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Intel’s New IDM 2.0 Strategy
- amelius 6y ago> Today Intel will be announcing a $20 billion (USD) investment in two new manufacturing facilities If Microsoft can pay $10B to buy Discord, then can't Intel pay like $100B to get back on top of the semiconductor game?
- wmf 6y agoProbably not. In retrospect Intel probably could have avoided their 10 nm problems by developing multiple 10 nm variants in parallel but it's not clear that there is even enough hireable talent to do that.
- greggyb 6y agoThere is enough hireable talent. Samsung is producing 8nm at volume, and TSMC 7nm, with Apple reserving all of the upcoming 5nm. Clearly the talent is there to support multiple cutting edge nodes developed in parallel. Whether Intel could afford to hire multiple teams like that is a different question.
- fomine3 6y agoThen CPU team also need to develop multiple designs to fit multiple 10nm process candidates.
- ykl 6y agoMicrosoft has 6x the cash on hand compared to Intel, 7x the market cap, and roughly 3.5x less debt-as-a-percentage-of-market-cap. $100 billion is nearly 40% of Intel's total market cap; $10 billion is less than half of a percent of Microsoft's total market cap. Basically, Microsoft is just much much bigger and has much much more cash on hand and much much more ability to raise debt compared to Intel. All of these factors mean that relatively speaking, $10 billion to Microsoft is a sum that would barely even make a blip on their annual results; $100 billion is life-or-death for Intel. I don't think it's clear that Intel would even be able to scrounge up $100 billion if they had to.
- amelius 6y agoThis makes me wonder why Microsoft doesn't invest more in semiconductor tech. Microsoft and Intel's interests are very much aligned, and they have a common competitor (Apple) who is ahead of them both.
- nightowl_games 6y agoI've been theorizing that Microsoft could get involved in the move to build a high end fab stateside, mostly cause they are already well integrated in the military industrial complex.
- buu700 6y agoAlternatively, Microsoft could acquire the x86 business from Intel and then invest in Intel as a dedicated foundry. Although, that raises the question of whether MS would be better off staying married to x86 long-term or moving in the direction of Apple Silicon / Rosetta. I'm inclined to think that they would be best served by sticking with x86 long-term for the sake of optimal backwards-compatibility, so long as there isn't some inherent reason for the x86 instruction set to be dramatically less efficient than ARM. I don't see why they couldn't ultimately catch up to or at least become competitive with Apple by pushing development and adoption of x86 SOCs alongside standards like Evo, which their taking over the business could potentially help accelerate.
- ralfd 6y agoApple has at best 10% market share in personal computers. Microsoft has a monopoly; a move into Microsoft Silicon would invite anti-trust scrutiny.
- dstaley 6y agoIf you stretch the definition of "personal computers", Apple actually has about 45% of the market in the US. Microsoft only has 30%.[1] [1] https://gs.statcounter.com/os-market-share/all/united-states-of-america https://gs.statcounter.com/os-market-share/all/united-states...
- RcouF1uZ4gsC 6y agoHopefully Gelsinger will be to Intel what Nadella was to Microsoft. Both are engineers following finance people who while they still made a lot of money, lost the tech initiative. I would love to see a 3 way competition between Intel, AMD, and Apple for consumer chips.
- ncw96 6y agoI’d expect to see Qualcomm in the mix as well, at least for laptop chips.
- nicoburns 6y agoAnd indeed a continuing 3 way competition between TSMC, Samsung and Intel for actually fabricating the chips.
- adamcstephens 6y agoI wouldn’t put Apple in the same category. They’ll never sell chips except as part of their vertically integrated systems.
- ISL 6y agoEven if they remain vertically-integrated, if they can sell an Apple datacenter blade or produce bespoke architectures for major cloud providers, the market is large -- Apple-scale.
- bryanlarsen 6y agoHopefully the foundry business works this time. A TSMC monopoly would suck.
- greggyb 6y agoSamsung, Global Foundries, UMC, and SMIC are other large players in the foundry space. It would be very difficult for TSMC to eliminate these competitors.
- 55873445216111 6y agoAmong these only Samsung and TSMC have 7/5nm in production. GF and UMC aren't even pursuing it. SMIC is far behind.
- greggyb 6y agoIntel has proven for the last 4 or so years that a mature 14nm node can be competitive with <=10nm nodes. Progress in chip manufacturing doesn't happen exclusively at the node size of the cutting edge. As the manufacturing technology matures, I'm sure we'll see advances across all the major foundries, even if they aren't all competing to be the first to a new node. And the fact that all of these foundries remain in business is a strong indicator that perhaps the most expensive, most cutting edge manufacturing process is not optimal for every single chip manufactured.
- krastanov 6y agoSome of these foundries explicitly do not compete on cutting edge node-sizes. Global Foundries, for instance, have said they will focus on specialty circuitry, but will not try to compete on things like <10nm node sizes. I think it is fair to say they are not really competitors as their business is sufficiently different.
- jorvi 6y agoDidn't GlobalFoundries state they would skip 7/5nm and directly jump to whatever node would be below that?
- cjdell 6y agoI wonder if Intel would allow AMD to build chips using their fabs. That'll be interesting to see. I believe it happened once before in the early days.
- trynumber9 6y agoFoundry service seems like a good idea. 14nm may be a bit long in the tooth for modern phones, laptops, servers but it would be a cutting edge process for most embedded products. Intel built more 14nm capacity than usual because of the 10nm problems. As they finally move to 10nm and 7nm EUV processes, it makes sense to try to sell their 14nm fab space/time to anyone who wants it.
- varispeed 6y agoOr maybe they could pivot and work on foundry equipment that small businesses could setup in their garage? I think it should be a good time to start democratising the chip production and so far there is probably no company who can provide tools in this segment affordable for small and medium businesses.
- Macha 6y agoFirst of all there are serious economies of scale to chip processing, especially at these low scale, that I think it's unlikely a SME could compete in this space. Secondly chipmaking is not always the most environmentally friendly process, at least on a local level (Intel[2], AMD[1] have superfund sites at former plants, they aren't the only one), so I'm not sure people should want someone running one "from their garage" [1]: https://cumulis.epa.gov/supercpad/SiteProfiles/index.cfm?fuseaction=second.Cleanup&id=0901389#bkground https://cumulis.epa.gov/supercpad/SiteProfiles/index.cfm?fus... [2]: https://cumulis.epa.gov/supercpad/SiteProfiles/index.cfm?fuseaction=second.Cleanup&id=0901482#bkground https://cumulis.epa.gov/supercpad/SiteProfiles/index.cfm?fus...
- axlee 6y agoEconomies of scale work against that model. Unless for hyper-specialized chips, and even, there is no way low-volume companies can compete against the industry behemoths.
- varispeed 6y agoI am not thinking about printing pentium at 7nm in your garage, but something like 130nm? What are the technical blockers?
- camdenlock 6y agoI have nothing relevant to add here, except to ask: is it just me, or does Intel’s branding suck? How do I pronounce X^e exactly?
- wmf 6y agoXe is officially pronounced as the letters X E. I suspect large companies have too many branding people with too little to do.
- slashdot2008 6y agoX to the e Like the Xzibit song "X to the Z", which might have been good branding as it comes with a theme song
- IanCutress 6y agoThis is the reason I made this video :) https://www.youtube.com/watch?v=3o3-yxUwjSQ https://www.youtube.com/watch?v=3o3-yxUwjSQ
- deleted 6y ago[deleted]
- varispeed 6y agoThis is underwhelming. By the time they manage to get 7nm fab it will already be obsolete. Why not something more ambitious or admit they cannot compete with Apple and AMD any longer and focus on chipsets or other peripherals? They could free x86 specification and let other companies with more energy pick a fight with ARM, no?
- deleted 6y ago[deleted]
- bgorman 6y agoNo one builds a leading-edge fab for one process node. The new factories will be able to support more advanced processes, unless Intel is wildly incompetent.
- colinmhayes 6y ago>Unless Intel is wildly incompetent The last 6 years have proven that their process team is beyond wildly incompetent.
- bryanlarsen 6y agoIntel 7nm is roughly equivalent to TSMC 5nm.
- MangoCoffee 6y agothe problem is yield. by the time Intel get to 7nm (Intel 7nm delay. https://www.bbc.com/news/technology-53525710#:~:text=Intel%20says%20the%20production%20of,current%2Dgeneration%20chips%20on%20sale https://www.bbc.com/news/technology-53525710#:~:text=Intel%2....). TSMC will pull ahead with 3nm and 2nm. TSMC's 3nm is already in risk production. i don't think "nm" matter anymore. the profitable yield level is more important. Intel's Rocket Lake is still on 14nm. it doesn't look like Intel's 10nm yield is profitable.
- cronix 6y agoI wonder how Intels chips would stack against Apple/AMD if they were to also use TSMC for outsourcing manufacturing instead of doing it themselves.
- ruffrey 6y agoAs an embedded hobbyist, I wondered this the other day. Why Intel wouldn’t open up old fabs to embedded developers. It could be a huge boon to that industry which is clearly growing rapidly, and much is developed overseas at larger sizes.
- MangoCoffee 6y agohttps://semiwiki.com/semiconductor-manufacturers/297320-intel-will-again-compete-with-tsmc/ https://semiwiki.com/semiconductor-manufacturers/297320-inte... "Another trust issue is competing with customers. Today’s systems companies are the fastest growing fabless customers (Apple et al) and who is one of the biggest systems companies in the world? Samsung. Which is why the majority of Samsung Foundry customers are chip only companies. Word to the wise for Intel Foundry Services do not compete with customers." Intel foundry services must be a pure play foundry like TSMC in order to win customer's trust.
- xiphias2 6y agoTSMC wasn't a pure foundry either, it was spun off from ITRI in 1987 for the same reason. But you're right, Intel is in a really tough spot right now.
- npunt 6y agoSeems Intel senses the way the semi market has shifted. In the early days of computers it made a lot of sense to co-develop IP and fabrication techniques, especially for CPUs. CPU IP was a way to move up the value chain and capture more $, and CPU IP had huge lock-in. Nowadays better tooling makes it easier to develop chips, better software reduces architecture lock-in, and it's all about mass customization (of IP blocks) for thousands of specific use cases as the market has opened up and chips are in everything. The value chain has shifted and its more important to differentiate on fabrication than it is on IP. In the short run x86 is a cash cow, but in the long run it steals focus away from pursuing the more optimal pure play foundry approach. Intel's main risk is being the worst of both worlds - less attractive IP and less attractive fabrication. Since chips are so important there's also geopolitical considerations at play. If you want to build a semiconductor ecosystem in a region (like the US), you need contract foundries. If you just have Intel puttering along making their own stuff and ignoring others, you get a bunch of local chip designers having to outsource manufacturing, which creates supply chain risk. I imagine as Intel shifts it will get favorable treatment by US Gov't in the way TSMC does from Taiwanese Gov't.
- sitkack 6y agoBut you can get an X86 plus ??? with the Intel fabs, this is huge. Intel will be your partner for your post x86 journey. This is clearly a "crossing the innovators chasm" territory.
- pointyfence 6y agoGiven Intel's operational track record for the last say 7 years, a manufacturing group that's been tightly coupled to its internal design group for eons focused on a very narrow product line, its past half-hearted and unsuccessful attempts at being a foundry, competing against its potential customers, years of organizational and operational mal and under investment, and a competitor like TSMC, it doesn't seem like this has a good probability of success. Anything can happen, but basically, Gelsinger is selling a pivot that goes against Intel's intrinsic nature for a really long time. Which customers are going to sign up to be the test customers for Intel for anything of meaningful scale? I guess Intel could discount prices immensely like Samsung, but is that worth the risk to a major player? If I had to pick a company to be a national US champion to revitalize the US semiconductor industry, is Intel really the right pick vs. say Texas Instruments?
- burlesona 6y agoHow competitive is TI's fabrication tech though? I would imagine Intel is pretty far ahead of them, but I don't know much about the space.
- trynumber9 6y agoRegarding Texas Instruments, what's the latest and most advanced fabrication facility they have? The latest information I could find suggest 45nm. The options in the US don't really look so bleak to go back to 45nm. Intel, Samsung and TSMC have all announced plans for new fabrication facilities in the US. $20B for two plants in Arizona for Intel, $17 billion for new plant and upgrades to S2 in Austin for Samsung, and $12B for a new plant in Arizona for TSMC. I think this is the largest semiconductor investment in the US of all time. Of course it is all planned and plans may fall through.
- pointyfence 6y agoI was thinking more along the lines of selecting a company that plays better with the rest of the industry and has a better operational history if you wanted to bring back more of a general semiconductor manufacturing ecosystem back to the US. Focus more on building out capabilities for the rest of the industries that don't need bleeding edge node development while Intel figures out its bleeding edge. Intel strikes me as historically one of the more ethically challenged companies that heavily relied on monopolistic power. And then when it got into trouble and that monopoly's cracks were widening at a good pace, it started waving the flag after spending $20B+ on stock buybacks.
- ehvatum 6y agoI hope the new IDM 2.0 strategy doesn't mean the end of the Platinum/Gold/Silver/Bronze branding. My local gas station car wash has for decades used the same branding nomenclature for their various tiers of car wash rigor, and it has been very successful for them. I can't imagine that central processing units should be any different from a car wash.
- jimbob45 6y agoI get that Arizona has lax regulations but it seems like they’re gonna have a tough time convincing top tier talent to move to Arizona of all places. Maybe it’s just me.
- BeetleB 6y agoMost of the top tier semiconductor talent is not in Silicon Valley, and some of it is already in Arizona. Intel has had fabs in Arizona since forever, and they have a fairly big footprint there.
- ChuckMcM 6y agoSmart move on Intel's part, there has been a big push for US manufacturing capacity and this will feed that. It is interesting to me that it took a crisis to force Intel to start offering IDM services. Something that I think they should have done years ago to absorb extra capacity.
- ksec 6y agoIBM, US Fabs, $20B Foundry Investment, IFS ( Intel Foundry Services ) , Open / Industry EDA Tooling. This is all about US Fabs. And this is what Intel should have done in 2015. But the timing right now is simply perfect. I still get very emotional seeing Pat Gelsinger with Intel [1], but this whole strategy is about as good as it gets. I mean one could write a thousand word essay lining these up from a geo-political point of view. I am wondering if Apple would test IFS with their Modem. It make sense to have 2nd Foundry source, and Apple doesn't want to fund Samsung Foundry, NAND and DRAM. The best thing about all of these is the new IFS services, along with two additional Fabs meant lots more leading edge wafer capacity. Then there is x86. All the essential x86 patents has expired. x86-64 was launched in 2003? I kind of wish they made a licensable "cleaned up" x86 and call it AE86 :) [1] https://news.ycombinator.com/item?id=25765443 https://news.ycombinator.com/item?id=25765443