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Intel is playing a PR angle to win hearts and minds for the homegrown semiconductor push. Even if an automotive IC move to get Congress and the public to apprec

Intel is playing a PR angle to win hearts and minds for the homegrown semiconductor push. Even if an automotive IC move to get Congress and the public to appreciate Intel incurs a short term loss, it may be economical in the long term because there's about to be a lot of government money available to the sector. Also, if they want to get busy with foundry, this is the way to do it. It's not like they're doing HPC processors with all the trailing node fabs. I know an engineering researcher who uses a shaft position sensor chip that is also widely employed in EVs. They have been out of stock for months. That little chip could have major implications for many industries and communities. "For want of a nail..."

SavantIdiot 6y ago
A little of both, I think. They do have lots of fab capacity for older process nodes which are ideal of embedded applications. And they do want to boost their PR image, plus they aren't wrong: the industry is kinda effed right now with TWO fires in Japan (most recently Renesas). It's a golden alignment for Intel, and Gelsinger miiiiight be shrewd enough to score a home run. But Intel stock? Eeehhhh.... not a long term hold, they ain't got a play book after this.
- zitterbewegung 6y ago
  A contrary opinion is here by Ian Cutress: https://www.youtube.com/watch?v=oaB1WuFUAtw https://www.youtube.com/watch?v=oaB1WuFUAtw I think that Intel does have two plays left. 1. Appeal to the government that they can't go beyond their current process node and the government preorders a bunch of processors to do this. 2. Intel abandons new process nodes and becomes a customer of TSMC. If Intel thinks about doing #2 I think the government would be forced to do #1 for the sole fact of keeping chip manufacturing knowledge in the US
  - SavantIdiot 6y ago
    I see #1 happening, but I'm not sure how #2 would play out. Hundreds of billions of dollars spent on fabs, with close to 80% of their employees working in fabs 24/7. That would crater several towns in the US (Chandler, Santa Clara, Portland come time mind), and just be throwing away money. One hell of a capital loss! I think there are too many people high up at intel getting stinky rich to throw the company under the buss like that. But then again it might happen, you're not the first to suggest it.
    - totalZero 6y ago
      Intel won't do option #2 as a full-on strategy, for the reasons you mentioned and because it ruins their unique value proposition for government subsidy. But they do need a little bit of option #2, if only for market share defense against competitors. TSMC obviously prioritizes long-term partnership, but in today's demand environment, every wafer that Intel buys is a wafer that AMD (or Nvidia) cannot.
      - SavantIdiot 6y ago
        Also: if China marches into Taiwan, TSMC is off the map and the world is fuckered. AliBaba has PinTouge fabs which are ramping like mad. Which means China could shut down TSMC and come out on top.
        mcny 6y ago
        How do you think the US (and allies Japan and South Korea) would react if China PR marches into Taiwan? More importantly what do you think China PR thinks the US will do if it marches into Taiwan?
        SavantIdiot 6y ago
        I think the allies would be immobilized with fear? The same way Russia annexed Crimea and nothing happened except stern finger wagging from allies. Little Donnie Dipshit tried to push China around and they laughed in his face. I'm pretty sure that emboldened them.
        Fnoord 6y ago
        Taiwan has a different strategic importance than Crimea or Eastern Ukraine.
        totalZero 6y ago
        Totally depends. If destruction of fabs and infrastructure is a fait accompli, war is less likely than if there is still a chance to save the fabs.
  - SkyMarshal 6y ago
    3. Intel does exactly what Gelsinger outlined in his recent presentation (did you even watch it?). They fix their process tech (by moving from Immersion to EUV) and catch up with TSMC, they move to a similar "system-on-a-package" design as AMD and catch up on design, they build their new fabs in Arizona and use those to compete against TSMC in the custom fab business.
  - helsinkiandrew 6y ago
    Relying on government contracts doesn't sound like the behaviour of a growth company. Government processor technical requirements aren't likely to align with commercial requirements. And low risk government cheques tend to push out any higher risk commercial innovation.
    - nr2x 6y ago
      It’s working for SpaceX.
      - helsinkiandrew 6y ago
        True, but rockets are rockets - and delivering a military satellite into orbit is much the same as delivering a commercial one. Delivering Military IC's to a contract is very different to creating commercial products suitable for laptops, phones, AI etc.
    - epistasis 6y ago
      This is kind of ironic, because the only reason the semiconductor industry exists as it does today is because massive amounts of defense contracts in the early days of semiconductor manufacturing. The US's massive defense spending sometimes functions in a more productive way than one would guess.
      - carlmr 6y ago
        And arguably today's silicon valley was built on top of this. I mean it's still in the name "silicon".
        epistasis 6y ago
        I'd be hard pressed to come with an argument that there's any other reason that today's software world is in the SF Bay Area. Government contracts attracted initial silicon startups, noncompetes ensured entrepreneurship, VC developed around the talent, eventually software became bigger than the hardware as the hardware was commoditized. Amazon and Microsoft were successful in the Seattle area, but otherwise the concentration of talent in the SF Bay is hard to beat
mcny 6y ago
> I know an engineering researcher who uses a shaft position sensor chip that is also widely employed in EVs. They have been out of stock for months. That little chip could have major implications for many industries and communities. > "For want of a nail..." I remember reading an article about how production of Apple Macintosh desktop computers in Texas stopped for the want of a specific kind of screw. If I remember correctly, in China they would have been able to resume work within hours in the worst case. I have no industry knowledge so no idea of this is true though.
- yakz 6y ago
  The story says they were delivering partial shipments of the tens-of-thousands of screws in their personal vehicles. And also, that they couldn't make as many screws as Apple wanted. https://www.nytimes.com/2019/01/28/technology/iphones-apple-china-made.html https://www.nytimes.com/2019/01/28/technology/iphones-apple-...
  - specialist 6y ago
    Hmmm. There's got to be more to this story. Tim Cook's Apple is a logistics powerhouse. Surely they have full control over their entire supply chain. Every detail planned long ahead of time. Which screw part was it? Quick scan of all the popular reports doesn't identify the specific screw. Why not change the design to use a more readily available screw? Why not make a one time order of a box of screws from China? Apple regularly provides the capital so their suppliers can ramp up. How much would have cost for that tiny Austin screwer suppler to double production? Probably less than the loose change found in Cook's office couch. In conclusion, I don't buy this excuse. I dimly recall another report about the struggles the Austin plant had producing the Mac Pros. Bad fit and finish. Long turn arounds because there's no surrounding ecosystem of skills, suppliers, deep experience. Etc. Nothing that Apple couldn't have fixed; they just didn't want to.
  - csharptwdec19 6y ago
    > The story says they were delivering partial shipments of the tens-of-thousands of screws in their personal vehicles. Sounds about right. When my brother was green in his automotive supply logistics career, there were a couple of times he got thrown on an airplane with a carry-on of parts...

SavantIdiot 6y ago

A little of both, I think. They do have lots of fab capacity for older process nodes which are ideal of embedded applications. And they do want to boost their PR image, plus they aren't wrong: the industry is kinda effed right now with TWO fires in Japan (most recently Renesas). It's a golden alignment for Intel, and Gelsinger miiiiight be shrewd enough to score a home run. But Intel stock? Eeehhhh.... not a long term hold, they ain't got a play book after this.

zitterbewegung 6y ago
A contrary opinion is here by Ian Cutress: https://www.youtube.com/watch?v=oaB1WuFUAtw https://www.youtube.com/watch?v=oaB1WuFUAtw I think that Intel does have two plays left. 1. Appeal to the government that they can't go beyond their current process node and the government preorders a bunch of processors to do this. 2. Intel abandons new process nodes and becomes a customer of TSMC. If Intel thinks about doing #2 I think the government would be forced to do #1 for the sole fact of keeping chip manufacturing knowledge in the US
- SavantIdiot 6y ago
  I see #1 happening, but I'm not sure how #2 would play out. Hundreds of billions of dollars spent on fabs, with close to 80% of their employees working in fabs 24/7. That would crater several towns in the US (Chandler, Santa Clara, Portland come time mind), and just be throwing away money. One hell of a capital loss! I think there are too many people high up at intel getting stinky rich to throw the company under the buss like that. But then again it might happen, you're not the first to suggest it.
  - totalZero 6y ago
    Intel won't do option #2 as a full-on strategy, for the reasons you mentioned and because it ruins their unique value proposition for government subsidy. But they do need a little bit of option #2, if only for market share defense against competitors. TSMC obviously prioritizes long-term partnership, but in today's demand environment, every wafer that Intel buys is a wafer that AMD (or Nvidia) cannot.
    - SavantIdiot 6y ago
      Also: if China marches into Taiwan, TSMC is off the map and the world is fuckered. AliBaba has PinTouge fabs which are ramping like mad. Which means China could shut down TSMC and come out on top.
      - mcny 6y ago
        How do you think the US (and allies Japan and South Korea) would react if China PR marches into Taiwan? More importantly what do you think China PR thinks the US will do if it marches into Taiwan?
        SavantIdiot 6y ago
        I think the allies would be immobilized with fear? The same way Russia annexed Crimea and nothing happened except stern finger wagging from allies. Little Donnie Dipshit tried to push China around and they laughed in his face. I'm pretty sure that emboldened them.
        Fnoord 6y ago
        Taiwan has a different strategic importance than Crimea or Eastern Ukraine.
        totalZero 6y ago
        Totally depends. If destruction of fabs and infrastructure is a fait accompli, war is less likely than if there is still a chance to save the fabs.
- SkyMarshal 6y ago
  3. Intel does exactly what Gelsinger outlined in his recent presentation (did you even watch it?). They fix their process tech (by moving from Immersion to EUV) and catch up with TSMC, they move to a similar "system-on-a-package" design as AMD and catch up on design, they build their new fabs in Arizona and use those to compete against TSMC in the custom fab business.
- helsinkiandrew 6y ago
  Relying on government contracts doesn't sound like the behaviour of a growth company. Government processor technical requirements aren't likely to align with commercial requirements. And low risk government cheques tend to push out any higher risk commercial innovation.
  - nr2x 6y ago
    It’s working for SpaceX.
    - helsinkiandrew 6y ago
      True, but rockets are rockets - and delivering a military satellite into orbit is much the same as delivering a commercial one. Delivering Military IC's to a contract is very different to creating commercial products suitable for laptops, phones, AI etc.
  - epistasis 6y ago
    This is kind of ironic, because the only reason the semiconductor industry exists as it does today is because massive amounts of defense contracts in the early days of semiconductor manufacturing. The US's massive defense spending sometimes functions in a more productive way than one would guess.
    - carlmr 6y ago
      And arguably today's silicon valley was built on top of this. I mean it's still in the name "silicon".
      - epistasis 6y ago
        I'd be hard pressed to come with an argument that there's any other reason that today's software world is in the SF Bay Area. Government contracts attracted initial silicon startups, noncompetes ensured entrepreneurship, VC developed around the talent, eventually software became bigger than the hardware as the hardware was commoditized. Amazon and Microsoft were successful in the Seattle area, but otherwise the concentration of talent in the SF Bay is hard to beat

mcny 6y ago

> I know an engineering researcher who uses a shaft position sensor chip that is also widely employed in EVs. They have been out of stock for months. That little chip could have major implications for many industries and communities. > "For want of a nail..." I remember reading an article about how production of Apple Macintosh desktop computers in Texas stopped for the want of a specific kind of screw. If I remember correctly, in China they would have been able to resume work within hours in the worst case. I have no industry knowledge so no idea of this is true though.

yakz 6y ago
The story says they were delivering partial shipments of the tens-of-thousands of screws in their personal vehicles. And also, that they couldn't make as many screws as Apple wanted. https://www.nytimes.com/2019/01/28/technology/iphones-apple-china-made.html https://www.nytimes.com/2019/01/28/technology/iphones-apple-...
- specialist 6y ago
  Hmmm. There's got to be more to this story. Tim Cook's Apple is a logistics powerhouse. Surely they have full control over their entire supply chain. Every detail planned long ahead of time. Which screw part was it? Quick scan of all the popular reports doesn't identify the specific screw. Why not change the design to use a more readily available screw? Why not make a one time order of a box of screws from China? Apple regularly provides the capital so their suppliers can ramp up. How much would have cost for that tiny Austin screwer suppler to double production? Probably less than the loose change found in Cook's office couch. In conclusion, I don't buy this excuse. I dimly recall another report about the struggles the Austin plant had producing the Mac Pros. Bad fit and finish. Long turn arounds because there's no surrounding ecosystem of skills, suppliers, deep experience. Etc. Nothing that Apple couldn't have fixed; they just didn't want to.
- csharptwdec19 6y ago
  > The story says they were delivering partial shipments of the tens-of-thousands of screws in their personal vehicles. Sounds about right. When my brother was green in his automotive supply logistics career, there were a couple of times he got thrown on an airplane with a carry-on of parts...