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The Intel Split
- carlycue 5y agoIntel cannot and will not catch up. The arrival of the M1 chip is analogous to the arrival of the monolith in 2001 A Space Odyssey. It’s efficiency is frankly alien technology.
- atty 5y agoI love my M1, but it is most certainly not alien technology that can’t be replicated, nor does it imply that other foundries/chip designers can’t catch up. In many respects AMD is already very close (on a previous node, no less), and Intels 12th Gen, while very power hungry, is very good in terms of total performance (obviously not competitive on perf/watt, but it was never going to be, because of the node difference).
- criddell 5y agoAre you saying that AMD is very close in perf/watt? If so, that's pretty cool.
- atty 5y agoSorry I should have been clearer. As far as I am aware, the M1 is still better at perf/watt (again, comparing TSMC 5 to 7, so it’s not unexpected) - for laptops, the M1 also has an extremely low idle power draw that I don’t think anyone else can match right now, which significantly improves battery life. I meant comparable single-threaded performance in a laptop form factor.
- tomjen3 5y agoYou can get better performance than an M1, but you are not getting anything else with the performance and battery life. Except maybe the M2. If you want an actual ultra portable, you are getting a Mac.
- kcb 5y agoIf you want a Mac.
- AnimalMuppet 5y agoWell, if "ultra portable" matters more than "Mac vs non-Mac", then get a Mac (at the moment). If you want "not Mac" more than you want "ultra portable", then don't get a Mac.
- tomjen3 5y agoIf you don't you have a wide selection of other computers, but none of them really qualify as ultra portable.
- donkarma 5y agoif my understanding is correct then M1 was a one time boost due to the massive decoder and on chip RAM, it's not going to be constantly getting faster
- selectodude 5y agoThe M1 also has old cores from the A14. The A15 isn't hugely faster than the A14 but it clocks faster and has other efficiency tweaks. Clock for clock, the M1 is slower than the iPhone 13 Pro.
- foobiekr 5y agoThat’s basically it. Apple went big because the target process allowed it. To someone out of the ASIC industry, it is a set of interestingly scaled but pedestrian design choices coupled with some exaggeration (realizable memory bandwidth per core on the Max is a fraction of what you’d expect based on Apple’s aggregate memory bandwidth claim for the processor as a whole) and a very serious investment in performance/watt (legacy of the phone use case). The Max has barely any improvement core-wise than the first M1. It’s going to be interesting to see what the real next generation looks like.
- GeekyBear 5y ago> The Max has barely any improvement core-wise than the first M1. Isn't that what you would expect in two chips that use the same core design? There is more memory bandwidth to the Max, and the system level cache is larger, so there are differences outside of the core, but the core itself didn't change.
- deleted 5y ago[deleted]
- GeekyBear 5y ago>one time boost That's not what you would expect if you look at the graph of six years of year-over-year SPEC performance gains on iPhone cores. Their history shows a pretty reliable 20% gain per year. >Whilst in the past 5 years Intel has managed to increase their best single-thread performance by about 28%, Apple has managed to improve their designs by 198%, or 2.98x (let’s call it 3x) the performance of the Apple A9 of late 2015. https://www.anandtech.com/show/16226/apple-silicon-m1-a14-deep-dive/4 https://www.anandtech.com/show/16226/apple-silicon-m1-a14-de...
- malfist 5y agoWhy do you say that? They're already responding to ARM with their big.Bigger architecture in their latest generation. I'm sure people said the same thing about Intel when AMD introduced 64 bit procs or Sun introduced multicore processors. Intel has adapted and lead the field many times after being overtaken. No reason to expect them not to do the same here, or at least compete.
- klelatti 5y agoNot sure ‘already’ is appropriate here. big.LITTLE was announced in 2011. Taking 11 years to copy a competitor’s successful feature must be a record of some sort.
- Kon-Peki 5y agoNot sure you understand the point of big.LITTLE. It's about dealing with power and thermal constraints in the quest for more performance [1]. So was the transition to multicore processors, BTW [2]. These are the things hardware companies do when they have no other option. And as [2] points out, we software folks still don't have a good way to deal with it. [1] https://armkeil.blob.core.windows.net/developer/Files/pdf/white-paper/big-little-technology-the-future-of-mobile.pdf https://armkeil.blob.core.windows.net/developer/Files/pdf/wh... [2] https://www2.eecs.berkeley.edu/Pubs/TechRpts/2006/EECS-2006-183.pdf https://www2.eecs.berkeley.edu/Pubs/TechRpts/2006/EECS-2006-... Alder Lake is about dealing with power and thermal constraints. Intel has finally pushed performance so far that they need to do this. The chips are benchmarking so well because of this move, not in spite of it.
- klelatti 5y agoI do know what big.LITTLE is about thanks. No idea why you’d think otherwise from my post. Of course Alder Lake is benchmarking well because of it. My point was ‘already’ makes it sound like Intel is rapidly adopting this technology - not 11 years after Arm.
- Cthulhu_ 5y ago> It’s efficiency is frankly alien technology. That's probably an exaggeration, and this exaltation of Apple is a Bad Thing. The M1 had good designers - two of which have moved on already, one to Microsoft [0], and the lead designer to Intel [1] only days later. [0] https://9to5mac.com/2022/01/12/apple-silicon-microsoft-poach-chips/ https://9to5mac.com/2022/01/12/apple-silicon-microsoft-poach... [1] https://9to5mac.com/2022/01/06/apple-engineering-director-m1-intel/ https://9to5mac.com/2022/01/06/apple-engineering-director-m1...
- pjmlp 5y agoM1 only runs on Apple hardware. Hardly matters to Intel customers.
- foobiekr 5y agoThat’s true to an extent but no one lives in isolation. Losing Apple was a pretty massive blow. Still the real blow will be if someone successfully enters the server business. Graviton* are interesting but that’s not a broad threat yet.
- sydbarrett74 5y agoI think it'll be another huge blow if Windows users with laptops move almost entirely to ARM over the next 3-5 years. While Intel may have an absolute performance advantage in the desktop and server arena, most Windows users these days are using laptops, where ARM's energy efficiency matters more.
- pjmlp 5y agoFirst Microsoft needs to sort out their Windows on ARM story.
- blinkingled 5y agoI don't think Intel's manufacturing problem is purely that of incentive which will be fixed by a split. That's massive oversimplification. The approach Intel is taking - outsource cutting edge products to TSMC while continuing to invest in their fabs making their lower end stuff and other people's stuff like automotive chips in-house is the best strategy to buy some time to advance their fabs while letting them earn money to support R&D investments. It's a huge problem and nobody except TSMC has succeeded at it. Besides there is years of lack of focus, incentives and interest in specialized education and manufacturing processes that'll take time for Intel to fix. Meanwhile they will be competitive in consumer markets by going TSMC 3nm and continue to improve on the side by taking on outside fab orders. Seems reasonable to me.
- dannyw 5y agoIntel is already competitive on 10nm (Intel 7) with Alder Lake on desktop against AMD; I'm frankly impressed to see what Intel's designs on TSMC 3nm will do.
- saberience 5y agoOnly competitive if you don't look at energy usage, Intel relies on cranking the energy usage in order to get their chips almost to compete with AMD.
- api 5y agoThat may depend substantially on process node. 3nm would use less power.
- throwaway4good 5y agoI don’t get it - who would use intel as a fab? How would they competitive? And trustworthy in the sense, not doing competing designs in house?
- Cthulhu_ 5y agoWell first off, Intel themselves; they sell millions of chips a year. Given the current chip crisis, after their own capacity they would sell off the rest to the highest bidder. I don't think they would be shy of customers, except for direct competitors. But keep in mind that CPUs represent only part of the semiconductor market.
- dannyw 5y agoApple buys screens and other components from Samsung (potentially giving them an early look into the next iPhone's form factor, visual design, and specs); the supply chain is built around trust.
- pwthornton 5y agoI think that's the wrong question. Who would use Intel as a cutting edge fab? Unclear. But plenty of people would love access to a fab for their non-cutting edge needs. The risk with this is that Intel will become a fab for older, less expensive chips, while TSMC and others gobble up the top tier stuff. But the world needs more, not less, fab capacity, and there are plenty of people would gladly use Intel for their needs if the opportunity was there.
- ac29 5y agoAdditionally, only 23% of TSMCs revenue comes from their most cutting edge 5nm process as of the most recent quarter [0]. Everything else is 7nm or larger, which Intel is capable of doing today. In the scenario where Intel remains a major node behind TSMC, there is still a lot of fab business they could pick up. [0] https://twitter.com/IanCutress/status/1481581119740989440/photo/1 https://twitter.com/IanCutress/status/1481581119740989440/ph...
- intev 5y ago
- cs702 5y agoIn short, Gelsinger and his team are configuring the company so Intel's internal manufacturing operations must earn Intel's business, in competition against every other fab-as-a-service provider in the world, including TSMC. The risk is obvious: The company's internal manufacturing operations can survive only if they figure out how to outperform competitors. The upside is that all other parts of Intel stand a good chance of surviving and thriving -- but that remains to be seen. Only one thing is certain: Gelsinger and his team have a lot of cojones.
- lmilcin 5y agoAs an ex-Intel employee it is interesting to see. This seems to be sound long-term though it may cause significant shrink in the business in next couple of years to cut lines of business that are not above water. From the point of view of infinite game it makes a lot of sense to diversify and then cut any branch of business that is not profitable, before it drags entire company. While I think it is difficult to predict results, one thing is sure -- this will force a lot of change in Intel and we would likely not recognise the company ten years from now.
- SavantIdiot 5y ago> Intel's internal manufacturing operations must earn Intel's business This is putting lots of high-level employee's future earnings on the line in a far more direct manner. It will be interesting to see if they accept this challenge, or fight it in order to accept the slow decay that will still ensure at least a longer-term personal financial gain (i.e., instead of failing in 2 years, failing slowly over 10).
- ignoramous 5y ago> Intel's internal manufacturing operations must earn Intel's business, in competition against every other fab-as-a-service provider in the world, including TSMC. I think this might be an interesting retrospective application of The Innovator's Solution's 'be willing to cannibalize revenue streams in-order to avoid disruption.'
- threatripper 5y agoThis means that Intel manufacturing is used where it makes sense and vice versa isn't used where it doesn't make sense. I can see those general outcomes: * Intel manufacturing is soon again better than other manufacturers in all aspects as it has been a long time. All Intel business goes to Intel manufacturing and things return to what they were. * Intel manufacturing is better in some aspects and continues to outcompete other manufacturers in some areas. Most Intel business goes to Intel manufacturing but some special business goes to other manufacturers. Some other companies use Intel where they have an advantage. Everybody wins. * Intel manufacturing cannot keep up with the market leader. Most Intel business goes to the leading Fab. Intel manufacturing cannot catch up as they don't earn enough money to do so. They start cutting costs and compete downmarket with lower tier fabs. In the long run Intel becomes fabless.
- stingtao 5y agoIf Intel split the manufacturing unit, it would not be competitive unless it invested lots more in advanced new processes.
- pclmulqdq 5y agoThe more I have seen of big tech companies, the more I think they need to split up from time to time. Complacency and ossification emerge as a product of scale. If you want to avoid them, reduce your scale. If your manufacturing engineers (really, the managers) need to be at the cutting edge of manufacturing or be out of a job, they will figure out how to get there. Intel has had a number of embarrassing technology misses that have put them behind: the first I remember was through-silicon vias for 3D stacking and it was only a matter of time before they missed something necessary for an advanced fab, and they missed on EUV. Their foundry engineers at the same time were recruiting more engineers out of school on the basis that they were the "best in the world." They thought their position was unassailable because they had high yield at 22 nm, so they rested on their laurels and missed technology after technology before it bit them.
- threatripper 5y agoThere is little information available on what was actually going on inside Intel. All big companies have big problems and each single division or working group is not indicative of the company as a whole. You can find several people with good and bad experience painting all kinds of pictures. A single voice won't tell you the whole picture. Probable even the leaders of Intel don't really know exactly where they are standing. Of course all companies go through cycles of explosive growth, ossification and renewal. Small companies often die because too much of the company goes sour at the same time. In big companies this can be more spread out over time and space and there's always enough left to rebuild the leadership from the inside and push out new profitable products in time. That being said I don't have any indication that Intel right now is in a particularly good position. Nobody in the engineering area seems to feel too honored for having worked at Intel. Yet, they got 10nm finally working and continue to rake in money. Of great concern to me is that much of that money is paid out to investors instead of reinvesting it into the company. There doesn't seem to be a convincing plan of growing the business in the future. Also they did not admit that they have a serious problem at their hands for a long time. You just can't trust anything that Intel releases; it's just a rosy projection of the future when everything goes as planned. Unless a group of senior Ex-Intel get together and tell their war-stories we won't know what actually was going on inside.
- 5y ago
- deleted 5y ago[deleted]
- awill 5y agoI'm always confused when I hear reviewers say that Intel is back on top. They beat AMD's benchmarks at ~double the power. I get it's winning, but it's not a fair fight. I certainly don't want my computer to be 10% faster at double the wattage.
- pradn 5y agoFor home use, that's fine. I don't worry about the power peak usage of my computer since it rarely gets to that level. For servers, that's a no-go.
- neogodless 5y agoI think there's another way to word this or spin this... For home use, it's going to depend on the consumer. Some people want a chip that's easy to power and cool, and still gets 80/90/95% of the performance. Some people want the absolute best performer (for their specific uses) with less regard to cooling and power.
- pradn 5y agoI think peak performance, even if it gets thermo-throttled quickly, is important. Web site JS parsing during loading is like that, and that's an essential function of my computer these days. And perhaps for bursty sections of AAA games as well. But yes, it depends on the user.
- wmf 5y agoAlder Lake is efficient at the low end; the 12100 and 12400 are really good against AMD.
- magila 5y agoThe whole "double the power of AMD" meme is an oversimplification at best. It's all based on a 12900K running a heavy multi-core load with an increased power limit. This is the ultimate "I don't care about power efficiency" setup so it's kind of silly to knock it for drawing lots of power. If you care about power efficiency you can drop the power limit and still be very competitive with AMD. The only reason you don't see Ryzen CPUs drawing the same power as a maxed out 12900K is because if you pumped that much power into a Ryzen CPU it would explode (at least without LN2 being involved).
- lvl100 5y agoI am pretty bearish on the the semi space especially after TSMC comments last week. I really think they’re expanding at the worst possible time. Understandably, this is largely due to politics.
- altcognito 5y agoI can't quite grasp why anyone would be bearish on the semi space. It's been non-stop growth for the past four decades and only appears to be accelerating. What in the world is there to be "bearish" about?
- acomjean 5y agoI'm not the original poster. But I'm guessing that the reasoning is: there might be more capacity than needed so that would drive profits down. Cheap chips seem like a great thing to me, but I'm not selling them. But at this point when there putting chips in everything its hard not to see the market expanding to meet increased capacity. (I think some greating cards have chips in them to control music/lights....)
- sydthrowaway 5y agoNo, he’s talking about the forthcoming dual invasion of Ukraine and Taiwan by Russia and China
- deleted 5y ago[deleted]
- klelatti 5y agoProblem is the less product Intel pushes through its own fabs the less investment they will get and the more they will fall behind. This feels like a defensive / short term value maximisation strategy - and might be the right one in terms of total value. It doesn’t feel like a long term vote of confidence.
- MangoCoffee 5y ago>less product Intel pushes through its own fabs that's the problem the article mentioned. Intel is an IDM. they developed their own tools/process and it gave Intel an edge during the early years of the semis industry. however, it look like the industry catch up to Intel. Intel's own tools/process is no longer enough and in fact it became an technical debt. Intel split into two allowed Intel's foundry to use standard equipment/software thus no needs to waste money on building its own tools.
- klelatti 5y agoWhy can’t they migrate to industry standard tools whilst keeping their business in house?
- MangoCoffee 5y agono conflict of interest with Intel's foundry customers.
- klelatti 5y agoNot sure I understand your point here. They will need to migrate to industry standard tools for foundry customers anyway. Seems to me that planning to place more business with TSMC is essentially an admission that they don’t expect to be competitive with TSMC in the near future. And Gelsinger has more visibility on this than anyone.
- MangoCoffee 5y ago
- MangoCoffee 5y agobottom line: Intel's edge is an technical debt. Intel's own tools/process used to give them an edge over everyone else during the early years in the semis industry. Overtime, tool suppliers have catch up with Intel and Intel is falling behind due to their own tools delay/insufficient. Intel's own tools is losing out to commodity and standardized tools
- bluedino 5y agoImagine what could have been if Intel wouldn't have sold XScale back in 2006 and kept focusing on ARM
- MangoCoffee 5y agoARM is not end all and be all. x86 still have a big market share
- neogodless 5y agoThat's one way to put it! I'm not finding any comprehensive sources, but here's an example: https://www.theregister.com/2021/11/12/apple_arm_m1_intel_x86_market/ https://www.theregister.com/2021/11/12/apple_arm_m1_intel_x8... > Arm's market share in PC chips was about eight per cent during Q3 this year, climbing steadily from seven per cent in Q2, and up from only two per cent in Q3 2020, before Arm-compatible M1 Macs went on sale. ARM is very much on the rise, but also still in the single digits, leaving plenty for x86. https://futurecio.tech/intel-losing-share-to-amd-and-arm/ https://futurecio.tech/intel-losing-share-to-amd-and-arm/ > 5% of the servers shipped in the third quarter of 2021 had an Arm CPU
- stefan_ 5y agoWhat exactly would have been? There is no inherent superiority in the ARM architecture. Hell, 2006 ARM is a trash architecture. They just happened to be the only vendor that cared about that niche, and then the niche stopped being niche.
- cletus 5y agoIMHO this is just Intel hiding rather than solving its problems. It gives the appearance of management doing something but it's the wrong thing. If we've learned nothing else, the big winners are at the cutting edge and vertically integrated. Splitting design and fab seems like a good idea: force fab to compete for design business. But middle management will take over and create perverse incentives where neither fab nor design radically improves. I've heard tales of Intel being rife with politics, fiefdoms and empire-building. This is classic middle management run amok in the absence of real leadership. I honestly think the best thing Intel could do is fire everyone above the director level and start over. Intel dominated when their fab was cutting edge and no one else had access to it. Splitting this means if their fab improves then everyone has access to it. There's clearly an organizational problem here but this split isn't going to solve it.
- threatripper 5y agoIMHO it's the same pattern of the time when Intel gave up on their memory business and entered the CPU business. Citing from memory: "If you were the new CEO what would you do to save the company?" - and he immediately knew the answer - "Then let's go back in the boardroom and do that." Judging from that it seems like their fab business doesn't have any long term future, the outside world just doesn't know it yet. Now they put on a show until they are ready to fully convert to other fabs. After all, the current fabs are still cranking out chips that make them billions each month.
- JumpCrisscross 5y ago> their fab business doesn't have any long term future It has a fine future, just not in a 60%+ margin business. Intel should bite the bullet and spin out its fabs. Let it compete and grow as a separate company from Intel’s design units. Stratchery is spot on, as he’s been about Intel from day one.
- notswiley2 5y agoIsn't this kind of thing part of what killed the PalmPilot?
- mwcampbell 5y ago> if tomorrow morning the world’s great chip companies were to agree to stop advancing the technology, Moore’s Law would be repealed by tomorrow evening, leaving the next few decades with the task of mopping up all of its implications. On the one hand, if this happened, it could be good for putting an end to the routine obsolescence of electronics. Then maybe we could get to the future that bunnie predicted roughly 10 years ago [1], complete with heirloom laptops. On the other hand, ongoing advances in semiconductor technology let us solve real problems -- not just in automation that makes the rich richer, enables mass surveillance, and possibly takes away jobs, but in areas that actually make people's lives better, such as accessibility. If Moore's Law had stopped before the SoC in the iPhone 3GS had been introduced, would we have smartphones with built-in screen readers for blind people? If it had stopped before the Apple A12 in 2018, would the iOS VoiceOver screen reader be able to use on-device machine learning to provide access to apps that weren't designed to be accessible? (Edit: A9-based devices could run iOS 14, but not with this feature.) What new problems will be solved by further advances in semiconductors? I don't know, but I know I shouldn't wish for an end to those advances. I just wish we could have them without ever-increasing software bloat that leads to obsolete hardware. [1]:' https://www.bunniestudios.com/blog/?page_id=1927 https://www.bunniestudios.com/blog/?page_id=1927
- alfor 5y ago- The PC is in decline (bad for intel) - Intel lost the mobile platform - Apple is moving to ARM, PC laptops to follow soon. - AMD is eating intel lunch in the high performance x86 - Servers are starting to move to ARM Last piece of the puzzle - Intel is not doing great at the fab level. It doesn’t look good for Intel, they need to do a radical transformation fast. Innovate now or die.
- neogodless 5y agoI agree with many of your points, however... > - Apple is moving to ARM, PC laptops to follow soon. > - AMD is eating intel lunch in the high performance x86 That first one really needs... a source? It's a guess, but far from a certainty! The second one is partially true? AMD has greatly increased their market share and is much more competitive with Intel than they were 5 years earlier. They are not beating Intel in market share, but they are gaining on them. They recently had leads in performance, but it's not a one-sided race.
- silvestrov 5y agoThe first is true to a degree if "PC laptops" includes the laptops kids use in schools: a lot of schools have switched to ChromeBooks due to price and ease of management.
- alfor 5y agoI agree, it’s not done on the server, it’s just that AMD was nonexistent a few years ago and now have share of the market. Intel was the only choice for top performance and were able to dictate the price at the high end.
- rkagerer 5y agoThe company's willingness to tackle tooling to multiply the effectiveness of their employees was a key factor in their success: This incredible growth rate could not be achieved by hiring an exponentially-growing number of design engineers. It was fulfilled by adopting new design methodologies and by introducing innovative design automation software at every processor generation. These methodologies and tools always applied principles of raising design abstraction, becoming increasingly precise in terms of circuit and parasitic modeling while simultaneously using ever-increasing levels of hierarchy, regularity, and automatic synthesis. As a rule, whenever a task became too painful to perform using the old methods, a new method and associated tool were conceived for solving the problem. This way, tools and design practices were evolving, always addressing the most labor-intensive task at hand. Naturally, the evolution of tools occurred bottom-up, from layout tools to circuit, logic, and architecture. Typically, at each abstraction level the verification problem was most painful, hence it was addressed first. The synthesis problem at that level was addressed much later.
- adamc 5y agoReading this, I had the uneasy feeling that we might be seeing a company chase a past that cannot be its future.
- mrintellectual 5y agoHaving worked at Intel before, I can safely say that it's difficult to boil down Intel's problems to a single issue (e.g. chip manufacturing). Stagnant company culture, limited growth opportunities within the company, and a fanatical focus on selling CPUs instead of innovating are all problems that Intel currently faces.
- hedgehog 5y agoThe conversation is also muddied by varying definitions of success and failure. Intel isn't going to go broke in any foreseeable future but they may lose the premium margins they used to earn for having the best performing product. To the extent fab advantage drove that advantage (likely a big part) and that advantage is not coming back (because they no longer have a scale advantage) then maybe the premium margins will never come back. That's what investors worry about.
- gumby 5y agoI think Thompson says this (while talking about a series of lackluster CEOs) and says the topic of the "split" is a consequence of that, which has to be fixed (and is merely one of the problems)
- anonporridge 5y agoLimited growth opportunities seems like a big problem that can kill any organization. Specifically if leadership gets ossified and there's no realistic path for ambitious young people to rise into positions of power and responsibility. When this happens, the ambitious young people are more likely to vote with the feet and build a competing organization that they will actually have power running. This is especially problematic when it happens in government. What are young people in America supposed to do when the political conversation can't break out of asking which of near geriatric octogenarian who had a childhood with rotary phones should be our next president? Our culture seems to have lost the very important feature that there comes a time when you've had your turn at the helm, and now you need to step down and support new leadership.
- benreesman 5y agoIntel blew EUV, which fair enough, it’s hard as hell. Are there other problems, sure, but when you go from leading-edge process technology to a two node lag, you’re fucked either way. This article is rambling and over-complicated. For a much more insightful and compelling view into Intel at its greatest I recommend “The Pentium Chronicles”.
- pm90 5y agoHow to fix Intel: 1. Lobby the US Government and public to increase public spending on manufacturing semiconductors in the US 2. Corner most of those subsidies/funding 3. Done Only partially joking; Why has Intel not made the over reliance of overseas fabs a natsec issue?
- khyryk 5y agoIt has, now it's waiting for money from the CHIPS Act, which is now in the House.
- jalopy 5y agoThis is a "heads I win, tails I win" strategy. Give the fab business a chance to be independent and justify its massive capex and lower margin profile. Increase utilization of nodes to squeeze as much cashflow out of them as possible. If it continues to be a worthwhile cashflow endeavor, fantastic. If not, split the company and fetch a high price for a sophisticated and capable (if not #1) semi fab business. Let the higher margin chip design business utilize whatever manufacturing process is most effective for its latest and greatest chip designs. Chip design and development won't be hamstrung by setbacks in manufacturing. Intel's scale will ensure most optimal pricing and deal terms with TSMC (if INTC doesn't use its own fab). Along the way, there is additional upside optionality from government subsidies and support for a critical piece of infrastructure in the 21st century. Domestic fabs will be (if they aren't already) as high priority and critical to US national defense as the military hardware contractors (Boeing, Lockheed Martin, etc). That also ensures a floor to the price of the fab business should Gelsinger decide it should be sold.
- AaronFriel 5y agoThis was the same rationale AMD had when parting ways with their Global Foundries business, and I'd argue just as much a move out of desperation. What's different are the politics. United States domestic national security concerns make it much more financially prudent for Intel to pursue the same split. AMD took a gamble, Intel is likely to have more of a "sure thing", they have the capital backing them to make a competitive foundry business, if not the federal government will make that capital happen.
- jalopy 5y agoAlso with their packaging tech (EMiB and Foveros) they can mix and match chips from different fabs - ie, combine P-cores from TSMC fabs with E-cores from their own (possibly older) fabs. Alder Lake is the first real stab at the "chiplet" architecture, and it seems to be a very good outing. Future iterations will only improve, and at Intel's purchase scale economics they'll be able to manufacture chiplet designs that match market needs for the highest margin or pricing pressure to squeeze competitors, if needed.
- yyyk 5y agoStratechery is usually very clever, but here misses a key point: Intel falling behind in node size is the problem, yet TSMC is not a direct competitor to Intel. Sure, TSMC competes against the new Intel foundry initiative, but foundry is not the main profit center. For the most part, it's the companies that buy TSMC's fab time that are competing with Intel. So sure, Intel buying TSMC time helps TSMC. However, TSMC would have sold that fab time anyway, and gotten the same scale fabbing (say) AMD chips. It's much more useful for Intel to buy production and hurt the actual Intel competitors* that would have contracted for that TSMC time while still making profits for Intel. Intel will still have enough scale to still grow its own processes, and it can probably rely on some help from Uncle Sam to further tilt the scales. I'm frankly surprised that regulators haven't interfered - in most other markets people would have noticed the anti-competitive move (a manufacturer 'starving' their competitors' supply). * Apple excepted, since they have more than enough cash to outbid Intel. Then again, Apple doesn't bother with servers, so Intel can live with this. Also, the Apple ecosystem is different enough that switching has its own complex set of upsides and downsides.
- lifeisstillgood 5y agoOther than AMD who actually competes with Intel (honest question). I mean for servers there is 686 descendants (Intel/AMD) and then ... err ARM on servers ?
- yyyk 5y agoAMD and also ARM on servers, like Amazon's Graviton. Intel beating TSMC in node size isn't going to happen in near term even in Intel's best case scenario, and even if that were to happen - fabs like TSMC will always have enough scale to compete. So Intel might as well buy from TSMC and take over its rival's production. Every chip Intel buys from TSMC is a chip taken from AMD and a spare chip Intel fabs could make.
- KerrAvon 5y agoDoes TSMC allocation work that way? Surely a client like AMD is paying up front to ensure capacity.