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> The company's internal manufacturing operations can survive only if they figure out how to outperform competitors. Is outperforming competitors necessary for

by DCKing 5y ago

> The company's internal manufacturing operations can survive only if they figure out how to outperform competitors. Is outperforming competitors necessary for Intel's survival? There's plenty of fabs in the world doing quite alright well behind TSMC, the vast majority of which can't even come close to Intel's current capabilities [1]. Even if Intel never succeeds with their existing process roadmap - which is not on pace to beat TSMC - they still possess some of the most advanced chip manufacturing processes in a world that's all the more dependant on chip manufacturing. GlobalFoundries got out of the race on 14nm - a 14nm not as good as Intel's 14nm and far behind Intel's 10nm - and is still posting YoY revenue growth, despite losing much of the volume they were producing for AMD over the last few years. In addition to that, I suppose that even if Intel merely succeeds in roughly keeping up with TSMC and Samsung (their current 10nm being on par with Samsung's and TSMC's 7nm would classify as "roughly keeping up", I think) there's American national security interests at play. Especially so if Intel's manufacturing capabilities are accessible to (American) third parties. No way the powers that be would let Intel's manufacturing plants go under. It's a pretty bold strategy at face value, but I think it's actually a pretty straightforward choice and the risks aren't all that existential. [1]: https://en.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants https://en.wikipedia.org/wiki/List_of_semiconductor_fabricat...

seanp2k2 5y ago
>No way the powers that be would let Intel's manufacturing plants go under. Perhaps that's part of the calculus too; if they know that Uncle Sam will backstop any failures, are they not also making the same play as their competitors were in the 80s? The problem is that by the mid-1980s Japanese competitors were producing more reliable memory at lower costs (allegedly) backed by unlimited funding from the Japanese government, and Intel was struggling to compete…
cs702 5y ago
In the short run (say, a time horizon under 10 years), I think you're right. In the long run, I think failing to outperform the competition persistently would lead to gradual irrelevance, unsustainable margins, and eventually a slow death of the manufacturing side. I mean, that's the path Intel's manufactoring operations were on before this recent change in strategy: the path to a slow death.
- DCKing 5y ago
  A slow death over 10+ years can happen whatever Intel does. Doesn't make this a particularly big cojones move either. One needs quite a crystal ball to predict such slow deaths, especially when it's going to be decade where chip production improvements are expected to slow down further and further. Finally, a slow death looks even more likely anyway if Intel doesn't change their ways.

by DCKing 5y ago

seanp2k2 5y ago

>No way the powers that be would let Intel's manufacturing plants go under. Perhaps that's part of the calculus too; if they know that Uncle Sam will backstop any failures, are they not also making the same play as their competitors were in the 80s? The problem is that by the mid-1980s Japanese competitors were producing more reliable memory at lower costs (allegedly) backed by unlimited funding from the Japanese government, and Intel was struggling to compete…

cs702 5y ago

In the short run (say, a time horizon under 10 years), I think you're right. In the long run, I think failing to outperform the competition persistently would lead to gradual irrelevance, unsustainable margins, and eventually a slow death of the manufacturing side. I mean, that's the path Intel's manufactoring operations were on before this recent change in strategy: the path to a slow death.

DCKing 5y ago
A slow death over 10+ years can happen whatever Intel does. Doesn't make this a particularly big cojones move either. One needs quite a crystal ball to predict such slow deaths, especially when it's going to be decade where chip production improvements are expected to slow down further and further. Finally, a slow death looks even more likely anyway if Intel doesn't change their ways.