moonbug 6y ago
why?
- jfb 6y ago
  They're not losing money fast enough on x86?
  - mahkeiro 6y ago
    They are not loosing money....

ramoz 6y ago

A solution to yesterday's problems shouldn't discount tomorrow's innovations. I don't think iOS and Android are in the best long-term position. There's more things happening in our global infrastructure that should be accounted for. Internet is priming for a potential reverse/re- evolution of itself. (5G is a large factor for this).

hctaw 6y ago

Slightly more aggressive take: fully automated contract manufacturing is the future, those that resist its march will be trampled and those that ignore it will be left behind. Semiconductor manufacturing is just one example where this is happening, electronics is another. Maybe one day Toyota Auto fabs will be making Teslas.

Ericson2314 6y ago

Gosh, splitting (if not anti-trust at least pro-competition) then subsidies sounds like way too sane government planning for the US to actually do it.

sradman 6y ago

> Solution One: Breakup > Solution Two: Subsidies Solution Three: lower prices/margins (temporarily) to match the value proposition of AMD on Windows PCs and Linux Cloud servers.

hakcermani 6y ago
Solution Four: Is it even possible that Intel and AMD merge ?! With ARM based chips clearly accelerating and poised to take a big market share (Apple, Nvidia, Amazon, Qualcomm becoming major players) there is less of an antitrust issue ?
- vinay_ys 6y ago
  It is more likely they will stick to their guns like IBM sticking with Power (which is technically awesome) but still pricing it too high (because cost economics is likely out of whack) and in the process they will lose developer mindshare. I really hope Intel does better than IBM with Power.
twblalock 6y ago
Intel needs to change the way it does business. Simply lowering prices won't achieve that. Becoming the cheap option is likely the beginning of a death spiral the company will never recover from -- it will give the company an excuse to double down on a failing strategy. Furthermore, AMD is not the biggest threat to Intel. The biggest threat is cloud providers like Amazon designing their own chips, which is already happening. If those succeed, who would build them? Certainly not Intel, if they continue to manufacture only their own designs -- that business, like so much other fab business, will go to TSMC.
- sradman 6y ago
  > Becoming the cheap option is likely the beginning of a death spiral... Maybe. I didn't suggest becoming the cheap option I suggested re-evaluating its premium pricing strategy in the short-term to reflect current and future customer value. Margin stickiness seems to be a built-in bias similar to the sunk-costs fallacy. Server-side Neoverse is a threat but a slow-moving one. I'm assuming that "Breakup" (going fabless) will not show benefits for many months if not years. Price seems like an obvious lever; perhaps I'm being naive about pricing but it's not obvious to me why.

varispeed 6y ago

When I learned that allegedly Intel and nVidia were fixing the laptop market, I just hope that this company goes down or goes through a substantial transformation. Their current management situation is untenable. If I was a shareholder (fortunately I am no longer), I would pressure them to sack everyone involved.

kolbe 6y ago

If TSMC is going to be a monopolist fab for x86, then they will ultimately suck all the profits out of the server/desktop markets. This isn't just kinda bad news for Intel/AMD, it's really bad news.

thoughtsimple 6y ago

How does Moore's law figure into this? I suspect that TSMC runs into the wall that is quantum physics at around 1-2nm. Considering that TSMC has said that they will be in full production of 3nm in 2022, I can't see 1nm being much beyond 2026-2028. What happens then? Does a stall in die shrinks allow other fabs to catch up? It appears to me that Intel stalling at 14nm is what opened the door for TSMC and Samsung to catch up. Does the same thing happen in 2028 and allow China to finally catch up?

kasperni 6y ago
Jim Keller believes that at least 10-20 years of shrinking is possible [1]. [1] https://www.youtube.com/watch?v=Nb2tebYAaOA&t=1800 https://www.youtube.com/watch?v=Nb2tebYAaOA&t=1800
jng 6y ago
Modern process node designations (5nm, 3nm...) are not measurements any more, they are marketing terms. The actual measure of shrinking is a lot smaller than the name would mean to indicate, and not approaching the quantum limits as fast as it may seem.
- chaorace 6y ago
  I did not know that! Though, that answer raises its own questions... If the two are entirely unlinked, what's stopping Intel from slapping "Now 3nm!" on their next gen processors? Surely some components must be at the advertised size, even if it's no longer a clear cut all-or-nothing descriptor, right? What's actually being sized down and why is it seemingly posing so many challenges for Intel's supply chain?
  - okl 6y ago
    There's a nice wiki where you can look up more detailed specs on the processes of each contender, e.g. 5nm: https://en.wikichip.org/wiki/5_nm_lithography_process https://en.wikichip.org/wiki/5_nm_lithography_process

deleted 6y ago

[deleted]

pcdoodle 6y ago

If intel made a SBC or SOC design for low power applications, I'd consider it if they had long term support. Intel used to power all of our edge needs in POS and Security, now I see that slipping as well.

darig 6y ago

If you want to write an article about how your article website has matured, maybe start with proofreading the first sentence.

JumpCrisscross 6y ago

> a federal subsidy program should operate as a purchase guarantee: the U.S. will buy A amount of U.S.-produced 5nm processors for B price; C amount of U.S. produced 3nm processors for D price; E amount of U.S. produced 2nm processors for F price; etc. I really like this concept, though I’d advocate for a straight subsidy (sales of American-made chips to a U.S.-registered and based buyer get $ credit, paid directly to the supplier and buyer, on proof of sale and proof of purchase) given the logistical issues of the U.S. government having a stockpile of cutting-edge chips it can’t dump on the market.

11thEarlOfMar 6y ago

A major incentive for the US government to get involved is touched on. Not only is Taiwan 'just off the coast' from China, China is coming for it and intends to assimilate Taiwan back into China just as Hong Kong and Macau have been. At that point, the only sustainable leverage the rest of the world would have in chip technology would be ASML.

aluminussoma 6y ago
It is thought provoking to think that the USA's interest in Taiwan is more about protecting TMSC than protecting a democratic state in East Asia. By this line of thinking, building capacity in Arizona, or anywhere outside Taiwan, is good for TMSC and for the USA but weakens Taiwan.
- oblio 6y ago
  > It is thought provoking to think that the USA's interest in Taiwan is more about protecting TMSC than protecting a democratic state in East Asia. Why it though provoking? It's always realpolitik. All wars are. There's always a pretext but the subtext is what actually causes wars.
- samus 6y ago
  Taiwan is also stategically important because it guards access from the Pacific to China and back. To the north there is Japan and South Korea (US allies), and to the south there are Vietnam and the Philippines, who already feel the pressure of the expansion of China's influence (Chinese military bases in the South China sea), and are thus likely to side with the US in the future. Right now, China is sorta contained, but if the CCP can reassert itself on Taiwan, the situation will flip and the CCP will have full control about access to the mainland from the sea, and can freely access the Pacific.

me551ah 6y ago

I wonder how the move from x86 to arm is going to affect desktop apps. With the move to ARM apple is already pushing it's iOS apps into MacOS. Once it becomes commonplace on Windows, it would be super easy to run Android Apps on Windows via simulation(rather than emulation which is much slower). Given that mobile apps are more lightweight and consume far less resources than their electron counterparts, would people prefer to use those instead? Especially if their UIs were updated to support larger desktop screens.

deleted 6y ago
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oblio 6y ago
Why do you think mobile apps are more lightweight? Android phones these days have at least 4GB or RAM and mobile apps are in general more limited plus you run fewer of them in parallel as they tend to be offloaded from RAM once the limit is reached.

WoodenChair 6y ago

The thing about all of these articles analyzing Intel's problems is that nobody really knows the details of Intel's "problems" because it comes down to just one "problem" that we have no insight into: node size. What failures happened in Intel's engineering/engineering management of its fabs that led to it getting stuck at 14 nm? Only the people in charge of Intel's fabs know exactly what went wrong, and to my knowledge they're not talking. If Intel had kept chugging along and got down to 10 nm years ago when they first said they would, and then 7 nm by now, it wouldn't have any of these other problems. And we don't know exactly why that didn't happen.

JoshTko 6y ago
We actually have a lot of insight in that Intel still doesn't have a good grasp on the problem. Their 10nm was supposed to enter volume production in mid 2018, and they still haven't truly entered volume production today. Additionally Intel announced in July 2020 that their 7nm is delayed by at least a year which means they figured out their node delay problem.
- WoodenChair 6y ago
  > We actually have a lot of insight in that Intel still doesn't have a good grasp on the problem. Their 10nm was supposed to enter volume production in mid 2018, and they still haven't truly entered volume production today. Additionally Intel announced in July 2020 that their 7nm is delayed by at least a year which means they figured out their node delay problem. Knowing something happened is not the same as knowing "why" it happened. That's the point of my comment. We don't know why they were not able to achieve volume production on 10 nm earlier.
  - okl 6y ago
    SemiAccurate has written a lot about the reasons, for me the essence from that was: complacency, unrealistic goals, they didn't have a plan B in case schedule slips.
  - mchusma 6y ago

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eutropia 6y ago

I worked at Intel in 2012 and 2013. Back then, we had a swag t-shirt that said "I've got x86 problems but ARM aint one". I went and dug that shirt out of a box and had a good laugh when Apple dropped the M1 macs. Back then, the company was confident that they could make the transition to EUV lithography and had marketing roadmaps out to 5nm...

gmmeyer 6y ago

This article seems to mix up AMD and ARM

trident5000 6y ago

A company that is being cannibalized by companies ripping the rug under them by developing their own chips, yet Intel makes no efforts to return the favor. They need to make an open source OS phone, maybe that will make a dent and serve as a carrier for the chips. They dont need to do all the work they can partner.

NoNameHaveI 6y ago

Companies that use millions of micros will grow tired of paying royalties for ARM & other IP. I'm putting my money on RISC-V. If Intel is smart, they will too and offer design customization and contract manufacturing of RISC-V.

ineedasername 6y ago

I found the geopolitical portion to be the most important aspect here. China has shown a willingness to flex its muscles on enforcing its values beyond their borders. China is smart, and plays a long game. We don't want to wake up one day and find they've flexed their muscles on their regional neighbors similar to their rare earths strong-arming from 2010-2014 and not have fab capabilities to fall back on in the West. (For that matter, I'm astounded that after 2014 the status quo returned on rare earths with very little state-level strategy or subsidy to address the risk there.)

Spooky23 6y ago
That’s a good comparison... CPUs are increasingly a commodity.
okl 6y ago
> [...] and not have fab capabilities to fall back on in the West. I'm not too concerned: - There are still a number of foundries in western countries that produce chips which are good enough for "military equipment". - Companies like TSMC are reliant on imports of specialized chemicals and tools mostly from Japan/USA/Europe. - Any move from China against Taiwan would likely be followed by significant emigration/"brain drain".
- Lopiolis 6y ago
  The issue isn't just military equipment though. When your entire economy is reliant on electronic chips, it's untenable for all of those chips to come from a geopolitical opponent. That gives them a lot of influence over business and politics without having to impact military equipment.
- ineedasername 6y ago
  National security doesn't just extend to direct military applications. Pretty much every industry and piece of critical infrastructure comes into play here. It won't matter if western fabs can produce something "good enough" if every piece of technological infrastructure from the past 5 years was built with something better. As for moves again at Taiwan, China hasn't given up that prize. Brain drain would be moot if China simply prevented emigration. I view Hong Kong right now as China testing the waters for future actions of that sort. Happily though I also view TSMC's pending build of a fab in Arizona as exactly that sort of geographical diversification of industrial and human resources necessary. We just need more of it.

phcordner 6y ago

> And in that planning the fact that TSMC’s foundries — and Samsung’s — are within easy reach of Chinese missiles is a major issue. Are processor fabs analagous to auto factories and shipyards in World War II? Is the United States military's plan for a nuclear exchange with China dependent on a steady supply of cutting edge semiconductors? Even if it is, is that strategy really going to help? This article is mostly concerened with Intel's stock price. Why bring this into it? Let's say Intel gets its mojo back and is producing cutting edge silicon at a level to compete with TSMC and supplying the Pentagon with all sorts of goodies... and then China nukes Taiwan? And now we cash in our Intel options just in time to see the flash and be projected as ash particles on a brick wall? "The U.S. needs cutting edge fabs on U.S. soil" is true only if you believe the falied assumptions of the blue team during the Millenium Challenge, that electronic superiority is directly related to battlefield superiority. If semiconductors are the key to winning a war, why hasn't the U.S. won one lately? And what does any of this have to do with Intel? Why are we dreaming up Dr. Strangelove scenarios? Is it just that some people are only comfortable with Keynesian stimulus if it's in the context of war procurement?

tgtweak 6y ago
I don't feel that there is a meaningful TSMC alternative today. Samsung, Intel and GlobalFoundries are not suitable replacements for TSMC with regards to throughput or technology. The world does need some meaningful fabs outside of Taiwan/South Korea. All of the <10nm semiconductor and most of the >10nm semiconductor fabrication takes place within a 750km/460mile radius circle today. That is risky. Israel, Mexico, Germany, Canada, Japan (not that it would grow the circle much...) are all viable places to run a foundry. The fact that Intel is one of the few outside that circle doesn't inspire confidence in the security of the global supply chain.
- oblio 6y ago
  It doesn't even have to be war: https://en.wikipedia.org/wiki/2011_Thailand_floods#Damages_to_industrial_estates_and_global_supply_shortages https://en.wikipedia.org/wiki/2011_Thailand_floods#Damages_t...
- 6y ago

iamgopal 6y ago

Solution three : Invest to make x86 to become power efficient to reach at par or better than arm counter part, while outsourcing manufacturing to TMSC to fill the gap. Reach to the level Future Apple M chip will achieve. At the same time, start building bare metal cloud hosting solutions that allow other companies to provide their own cloud solutions, ( and using energy efficiency at your advantage ), also use that energy efficiency to create mobile platform that can enable Mozilla and Ubuntu like provider to make operating syatem on.

billiam 6y ago

Though provoking, to be sure, but the problem with his solution of building up Intel's manufacturing arm through spinoff and subsidy is that we simply don't have the labor force to support it, and with much more controlled immigration in the future, it will take decades to build up the engineering education needed to make the US compete with Taiwan, South Korea, and of course China.

iamgopal 6y ago

The problem was created when they lost focus on energy efficiency. Rest is just after effect.

cbozeman 6y ago

This was a well-written article, but I don't think it came from someone with a deep understanding of semiconductor technology and fabrication. Intel hasn't lost to Apple and AMD because they employ idiots, or because of their shitty company culture (in fact, they're doing surprisingly well in spite of their awful company culture). Intel lost because they made the wrong bet on the wrong type of process technology. 10 years ago (or thereabouts), Intel's engineers were certain that they had the correct type of process technology outlined to successfully migrate down from 22nm to 14nm, then down to 10nm and eventually 7, 5, and 3nm. They were betting on future advances in physics, chemistry, and semiconductor processes. Advances that didn't materialize. EUV turned out to be the best way to make a wafer at lower transistor size. So now Intel's playing catch up. Their 10nm process is still error-prone and far from stable. There are no high-performance 10nm desktop or server chips. That's not going to continue forever though. Even on 14nm, Intel chips, while not as fast as Apple's M1 or AMD's Ryzen 5000 series, are still competitive in many areas. Intel's 14nm chips are over 6 years old. The first was Broadwell in October 2014. What do you think will happen when Intel solves the engineering problems on 10nm, and then 7nm? And then 5nm? It took AMD 5 years to become competitive with Intel, and over 5 to actually surpass them. If you think the M1 and 5950X are fast, then wait till we have an i9-14900K on 5nm. It'll make these offers look quaint by comparison. EDIT: I say this as a total AMD fanboy by the way, who bought a 3900X and RX 5700 XT at MicroCenter on 7/7/2019 and stood in line for almost five hours to get them, and as someone who now has a Threadripper 3990X workstation. I love AMD for what they've done... they took us out of the quad-core paradigm and brought us into the octa-core paradigm of x86 computing. But I am under no illusions that they're technically superior to Intel. Their process is what allows them to outperform Intel, not their design. I guarantee you that if Intel could mass produce their CPUs on their 7nm process (which is far, far more transistor dense than TSMC's 7nm), AMD would be 15-25% behind on performance. It isn't so much that AMD is succeeding because they're technically superior... they're succeeding because Zen's design team made the right bet and because Intel's engineering process team made the wrong bet.

adrian_b 6y ago
I agree with most of what you say, except that AMD was also technically superior during these last years. Intel certainly has the potential of being technically superior to AMD, but they do not appear to have focused on the right things in their roadmaps for CPU evolution. Many years before the launches of Ice Lake and Tiger Lake, the enthusiastic presentations of Intel about the future claimed that these will bring some sort of marvelous improvements in microarchitecture, but the reality has proven to be much more modest. While from Skylake in 2015 to Ice Lake in 2019 there was a decent increase in IPC, it was still much less than expected after so many years. While they were waiting for a manufacturing process, they should have redesigned their CPU cores to get something better than this. Moreover the enhancements in Ice Lake and Tiger Lake seem somewhat unbalanced and random, there is no grand plan that can be discerned about how to improve a CPU. On the other hand the evolution of Zen cores was perfect, every time the AMD team seems to have been able to add precisely all improvements that could give a maximum performance increase with a minimum implementation effort. Thus they were able to pass from Zen 1 (2017) with an IPC similar to Intel Broadwell (2014), to Zen 2 (2019) with an IPC a little higher than Intel Skylake (2015) and eventually to Zen 3 (2020) with an IPC a little higher than Intel Tiger Lake (2020). So even if the main advantage of AMD remains the superior CMOS technology they use from TSMC, just due to the competence of their design teams, they have passed from being 3 years behind Intel in IPC in 2017, to being ahead of Intel in IPC in 2020. If that is not technical superiority, I do not know what is. Like I have said, I believe that Intel could have done much better than that, but they seem to have done some sort of a random walk, instead of a directed run, like AMD.

m3kw9 6y ago

If individual companies developing their own chips is a trend, and it sure seem like it is starting to, intel has a lot more competition they have to contend with. Before is always a buy, now add build into the equation. That’s where intels problems are coming. That’s a lot of head winds, they can capture that by splitting and going the TSMC route, and specialize further on the design and use some form of licensing model like ARM. This is like the Microsoft pivot into cloud to save itself.

ncmncm 6y ago

It's time for more predictions. 1. Apple's CPUs will not improve anywhere near as fast as the competition. Computation per watt of (some) competitors' products will outpace Apple's in just a few years. 2. Intel will come roaring back on the back of TSMC, but first will need to wait on growth of manufacturing capacity, as certain competitors can get more money per mm^2. 3. Intel will fail to address its product-quality problem, but it will not end up hurting them.

toonies555 6y ago

Lets speed run a doomsday: 2022: share price tanks, ceo booted, they shuffle but dont have a plan, no longer blue chip so finance is hard to come by. delisting. everyone booted. doors close. 2023/4: AMD only game in town. profits and volumes up. so are the faults and vulnerabilities. They spend most of their effort in fixes and not innovation. 2024: M1 chip available on dells/hps/thinkpads. AWS only use Graviton unless customer specifically buys another chip. 2025: Desktop ARM chip available on dells/hps/thinkpads. 2025: AWS makes a 'compile-to-anything' service. decompiler and recompiler on demand. 2026: AMD still suffering. Hires Jim Keller for the 20th time. makes a new ZEN generation that beats M1 and Arm. AMD goes into mobile CPUs.

Causality1 6y ago

The funny thing is, in the time period being addressed first in the article (2013) Intel was better at mobile than it is now. Its Bay Trail and Cherry Trail chips had more performance per dollar than even today's offerings, eight years later. Intel just decided low-margin wasn't a concept in which they were interested.

z77dj3kl 6y ago

A question for those who've been around in tech longer: was Google really the first and "disruptive" user of x86 commodity hardware in datacenters that everyone else then lagged behind? Or was it just a general wave and shift in the landscape?

LockAndLol 6y ago

How does RISC factor into all of this? China is working on its own chips after Trump poked the bear. It wouldn't surprise me if, seemingly out of nowhere, they suddenly started promoting and selling RISC chips and compatible motherboards at competitive prices.

worik 6y ago

What was "the memory crash of 1984"?

deleted 6y ago
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totalZero 6y ago
DRAM at one point in time accounted for over 90% of Intel’s sales revenue. The article states that DRAM was essentially the “technology driver” on which Intel’s learning curve depended. Over time the DRAM business matured as Japanese companies were able to involve equipment suppliers in the continuous improvement of the manufacturing process in each successive DRAM generation. Consequentially, top Japanese producers were able to reach production yields that were up to 40% higher than top U.S. companies. DRAMs essentially became a commodity product. Intel tried to maintain a competitive advantage and introduced several innovative technology design efforts with its next generation DRAM offerings. These products did not provide enough competitive advantage, thus the company lost its strategic position in the DRAM market over time. Intel declined from an 82.9% market share in 1974 to a paltry 1.3% share in 1984. Intel’s serendipitous and fortuitous entry into microprocessors happened when Busicom, a Japanese calculator company, contacted Intel for the development of a new chipset. Intel developed the microprocessor but the design was owned by Busicom. Legendary Intel employee Ted Hoff had the foresight to lobby top management to buy back the design for uses in non calculator devices. The microprocessor became an important source of sales revenue for Intel, eventually displacing DRAMs as the number one business. https://anthonysmoak.com/2016/03/27/andy-grove-and-intels-move-from-memory-to-microprocessors/ https://anthonysmoak.com/2016/03/27/andy-grove-and-intels-mo...

jonny_eh 6y ago

Every time a stratechery article is posted here I wonder how long it'll take before they reference a past article. It was the first sentence.