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Yeah this is one thing I don't get about the Intel is doomed crowd. Semiconductor manufacturing lead has changed hands a bunch of times in the past, with Intel

Yeah this is one thing I don't get about the Intel is doomed crowd. Semiconductor manufacturing lead has changed hands a bunch of times in the past, with Intel being in the lead for probably most of the past 2-3 decades. TSMC has had notable problems with nodes and has been about as far behind Intel as Intel is behind now for periods. Why wasn't TSMC doomed then? And why couldn't Intel turn around now like TSMC did? Intel looks nothing like other vertically integrated CPU businesses that divested from manufacturing in the past, it's still making a lot of money and gross margins are still healthy (and still higher than AMD and TSMC at the moment!) although clearly taken a hit from the mid/low 60s where they typically sat down to mid/low 50s in the past 3 years. Manufacturing silicon is still a profitable business for them. Intel also has by some important metrics, the best performing CPUs available despite competitors being on TSMC and Samsung. I don't argue the others aren't better in other equally valid metrics. It was actually much more difficult to make that same statement about competitors back when Intel had a clear silicon tech advantage. So definitely Intel is a leading edge node manufacturer if others were in the past.

nwiswell 5y ago
One of the things to understand about Intel's case is that they were never a foundry. Instead, their process leadership was wielded as a weapon to ensure that their devices maintained performance leadership. In that sense it was almost irrelevant to the rest of the market what node Intel had achieved, since nobody else had access to it. Similarly, because it was core to their business model, the foundry business itself was not very cost sensitive; as long as the process tech was exclusive and enabled them to make the world's best processors, they could extract princely sums for the final products. This has fundamentally changed in a way that will not revert. First, we have reached the "end of Moore's Law": process improvements will still continue, but no longer at a pace such that process leadership guarantees performance leadership. Second, without this guarantee of performance leadership, Intel's entire manufacturing operations are having a crisis of purpose. Their manufacturing operations are much less cost-effective than TSMC because that efficiency was never really a major driving force in the past (and to some extent was at odds with the goal of innovation and leadership). Without the serious prospect of regaining a performance advantage, Intel will probably not be investing the kind of money needed to displace TSMC in process leadership. Instead the focus is going to be on making sure their existing fabs are not stranded assets and figuring out how to effectively compete on price/performance without a persistent process advantage.
- throwawaylinux 5y ago
  > In that sense it was almost irrelevant to the rest of the market what node Intel had achieved, since nobody else had access to it. That doesn't follow. Intel has been massively relevant to the semiconductor manufacturing market for 50 years. Arguably the biggest single influence and the one which gave rise to (high performance) foundries in the first place by driving vertically integrated competitors out of business. > This has fundamentally changed in a way that will not revert. First, we have reached the "end of Moore's Law": process improvements will still continue, but no longer at a pace such that process leadership guarantees performance leadership. Second, without this guarantee of performance leadership, Intel's entire manufacturing operations are having a crisis of purpose. Their manufacturing operations are much less cost-effective than TSMC because that efficiency was never really a major driving force in the past (and to some extent was at odds with the goal of innovation and leadership). I don't follow this either. What fundamentally changed? Foundries have been around for almost as long as the semiconductor industry (UMC founded in 1980), and have been huge players in the market since around 2000. > Without the serious prospect of regaining a performance advantage, Intel will probably not be investing the kind of money needed to displace TSMC in process leadership. Instead the focus is going to be on making sure their existing fabs are not stranded assets and figuring out how to effectively compete on price/performance without a persistent process advantage. Intel has publicly stated their plans to build new fabs, invest in new nodes and close the gap with competitors in the next few years so that doesn't appear to be their focus or assessment of their prospects. Whether they actually achieve that or not remains to be seen, but if you are going to say they can't, then you're left explaining how TSMC could -- back as recently as 2015 or so you can see articles wondering whether TSMC will be able to close the gap with Intel. Nothing suddenly changed between 2015 and now, Moore's law wasn't okay then and suddenly just stopped in 2018 when Intel started falling behind, so I don't think you can just handwave about that to explain it away.
  - nwiswell 5y ago
    > That doesn't follow. Intel has been massively relevant to the semiconductor manufacturing market for 50 years. Well, sure: Intel pioneered FinFET, cobalt, even 300mm. TSMC and the rest of the foundry world basically followed their lead. But as any foundry customer, it didn't matter what Intel's state of the art was because you couldn't pay any amount of money to obtain anything other than a final Intel product. > I don't follow this either. What fundamentally changed? Limiting physics. It is very hard to continue to make devices smaller at historical rates. Nobody is keeping up with the historical 2-year node cadence any longer. And the "nodes" now are marketing smoke and mirrors, anyway; they don't actually mean that device density has doubled. > Intel has publicly stated their plans to build new fabs, invest in new nodes and close the gap with competitors in the next few years so that doesn't appear to be their focus or assessment of their prospects. They cannot publicly pull the plug for two major reasons: 1) They need to attract customers for their move into the foundry space (again, their fabs becoming stranded assets are a nightmare scenario) 2) They're hopeful of getting US government subsidies in order to continue competing on a basis other than pure cost/performance Moreover, "closing the gap" could make them competitive in the foundry space, but it would leave them in a different position than they occupied historically. It was their technology _leadership_ that provided a competitive advantage, and it's why they are still so famously paranoid about their intellectual property. > Moore's law wasn't okay then and suddenly just stopped in 2018 when Intel started falling behind Of course not. This has been a gradual process.

nwiswell 5y ago

One of the things to understand about Intel's case is that they were never a foundry. Instead, their process leadership was wielded as a weapon to ensure that their devices maintained performance leadership. In that sense it was almost irrelevant to the rest of the market what node Intel had achieved, since nobody else had access to it. Similarly, because it was core to their business model, the foundry business itself was not very cost sensitive; as long as the process tech was exclusive and enabled them to make the world's best processors, they could extract princely sums for the final products. This has fundamentally changed in a way that will not revert. First, we have reached the "end of Moore's Law": process improvements will still continue, but no longer at a pace such that process leadership guarantees performance leadership. Second, without this guarantee of performance leadership, Intel's entire manufacturing operations are having a crisis of purpose. Their manufacturing operations are much less cost-effective than TSMC because that efficiency was never really a major driving force in the past (and to some extent was at odds with the goal of innovation and leadership). Without the serious prospect of regaining a performance advantage, Intel will probably not be investing the kind of money needed to displace TSMC in process leadership. Instead the focus is going to be on making sure their existing fabs are not stranded assets and figuring out how to effectively compete on price/performance without a persistent process advantage.

throwawaylinux 5y ago
> In that sense it was almost irrelevant to the rest of the market what node Intel had achieved, since nobody else had access to it. That doesn't follow. Intel has been massively relevant to the semiconductor manufacturing market for 50 years. Arguably the biggest single influence and the one which gave rise to (high performance) foundries in the first place by driving vertically integrated competitors out of business. > This has fundamentally changed in a way that will not revert. First, we have reached the "end of Moore's Law": process improvements will still continue, but no longer at a pace such that process leadership guarantees performance leadership. Second, without this guarantee of performance leadership, Intel's entire manufacturing operations are having a crisis of purpose. Their manufacturing operations are much less cost-effective than TSMC because that efficiency was never really a major driving force in the past (and to some extent was at odds with the goal of innovation and leadership). I don't follow this either. What fundamentally changed? Foundries have been around for almost as long as the semiconductor industry (UMC founded in 1980), and have been huge players in the market since around 2000. > Without the serious prospect of regaining a performance advantage, Intel will probably not be investing the kind of money needed to displace TSMC in process leadership. Instead the focus is going to be on making sure their existing fabs are not stranded assets and figuring out how to effectively compete on price/performance without a persistent process advantage. Intel has publicly stated their plans to build new fabs, invest in new nodes and close the gap with competitors in the next few years so that doesn't appear to be their focus or assessment of their prospects. Whether they actually achieve that or not remains to be seen, but if you are going to say they can't, then you're left explaining how TSMC could -- back as recently as 2015 or so you can see articles wondering whether TSMC will be able to close the gap with Intel. Nothing suddenly changed between 2015 and now, Moore's law wasn't okay then and suddenly just stopped in 2018 when Intel started falling behind, so I don't think you can just handwave about that to explain it away.
- nwiswell 5y ago
  > That doesn't follow. Intel has been massively relevant to the semiconductor manufacturing market for 50 years. Well, sure: Intel pioneered FinFET, cobalt, even 300mm. TSMC and the rest of the foundry world basically followed their lead. But as any foundry customer, it didn't matter what Intel's state of the art was because you couldn't pay any amount of money to obtain anything other than a final Intel product. > I don't follow this either. What fundamentally changed? Limiting physics. It is very hard to continue to make devices smaller at historical rates. Nobody is keeping up with the historical 2-year node cadence any longer. And the "nodes" now are marketing smoke and mirrors, anyway; they don't actually mean that device density has doubled. > Intel has publicly stated their plans to build new fabs, invest in new nodes and close the gap with competitors in the next few years so that doesn't appear to be their focus or assessment of their prospects. They cannot publicly pull the plug for two major reasons: 1) They need to attract customers for their move into the foundry space (again, their fabs becoming stranded assets are a nightmare scenario) 2) They're hopeful of getting US government subsidies in order to continue competing on a basis other than pure cost/performance Moreover, "closing the gap" could make them competitive in the foundry space, but it would leave them in a different position than they occupied historically. It was their technology _leadership_ that provided a competitive advantage, and it's why they are still so famously paranoid about their intellectual property. > Moore's law wasn't okay then and suddenly just stopped in 2018 when Intel started falling behind Of course not. This has been a gradual process.