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Isn't this just a culmination of nearly a decade of unforced errors and mismanaged strategy? I'm a complete outsider but I see a couple of fundamental huge miss

Isn't this just a culmination of nearly a decade of unforced errors and mismanaged strategy? I'm a complete outsider but I see a couple of fundamental huge misses by Intel over the past 10 or so years: 1) Completely missed the boat on mobile. Their ARM-competitive chips (Atom, etc.)... weren't. Missed on every measure from power to performance. Let Qualcomm and Samsung eat their lunch. 2) Missed too many ticks and replaced them with tocks. Fell far behind because of ridiculous tilt-at-windmill folly around Itanium and other architectural decisions that absolutely didn't pay off. Ended up taking way too long to get further down on process size. 3) Lost their competitive edge so much that Apple finally realized they can do it better and suffer the transitional costs of building a middleware layer to translate off of x86. Apple's fully committed to that, so Intel doesn't just lose the "no one is using a PC anymore" market, they're also losing the "those people who DO use home computers which happen to be Apples" market. It's absolutely incredible to watch these formerly phenomenally innovative companies falter at that very core competency of staying cutting edge but we see it happen over and over again.

hn_throwaway_99 4y ago
> It's absolutely incredible to watch these formerly phenomenally innovative companies falter at that very core competency of staying cutting edge but we see it happen over and over again. To be frank, I think that's a great thing. I don't want companies to stay giant in perpetuity, I think it's great that they are essentially "recycled" when new, better companies come along and eat their lunch. If anything I think it's quite bad that over the past 25ish years that a lot of big companies have really learned the lessons of "disruption" and have responded by just buying up the smaller but up-and-coming competition before they can overtake (looking at you Adobe and Figma).
- srinivgp 4y ago
  IF a company goes bad, it's great that new companies eat their lunch. It's bad for a company to go bad. It's bad for a company to lock out competition.
  - BobbyJo 4y ago
    > It's bad for a company to go bad. Hard disagree, so I wonder what your basis for this bullet is. Agree on the other two though.
    - NikolaNovak 4y ago
      Not the op, but: 1. Tautological: from company's perspective, it's bad for the company (itself) to go bad. 2. More broadly, it's reasonably self-evident that it's bad for employees, and bad for shareholders of a company, for that company to go bad 3. Where we can have discussions, and probably for a long and fun if not necessarily fruitful time, is whether it's "good" or "bad" from market's, or consumer's perspective for companies to go bad. I personally think not. I think we'll likely mostly agree that it's good for market to filter out and punish bad companies or companies that go bad, once they go bad, for whatever reason; but that doesn't necessarily imply or follow that's it's good for companies to go bad. In other words, what's your perspective/bias - why would it be GOOD for a company to go bad? Why would it not be absolutely fantastically wonderful if all companies perpetually stayed good and we lived in utopia of rainbows and unicorns? :> (all this without defining what "company going bad" means, left as an exercise for the student :)
      - BobbyJo 4y ago
        > Where we can have discussions, and probably for a long and fun if not necessarily fruitful time, is whether it's "good" or "bad" from market's, or consumer's perspective for companies to go bad. I personally think not. Generally where my head was at. The other two points were better scoped. I personally think it's good that companies go bad, as it moves control over productive assets from one group to another. This is good for society for a variety of reasons, not the least of which is enabling new ideas to be tried. Can a long lived company try new ideas? sure, but the degree to which they avoid risks (if they live a long time they necessarily avoid undo risk) puts on upper bound on how ambitious they are with new things.
    - srinivgp 4y ago
      Things going bad is bad. Dying is bad. Etc etc. Sometimes on net things are good because of other effects like "ah, promising new competitor gets a chance to shine!" but if you could have _both_, you absolutely _would_. A company going bad is a _cost paid_ for new blood, not an _added benefit_. It's not good that you have 100 fewer hours when you spend 100 hours creating something awesome. It's bad that you have 100 fewer hours. If you could create the same awesome thing and still have those 100 hours to do something else, that'd be fantastic. All other things being equal, I would far rather Intel be awesome than not. If it turns out the world is such that all other things can't be equal, it might be worth having Intel not be awesome in favor of other benefits, but I'm never going to be _happy_ about Intel not being awesome.
- jrockway 4y ago
  > I think it's great that they are essentially "recycled" when new, better companies come along and eat their lunch. Don't you have on the order of tens of thousands of dollars invested in Intel through retirement savings, though? When S&P 500 companies fail, your retirement savings become worthless. (Apple is really the one you want to watch out for, though!)
  - pantulis 4y ago
    Not a US citizen, but aren't the retirement funds managed by someone who should be held responsible for not diversifying?
    - katmannthree 4y ago
      Whether or not they're ``held responsible'' to the degree anyone in such a position in the US is (i.e. lolno), grocery stores and retirement homes do not accept epicaricacy as payment.
    - jrockway 4y ago
      Retirement funds do pretty OK here. Early in your career you'll mostly hold something like an S&P 500 index fund or a total stock market fund, as you get closer to retirement they shift the allocation towards safer investments. I don't love this; the total stock market is a lot of tech companies, and I already have plenty of exposure to tech by working in the field. It's a good heuristic for most people, though. (And no, I don't do anything about this underlying fear of tech sector exposure. I just buy the Target Date 20XX funds like everyone else.) My only point is that the grandparent comment generally expects companies to die when they get into the S&P 500. If that's true, we're all screwed. If one S&P 500 is just stealing business from some other S&P 500 company, though, it's probably a net gain. But if it's some privately owned startup, then it's not as concrete a win, and let's be honest, startups are driving a lot of the innovation in tech.
      - JamesianP 4y ago
        Which retirement funds are doing ok this time around? They typically switch to bonds which thanks to inflation are down something like 20 percent in the last year (some more like 30), despite yielding far less than stocks in the best of times.
- jason-phillips 4y ago
  > I think that's a great thing. I don't want companies to stay giant in perpetuity... Except that semiconductors are a national security issue at the moment.
  - indymike 4y ago
    > Except that semiconductors are a national security issue at the moment. Maybe too big is a national security issue, too. Too big to fail is a real problem for any part of our economy.
    - icapybara 4y ago
      Computer chips are a product that is only possible to produce at the largest scales. Everything, from the supply chain to design to manufacturing, is a globalized effort. You’ll never have small mom and pop fabs.
      - wongarsu 4y ago
        If everyone realizes it's a national security issue, that might change. Sure, US, EU and China have players in the industry and can attract fabs with a bit of incentive, but what if Russia or India or Pakistan or Brazil or Iran want to ensure a steady supply even under sanctions? Some of them might open up smaller fabs that might not be economically viable but are of strategic importance.
        selimthegrim 4y ago
        Doesn’t Malaysia have fabs? Singapore?
      - bluGill 4y ago
        You could fab chips in your basement. However your costs per chip would be in the tens of thousands each for basic chips. Large scales allows making those same chips for less than a dime each.
- MichaelBurge 4y ago
  There's no guarantee semiconductor fabs will be recycled. If TSMC shuts down due to political turmoil, Intel decides to halt all R&D and milk their new monopoly, then hardware progress could simply stall with no new competitor rising. An investor would need to front many billions of dollars for an uncertain payoff over a decade or two, and Intel could at any moment become competent again. And if no investor is willing to take that risk, there would be no new competitor. Adobe and Figma are software companies, so don't require capital investment. So if one shuts down, it's relatively easy to make a new UI modeling tool(or for an existing one to take over their customers).
- eecc 4y ago
  That's all very nice and yeah, we've all read the essay about "creative destruction" but what happens to the Intellectual Capital that gets annihilated, sold pennies on the dollar and left to whither in useless portfolio trusts. It's a disastrous process, I passionately hate it
dexwiz 4y ago
To add to the list their 5G modem chip also failed in recent years. They sold their mobile division to Apple who then indirectly laid off a ton of staff by making them reapply and interview for their existing positions.
chongli 4y ago
Completely missed the boat on mobile I think their main error was short-termism. They were addicted to high margin (workstation/server) devices. They had no interest in the low margins of mobile devices. They could not imagine how low-power devices would take over the world.
- magicloop 4y ago
  Actually that is the "Innovator's Dilemma" in action. Managers will always prefer to safeguard and enhance the high margin aspects of the business and discourage/under-invest in low margin disruptor aspects of the business due to cannibalization of profits and thus missing profit guidance for the quarter (thus losing compensation personally). They knew the tide was changing but organisation dynamics prevents a course correction. Only a few companies can buck the Innovator's Dilemma, usually only founder led enterprises with significant control.
  - wahern 4y ago
    > missing profit guidance for the quarter The Innovator's Dilemma isn't about missing quarterly guidance. The dilemma is that it's perfectly rational and profit maximizing to continue focusing on your cash cow even when obsolescence is a foregone conclusion. It wouldn't be a true dilemma, otherwise. The incumbent is the only player that can maximally squeeze the very considerable remaining profits from old technology, and they should do so with gusto. Moreover, switching to new technologies comes with more risk, even when it seems obvious what the new market will look like because the old market has almost zero risk--it's completely proven. All the "solutions" to avoid the dilemma, like selling the old technology to take future profits and then pivoting to the new market, are just corporate branding shell games. They might even be in fact sub-optimal, but in any event the fundamental dynamics remain the same.
    - noobermin 4y ago
      Except it didn't actually work out. It worked out at the time, and thus was "perfectly rational" then but rationality should not have a limited time horizon because then it is limited. This is the problem with short-term thinking, it eventually leads to loss.
intrasight 4y ago
> unforced errors and mismanaged No. Managing innovation at the scale of Intel is a challenge. And their customer base (PCs and servers) is shrinking. Also, this is only like 15% of the workforce. Which is only 5% more than a typical culling.
makestuff 4y ago
Also they are losing share in the datacenter space as well. AWS is fabricating their own chips for gravitron instances as well as some other special types. GCP has been doing this for awhile with their ML chips, and I am sure Azure is moving in that direction too. It looks like they will take the path of IBM where they are still massive due to legacy users not moving off of them, but it will be hard to capture new market share without some massive change happening.
christkv 4y ago
Never understood why they did not just get a new ARM license and make a mobile chip it was not like they were going to impact existing business.
cowmix 4y ago
I've typed this before but I'll type it again here. About 10 years ago I ran the local Python Meetup group here in Phoenix. Intel had/has a big presence here and one of they guys who worked on the Atom team (doing compiler optimizations for that chip family) told us (at one of the Meetups)Intel corporate didn't like how good a processor Atom was shaping up to be. They were worried it would start to cannibalize their desktop and server processor lines -- so they did everything possible to cripple its development. He and his whole team were furious.
- xwolfi 4y ago
  All that to end up with giant cloud providers selling arm servers...
- spfzero 4y ago
  If someone is going to eat your current business, it's better if it is you. Fear of cannibalization is basically, "our customers will find out we have an even better product for them than the one they are currently buying from us." It's a good thing for your customers, and it's good for the long-term competitiveness of your company.
  - Sylamore 4y ago
    I've always told my business partners when discussing future products that if you aren't afraid to cannibalize your own revenue streams, your competitor (or another internal team) will.
  - deleted 4y ago
    [deleted]
- tuatoru 4y ago
  SOP. IBM crippled the AS/400 when it looked like it could eat into their mainframe business, for example. It's the innovator's dilemma. 1. https://en.wikipedia.org/wiki/The_Innovator's_Dilemma https://en.wikipedia.org/wiki/The_Innovator's_Dilemma
- nprateem 4y ago
jws 4y ago
Itanium was a bet that seemed the way forward at the time. Making an x86 instruction set processor that did on the fly analysis and conversion to a superscalar computation core sounded really hard, so VLIW was the safe "we'll do the superscalar decomposition at compilation time and run that". Turned out to be a bad bet because a miracle¹ occurred on the other side. I think of it as a peer to the 2005 proposition that electric cars didn't need to be golf carts and the technology was coming into place to make high performance, real cars that were purely electric. Could have been true. As they say "very dangerous, you go first." That one paid off. I wonder if there is a list of large dollar, novel, engineering expeditions and how they turned out. ␄ ¹ Where "miracle" means some really smart people worked really hard at it for a long time.
- klelatti 4y ago
  I’m not sure the timeline really works for this argument. Pentium was the first x86 superscalar and that was 1993 so it predates Itanium. Rather Intel wanted to leave the baggage of x86 behind, segment the market for higher profits and hoped to get better performance than superscalar x86. But they never achieved the latter and most people just wanted 64 bit and software compatibility.
- jcranmer 4y ago
  > Making an x86 instruction set processor that did on the fly analysis and conversion to a superscalar computation core sounded really hard, so VLIW was the safe "we'll do the superscalar decomposition at compilation time and run that". The first superscalar x86 processor was the Pentium, which came out in checks notes 1993 (Wikipedia claims design work started in 1989, hit working simulation in 1990 and taped out in 1992). Intel didn't start work on Itanium until 1994, after Pentiums were already shipping to customers, and Itanium itself wouldn't ship until 2001.
- bsder 4y ago
  Itanium was a gigabuck and drove everybody out of the high-end processor market except IBM leaving Xeon for Intel to monopolize for a decade+. I'd qualify that as a business success even if Itanium was a technical failure. And, it may be paying off after all. Graphics cards are effectively giant VLIW machines. And while Intel's new cards get slaughtered on DirectX 11 or older games, they are quite competitive when used on the DirectX 12+ stuff which basically wants a giant multi-core parallel processor.
causi 4y ago
1) Completely missed the boat on mobile. Their ARM-competitive chips (Atom, etc.)... weren't. Missed on every measure from power to performance. Let Qualcomm and Samsung eat their lunch. I'm gonna add the caveat that the failure didn't happen out of the gate. Xscale was leagues ahead of anything else two decades ago. Atom stumbled at the start but Cherry Trail had a better price to performance ratio than anything that followed it. Intel's failure was nothing but pure avarice.
- bluGill 4y ago
  In this market what counts is performance/watt ratio. Battery power is a big selling point for cell phones, and so you can charge a bit more for less watts. Though of course price does matter too. There are also embedded markets where you have to be passively cooled, again watts matter. My impression is Intel hit the price for embedded just fine, but at higher watts, and thus they can't compete.
  - causi 4y ago
    In this market what counts is performance/watt ratio. That was also excellent for Cherry Trail, with an SDP of 2 watts. When you have some time sit down and compare the benchmarks from a Cherry Trail tablet like the Surface 3 and its successor chips like the 4415Y. The 4415Y like the one in the Surface Go is three years newer, has a 60% higher TDP, a Recommended Customer Price over four times higher, and while its 3D chops are better it actually benchmarks lower than the Cherry Trail chip in PCMark.
sidewndr46 4y ago
Itanium dates back to 2001. It was "discontinued" in 2020, but as we've learned it was only being continued because HP was footing the bill. It really doesn't have anything to do with Intel's current problems. Intel was basically past the Itanium debacle by 2010.
kimixa 4y ago
> 1) Completely missed the boat on mobile. Their ARM-competitive chips (Atom, etc.)... weren't. Missed on every measure from power to performance. Let Qualcomm and Samsung eat their lunch. As someone who worked related to those projects (PowerVR, which supplied graphics IP for some of those devices, on Android so other OSs may have a different view), I am completely not surprised they didn't go anywhere. This was a good few years ago - I no longer work for PowerVR, and Intel seem to have completely given up on the market for some time. My memory isn't likely prefect, but I can give broad strokes. It always felt like "Having" to go to PowerVR was an embarrassment for the teams, they kept trying to replace us with their internal GPU architecture, presumably completely fail to hit any power/performance targets, then last second call us again and try to rush everything through. Then, it feels like most of the time they drop the entire project before it made release anyway. The teams that we worked with never felt high status - all the engineers we spoke to were either on that team because they couldn't move internally to something more prestigious due to some internal politics, or were actively in the process of changing teams. There were times where our internal engineering contacts changed monthly, if we had any engineering-level communication at all. There's also some weird public claims about things around this - like PowerVR not providing driver source or similar, but that's simply not true. As the person packaging up the releases, they were only source releases, no obfuscation, with full documentation and build instructions. The PowerVR driver model generally meant releasing a "reference" driver as source, with hooks for customers to hook up to their specific SoC implementation (think stuff like setting clocks, power management, bus endpoints etc.). The supplied package only had a couple of example backends. While one of those may have been an Intel chip, it was only minimally setup in order to make the graphics work for PowerVR testing. It was simply not possible to release a binary-only driver. But I've seen this claimed on a number of tech forums - often from people claiming to have knowledge from the Intel side, and if that's true and not exaggeration, I can only assume it's due to lack of communication between teams internal to Intel. I can assure you, someone in Intel had the full driver source. Though WRT the internal communications, I sometimes saw this from the other side - we dealt with 2 Intel teams with different SoCs they intended to build, and it felt like 2 different companies. They never shared anything between them, almost as if they never spoke at all, and seemed resistant to changing that. I have no idea why, I guess it's just how their management structure is setup? If you go through all that and end up with an actually good product, I feel it'll be almost luck rather than anything else.
pclmulqdq 4y ago
> 2) Missed too many ticks and replaced them with tocks. Fell far behind because of ridiculous tilt-at-windmill folly around Itanium and other architectural decisions that absolutely didn't pay off. Ended up taking way too long to get further down on process size. I applied to Intel's architecture group in 2015, and when I asked one interviewer "does Intel have a strategy if TSMC catches up on process tech?" I was left with a blank stare, as though nobody in the group had contemplated the possibility. I didn't end up working there... That said, Intel got exceptionally unlucky on which technologies they pursued and which they didn't, so I hope they can turn things around. They missed on through-silicon vias and chiplets, EUV, Cobalt wires, and several low-power transistor technologies.
- hedgehog 4y ago
  The fab business is very sensitive to scale, with enough money and discipline you can mostly make your own luck. TSMC does way more volume than Intel and they have a very aggressive customer (Apple) that can help work out early quirks and guarantee orders on new nodes before they're economical for anyone else. I don't know what a turn around might look like but it's a tough problem.
  - pedrocr 4y ago
    > TSMC does way more volume than Intel Do you have a source for this? The only one I found says Intel is 2x TSMC: https://www.statista.com/statistics/883715/microprocessor-market-share-worldwide-by-vendor/ https://www.statista.com/statistics/883715/microprocessor-ma...
    - sct202 4y ago
      That is revenue based, and not based who makes the chips. In the chart Nvidia, Broadcom and Qualcomm are all fabless (outsourced production) and their chips are made by TSMC, Samsung, or other foundries. By wafers produced (including memory), TSMC is 2nd and Intel is 6th. TSMC is 2x the 5th placed company on the table, so Intel is even smaller than that. https://www.eetimes.com/chipmakers-increase-share-of-global-ic-wafer-capacity-to-57/ https://www.eetimes.com/chipmakers-increase-share-of-global-...
0cf8612b2e1e 4y ago

hn_throwaway_99 4y ago

> It's absolutely incredible to watch these formerly phenomenally innovative companies falter at that very core competency of staying cutting edge but we see it happen over and over again. To be frank, I think that's a great thing. I don't want companies to stay giant in perpetuity, I think it's great that they are essentially "recycled" when new, better companies come along and eat their lunch. If anything I think it's quite bad that over the past 25ish years that a lot of big companies have really learned the lessons of "disruption" and have responded by just buying up the smaller but up-and-coming competition before they can overtake (looking at you Adobe and Figma).

srinivgp 4y ago
IF a company goes bad, it's great that new companies eat their lunch. It's bad for a company to go bad. It's bad for a company to lock out competition.
- BobbyJo 4y ago
  > It's bad for a company to go bad. Hard disagree, so I wonder what your basis for this bullet is. Agree on the other two though.
  - NikolaNovak 4y ago
    Not the op, but: 1. Tautological: from company's perspective, it's bad for the company (itself) to go bad. 2. More broadly, it's reasonably self-evident that it's bad for employees, and bad for shareholders of a company, for that company to go bad 3. Where we can have discussions, and probably for a long and fun if not necessarily fruitful time, is whether it's "good" or "bad" from market's, or consumer's perspective for companies to go bad. I personally think not. I think we'll likely mostly agree that it's good for market to filter out and punish bad companies or companies that go bad, once they go bad, for whatever reason; but that doesn't necessarily imply or follow that's it's good for companies to go bad. In other words, what's your perspective/bias - why would it be GOOD for a company to go bad? Why would it not be absolutely fantastically wonderful if all companies perpetually stayed good and we lived in utopia of rainbows and unicorns? :> (all this without defining what "company going bad" means, left as an exercise for the student :)
    - BobbyJo 4y ago
      > Where we can have discussions, and probably for a long and fun if not necessarily fruitful time, is whether it's "good" or "bad" from market's, or consumer's perspective for companies to go bad. I personally think not. Generally where my head was at. The other two points were better scoped. I personally think it's good that companies go bad, as it moves control over productive assets from one group to another. This is good for society for a variety of reasons, not the least of which is enabling new ideas to be tried. Can a long lived company try new ideas? sure, but the degree to which they avoid risks (if they live a long time they necessarily avoid undo risk) puts on upper bound on how ambitious they are with new things.
  - srinivgp 4y ago
    Things going bad is bad. Dying is bad. Etc etc. Sometimes on net things are good because of other effects like "ah, promising new competitor gets a chance to shine!" but if you could have _both_, you absolutely _would_. A company going bad is a _cost paid_ for new blood, not an _added benefit_. It's not good that you have 100 fewer hours when you spend 100 hours creating something awesome. It's bad that you have 100 fewer hours. If you could create the same awesome thing and still have those 100 hours to do something else, that'd be fantastic. All other things being equal, I would far rather Intel be awesome than not. If it turns out the world is such that all other things can't be equal, it might be worth having Intel not be awesome in favor of other benefits, but I'm never going to be _happy_ about Intel not being awesome.
jrockway 4y ago
> I think it's great that they are essentially "recycled" when new, better companies come along and eat their lunch. Don't you have on the order of tens of thousands of dollars invested in Intel through retirement savings, though? When S&P 500 companies fail, your retirement savings become worthless. (Apple is really the one you want to watch out for, though!)
- pantulis 4y ago
  Not a US citizen, but aren't the retirement funds managed by someone who should be held responsible for not diversifying?
  - katmannthree 4y ago
    Whether or not they're ``held responsible'' to the degree anyone in such a position in the US is (i.e. lolno), grocery stores and retirement homes do not accept epicaricacy as payment.
  - jrockway 4y ago
    Retirement funds do pretty OK here. Early in your career you'll mostly hold something like an S&P 500 index fund or a total stock market fund, as you get closer to retirement they shift the allocation towards safer investments. I don't love this; the total stock market is a lot of tech companies, and I already have plenty of exposure to tech by working in the field. It's a good heuristic for most people, though. (And no, I don't do anything about this underlying fear of tech sector exposure. I just buy the Target Date 20XX funds like everyone else.) My only point is that the grandparent comment generally expects companies to die when they get into the S&P 500. If that's true, we're all screwed. If one S&P 500 is just stealing business from some other S&P 500 company, though, it's probably a net gain. But if it's some privately owned startup, then it's not as concrete a win, and let's be honest, startups are driving a lot of the innovation in tech.
    - JamesianP 4y ago
      Which retirement funds are doing ok this time around? They typically switch to bonds which thanks to inflation are down something like 20 percent in the last year (some more like 30), despite yielding far less than stocks in the best of times.
jason-phillips 4y ago
> I think that's a great thing. I don't want companies to stay giant in perpetuity... Except that semiconductors are a national security issue at the moment.
- indymike 4y ago
  > Except that semiconductors are a national security issue at the moment. Maybe too big is a national security issue, too. Too big to fail is a real problem for any part of our economy.
  - icapybara 4y ago
    Computer chips are a product that is only possible to produce at the largest scales. Everything, from the supply chain to design to manufacturing, is a globalized effort. You’ll never have small mom and pop fabs.
    - wongarsu 4y ago
      If everyone realizes it's a national security issue, that might change. Sure, US, EU and China have players in the industry and can attract fabs with a bit of incentive, but what if Russia or India or Pakistan or Brazil or Iran want to ensure a steady supply even under sanctions? Some of them might open up smaller fabs that might not be economically viable but are of strategic importance.
      - selimthegrim 4y ago
        Doesn’t Malaysia have fabs? Singapore?
    - bluGill 4y ago
      You could fab chips in your basement. However your costs per chip would be in the tens of thousands each for basic chips. Large scales allows making those same chips for less than a dime each.
MichaelBurge 4y ago
There's no guarantee semiconductor fabs will be recycled. If TSMC shuts down due to political turmoil, Intel decides to halt all R&D and milk their new monopoly, then hardware progress could simply stall with no new competitor rising. An investor would need to front many billions of dollars for an uncertain payoff over a decade or two, and Intel could at any moment become competent again. And if no investor is willing to take that risk, there would be no new competitor. Adobe and Figma are software companies, so don't require capital investment. So if one shuts down, it's relatively easy to make a new UI modeling tool(or for an existing one to take over their customers).
eecc 4y ago
That's all very nice and yeah, we've all read the essay about "creative destruction" but what happens to the Intellectual Capital that gets annihilated, sold pennies on the dollar and left to whither in useless portfolio trusts. It's a disastrous process, I passionately hate it

dexwiz 4y ago

To add to the list their 5G modem chip also failed in recent years. They sold their mobile division to Apple who then indirectly laid off a ton of staff by making them reapply and interview for their existing positions.

chongli 4y ago

Completely missed the boat on mobile I think their main error was short-termism. They were addicted to high margin (workstation/server) devices. They had no interest in the low margins of mobile devices. They could not imagine how low-power devices would take over the world.

magicloop 4y ago
Actually that is the "Innovator's Dilemma" in action. Managers will always prefer to safeguard and enhance the high margin aspects of the business and discourage/under-invest in low margin disruptor aspects of the business due to cannibalization of profits and thus missing profit guidance for the quarter (thus losing compensation personally). They knew the tide was changing but organisation dynamics prevents a course correction. Only a few companies can buck the Innovator's Dilemma, usually only founder led enterprises with significant control.
- wahern 4y ago
  > missing profit guidance for the quarter The Innovator's Dilemma isn't about missing quarterly guidance. The dilemma is that it's perfectly rational and profit maximizing to continue focusing on your cash cow even when obsolescence is a foregone conclusion. It wouldn't be a true dilemma, otherwise. The incumbent is the only player that can maximally squeeze the very considerable remaining profits from old technology, and they should do so with gusto. Moreover, switching to new technologies comes with more risk, even when it seems obvious what the new market will look like because the old market has almost zero risk--it's completely proven. All the "solutions" to avoid the dilemma, like selling the old technology to take future profits and then pivoting to the new market, are just corporate branding shell games. They might even be in fact sub-optimal, but in any event the fundamental dynamics remain the same.
  - noobermin 4y ago
    Except it didn't actually work out. It worked out at the time, and thus was "perfectly rational" then but rationality should not have a limited time horizon because then it is limited. This is the problem with short-term thinking, it eventually leads to loss.

intrasight 4y ago

> unforced errors and mismanaged No. Managing innovation at the scale of Intel is a challenge. And their customer base (PCs and servers) is shrinking. Also, this is only like 15% of the workforce. Which is only 5% more than a typical culling.

makestuff 4y ago

Also they are losing share in the datacenter space as well. AWS is fabricating their own chips for gravitron instances as well as some other special types. GCP has been doing this for awhile with their ML chips, and I am sure Azure is moving in that direction too. It looks like they will take the path of IBM where they are still massive due to legacy users not moving off of them, but it will be hard to capture new market share without some massive change happening.

christkv 4y ago

Never understood why they did not just get a new ARM license and make a mobile chip it was not like they were going to impact existing business.

cowmix 4y ago

I've typed this before but I'll type it again here. About 10 years ago I ran the local Python Meetup group here in Phoenix. Intel had/has a big presence here and one of they guys who worked on the Atom team (doing compiler optimizations for that chip family) told us (at one of the Meetups)Intel corporate didn't like how good a processor Atom was shaping up to be. They were worried it would start to cannibalize their desktop and server processor lines -- so they did everything possible to cripple its development. He and his whole team were furious.

xwolfi 4y ago
All that to end up with giant cloud providers selling arm servers...
spfzero 4y ago
If someone is going to eat your current business, it's better if it is you. Fear of cannibalization is basically, "our customers will find out we have an even better product for them than the one they are currently buying from us." It's a good thing for your customers, and it's good for the long-term competitiveness of your company.
- Sylamore 4y ago
  I've always told my business partners when discussing future products that if you aren't afraid to cannibalize your own revenue streams, your competitor (or another internal team) will.
- deleted 4y ago
  [deleted]
tuatoru 4y ago
SOP. IBM crippled the AS/400 when it looked like it could eat into their mainframe business, for example. It's the innovator's dilemma. 1. https://en.wikipedia.org/wiki/The_Innovator's_Dilemma https://en.wikipedia.org/wiki/The_Innovator's_Dilemma
nprateem 4y ago

jws 4y ago

Itanium was a bet that seemed the way forward at the time. Making an x86 instruction set processor that did on the fly analysis and conversion to a superscalar computation core sounded really hard, so VLIW was the safe "we'll do the superscalar decomposition at compilation time and run that". Turned out to be a bad bet because a miracle¹ occurred on the other side. I think of it as a peer to the 2005 proposition that electric cars didn't need to be golf carts and the technology was coming into place to make high performance, real cars that were purely electric. Could have been true. As they say "very dangerous, you go first." That one paid off. I wonder if there is a list of large dollar, novel, engineering expeditions and how they turned out. ␄ ¹ Where "miracle" means some really smart people worked really hard at it for a long time.

klelatti 4y ago
I’m not sure the timeline really works for this argument. Pentium was the first x86 superscalar and that was 1993 so it predates Itanium. Rather Intel wanted to leave the baggage of x86 behind, segment the market for higher profits and hoped to get better performance than superscalar x86. But they never achieved the latter and most people just wanted 64 bit and software compatibility.
jcranmer 4y ago
> Making an x86 instruction set processor that did on the fly analysis and conversion to a superscalar computation core sounded really hard, so VLIW was the safe "we'll do the superscalar decomposition at compilation time and run that". The first superscalar x86 processor was the Pentium, which came out in checks notes 1993 (Wikipedia claims design work started in 1989, hit working simulation in 1990 and taped out in 1992). Intel didn't start work on Itanium until 1994, after Pentiums were already shipping to customers, and Itanium itself wouldn't ship until 2001.
bsder 4y ago
Itanium was a gigabuck and drove everybody out of the high-end processor market except IBM leaving Xeon for Intel to monopolize for a decade+. I'd qualify that as a business success even if Itanium was a technical failure. And, it may be paying off after all. Graphics cards are effectively giant VLIW machines. And while Intel's new cards get slaughtered on DirectX 11 or older games, they are quite competitive when used on the DirectX 12+ stuff which basically wants a giant multi-core parallel processor.

causi 4y ago

1) Completely missed the boat on mobile. Their ARM-competitive chips (Atom, etc.)... weren't. Missed on every measure from power to performance. Let Qualcomm and Samsung eat their lunch. I'm gonna add the caveat that the failure didn't happen out of the gate. Xscale was leagues ahead of anything else two decades ago. Atom stumbled at the start but Cherry Trail had a better price to performance ratio than anything that followed it. Intel's failure was nothing but pure avarice.

bluGill 4y ago
In this market what counts is performance/watt ratio. Battery power is a big selling point for cell phones, and so you can charge a bit more for less watts. Though of course price does matter too. There are also embedded markets where you have to be passively cooled, again watts matter. My impression is Intel hit the price for embedded just fine, but at higher watts, and thus they can't compete.
- causi 4y ago
  In this market what counts is performance/watt ratio. That was also excellent for Cherry Trail, with an SDP of 2 watts. When you have some time sit down and compare the benchmarks from a Cherry Trail tablet like the Surface 3 and its successor chips like the 4415Y. The 4415Y like the one in the Surface Go is three years newer, has a 60% higher TDP, a Recommended Customer Price over four times higher, and while its 3D chops are better it actually benchmarks lower than the Cherry Trail chip in PCMark.

sidewndr46 4y ago

Itanium dates back to 2001. It was "discontinued" in 2020, but as we've learned it was only being continued because HP was footing the bill. It really doesn't have anything to do with Intel's current problems. Intel was basically past the Itanium debacle by 2010.

kimixa 4y ago

> 1) Completely missed the boat on mobile. Their ARM-competitive chips (Atom, etc.)... weren't. Missed on every measure from power to performance. Let Qualcomm and Samsung eat their lunch. As someone who worked related to those projects (PowerVR, which supplied graphics IP for some of those devices, on Android so other OSs may have a different view), I am completely not surprised they didn't go anywhere. This was a good few years ago - I no longer work for PowerVR, and Intel seem to have completely given up on the market for some time. My memory isn't likely prefect, but I can give broad strokes. It always felt like "Having" to go to PowerVR was an embarrassment for the teams, they kept trying to replace us with their internal GPU architecture, presumably completely fail to hit any power/performance targets, then last second call us again and try to rush everything through. Then, it feels like most of the time they drop the entire project before it made release anyway. The teams that we worked with never felt high status - all the engineers we spoke to were either on that team because they couldn't move internally to something more prestigious due to some internal politics, or were actively in the process of changing teams. There were times where our internal engineering contacts changed monthly, if we had any engineering-level communication at all. There's also some weird public claims about things around this - like PowerVR not providing driver source or similar, but that's simply not true. As the person packaging up the releases, they were only source releases, no obfuscation, with full documentation and build instructions. The PowerVR driver model generally meant releasing a "reference" driver as source, with hooks for customers to hook up to their specific SoC implementation (think stuff like setting clocks, power management, bus endpoints etc.). The supplied package only had a couple of example backends. While one of those may have been an Intel chip, it was only minimally setup in order to make the graphics work for PowerVR testing. It was simply not possible to release a binary-only driver. But I've seen this claimed on a number of tech forums - often from people claiming to have knowledge from the Intel side, and if that's true and not exaggeration, I can only assume it's due to lack of communication between teams internal to Intel. I can assure you, someone in Intel had the full driver source. Though WRT the internal communications, I sometimes saw this from the other side - we dealt with 2 Intel teams with different SoCs they intended to build, and it felt like 2 different companies. They never shared anything between them, almost as if they never spoke at all, and seemed resistant to changing that. I have no idea why, I guess it's just how their management structure is setup? If you go through all that and end up with an actually good product, I feel it'll be almost luck rather than anything else.

pclmulqdq 4y ago

> 2) Missed too many ticks and replaced them with tocks. Fell far behind because of ridiculous tilt-at-windmill folly around Itanium and other architectural decisions that absolutely didn't pay off. Ended up taking way too long to get further down on process size. I applied to Intel's architecture group in 2015, and when I asked one interviewer "does Intel have a strategy if TSMC catches up on process tech?" I was left with a blank stare, as though nobody in the group had contemplated the possibility. I didn't end up working there... That said, Intel got exceptionally unlucky on which technologies they pursued and which they didn't, so I hope they can turn things around. They missed on through-silicon vias and chiplets, EUV, Cobalt wires, and several low-power transistor technologies.

hedgehog 4y ago
The fab business is very sensitive to scale, with enough money and discipline you can mostly make your own luck. TSMC does way more volume than Intel and they have a very aggressive customer (Apple) that can help work out early quirks and guarantee orders on new nodes before they're economical for anyone else. I don't know what a turn around might look like but it's a tough problem.
- pedrocr 4y ago
  > TSMC does way more volume than Intel Do you have a source for this? The only one I found says Intel is 2x TSMC: https://www.statista.com/statistics/883715/microprocessor-market-share-worldwide-by-vendor/ https://www.statista.com/statistics/883715/microprocessor-ma...
  - sct202 4y ago
    That is revenue based, and not based who makes the chips. In the chart Nvidia, Broadcom and Qualcomm are all fabless (outsourced production) and their chips are made by TSMC, Samsung, or other foundries. By wafers produced (including memory), TSMC is 2nd and Intel is 6th. TSMC is 2x the 5th placed company on the table, so Intel is even smaller than that. https://www.eetimes.com/chipmakers-increase-share-of-global-ic-wafer-capacity-to-57/ https://www.eetimes.com/chipmakers-increase-share-of-global-...

0cf8612b2e1e 4y ago