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Intel and Google share surprisingly similar problems: an almost pathological inability to grow lines of business with new products because they kill them off to
by bane 3y ago
Intel and Google share surprisingly similar problems: an almost pathological inability to grow lines of business with new products because they kill them off too early. In Intel's case, it's even worse, they kill them off right before the market would have made them successful. They should own the "things with semiconductors" market, but instead financially engineered their way to focus only on higher profit core chip business which was good for the short term but has proved to be a festering cancer over the long.
Because of this approach they divested out of the memory business -- which has kept them out of the growing solid state business, screwed around with Optane, lost their modem business, have lost the GPU business at least once (who knows if they'll keep doing the ARC GPUs so maybe it'll increment up again), ARM chips, and numerous other bits and pieces over the years. Now they're losing their core business too and have nothing else to really grow and focus on.
Each of these is a multi-billion dollar market with core providers who dominate the market: Samsung, Broadcom, Nvidia, etc.
Now they're going to start selling off the bones of their business to compete with TSMC, a company with actual focus.
Once that goes away, what? Intel will contract TSMC to make their chips? I can see a financially focused MBA-type executive team seeing that as a way to eliminate expensive Fab R&D, construction and OEM liabilities -- put it on somebody else to deal with that!
- formerly_proven 3y agoIntel got out of memory when that became a complete commodity, similarly Intel sold their NAND business (now called Solidigm) a while ago to Hynix, because similarly NAND and SSDs are now commodities (in the sense of highly standardized, interchangeable product made by a large number of competing companies). It does make sense if you only wish to keep things where your company has unique advantages and doesn't need to compete solely on price in a commodity market.
- bane 3y agoYou are absolutely correct in the history to my recollection. But I'd challenge that it was a good idea as having multiple product lines better creates opportunities for new and unique products in different spaces. Optane is an example of where Intel tried to "fake it" but ended up producing a confused product that didn't leverage common industry knowledge in either the memory or solid state storage spaces. More towards a near future, Intel should be looking at compute-on-memory hardware, which promises to radically improve computation in a number of areas, and fundamentally would give them an "in" into neural network-like tech. Similarly, the companies that do produce NAND and SSD technologies seem to have figured out how to make money in a commoditized and highly competitive market.
- scrubs 3y agoI agree! When memory became a commodity --- there are periods in markets when nobody confers distinction --- then maybe you keep your hand in to break even or small profit. But keep your eye on the next evolutionary step. Compute co-located with memory (non von Neumann) is that step. With the hw, there'd be an opening for a next gen OS to run it.
- mike_hearn 3y agoHow did Optane represent faking it? It was and still is the fastest persistent storage ever made, no? I thought they killed it because of the difficulty of manufacturing it.
- bane 3y agoIt died because the first generation of Optane devices failed to take the market by storm and instead of advancing the technology they simply exited the market, eating all of the prior investment. Why they failed to take the market seems to be both a combination of lousy marketing (is it a drive, or are they RAM replacements?), selling only enterprise-class products, high prices, and competition technology that is both "good enough" and beats it in all of the other areas. Spec-wise, a Samsung 2TB 990 Pro, is about as fast (sustained, IOPS, etc.), a 10th the price, and is coming from a manufacturer with a reputation of sustaining development and releasing newer, better products in that product-line. If the part fails, you're likely to not only replace it, but upgrade it for the same cost.
- andromeduck 3y agoIDK - I think the hyperscaler market should have been the target market but yeah more academia/open source accessibility would have been cool.
- rektide 3y agoIt's extra bitter to see Intel exit NAND because they largely invented & drove NVMe. The p3700 was the first mainstream NVMe drive, July 2014, & is still a beast, still pleasantly fast with stable & high iops, albeit lacking in raw bandwidth. The before times were so awful. A sea of proprietary interfaces, dubious drivers. Intel identified a huge weak point in the ecosystem & created radical change where it was needed, taking something exotic & astronomically priced & building a stable better future, around what has always made PC so exceptional: standards. The flash industry was a mess, & Intel more than anyone made it real.
- deleted 3y ago[deleted]
- andromeduck 3y agoThe sucked at it though - kept trying to outsource, never paid enough to retain necessary talent even in discount markets like Canada.
- shadeslayer 3y agoAFAIK the Intel Alchemist die is already fabbed by TSMC [1] [1] https://en.wikipedia.org/wiki/Intel_Arc https://en.wikipedia.org/wiki/Intel_Arc
- sho_hn 3y ago> Intel will contract TSMC to make their chips? "Intel Battlemage, Celestial GPUs Are Booked in at TSMC: Report" https://www.tomshardware.com/news/intel-battlemage-celestial-gpus-tsmc-report https://www.tomshardware.com/news/intel-battlemage-celestial... Order recently deferred to late 2024, though.
- ethbr0 3y agoIntel is the poster child that if you want to run a giant business long term -- have independent, well-supported teams that deliver a profitable product on their own... and are insulated from being fucked with by anyone in the management chain. Modern Intel would have shut down the Haifa team, which would have been an existential problem when Netburst reached the end of the line unexpectedly early. At that scale, you need to keep teams/options around simply to retain expertise and hedge your tech bets.
- causi 3y agoPersonally I think Intel lost the plot around the time they killed Atom. Atom launched as a garbage product, then they spent a decade refining it into an incredible combination of price, performance, and power consumption. Then they killed it and replaced it with processors that offered barely 10% better performance per watt at five times the MSRP and they wonder why the Intel tablet market is dead. It's dead because they strangled it in the crib by pretending Pentium Gold Y-series was an adequate successor to Cherry Trail.
- srj 3y agoThey also killed off larrabee right before the GPU market took off. Even if they were behind on it there was so much potential.
- andromeduck 3y agoKilling larrabee was the right move. That project was a joke architecturally - they got absolutely nothing right. Wrong problem, wrong solution, wrong time, poorly executed.
- squater 3y agoThey didn't kill off the Atom line, they just dropped the Atom naming [0][1]. They are typically also dirt cheap [2]. [0] https://en.wikipedia.org/wiki/Tremont_(microarchitecture) https://en.wikipedia.org/wiki/Tremont_(microarchitecture) [1] https://en.wikipedia.org/wiki/Gracemont_(microarchitecture) https://en.wikipedia.org/wiki/Gracemont_(microarchitecture) [2] https://www.amazon.com/GMKtec-Nucbox5-Desktop-Computer-Windows/dp/B0B75PT2RY/ref=sr_1_1_sspa?crid=20WL76POHH85H&keywords=nucbox5&qid=1682699387&sprefix=nucbox5%2Caps%2C89&sr=8-1-spons&ufe=app_do%3Aamzn1.fos.f5122f16-c3e8-4386-bf32-63e904010ad0&spLa=ZW5jcnlwdGVkUXVhbGlmaWVyPUExUFRIMDAwODk1VzdDJmVuY3J5cHRlZElkPUEwMDkwODY0MUY0QVBPMkxZNVRaNSZlbmNyeXB0ZWRBZElkPUEwMjM1MTc1MVZVVzIyRkQ0MU1aUiZ3aWRnZXROYW1lPXNwX2F0ZiZhY3Rpb249Y2xpY2tSZWRpcmVjdCZkb05vdExvZ0NsaWNrPXRydWU&th=1 https://www.amazon.com/GMKtec-Nucbox5-Desktop-Computer-Windo...
- giantrobot 3y agoI think Intel's tablet ambitions and their larger Atom ambitions died because they tied them to Microsoft. The Atom could have been bundled as an easy to integrate SoC for things like set top boxes, routers, and smart devices running Linux/Android The sort of uses that go for MediaTek or AllWinner ARM SoCs. Intel had all the peripheral IPs to make competitive offerings. Instead they put the Windows millstone around the Atoms' neck and the chip sucked. Intel based tablets sucked because Windows was a dog shit OS for low end devices. The few Atom based Android tablets that got made were pretty decent devices. I've got a bunch of Bay Trail devices lying around. The ones I've put Linux on end up being very useful little devices that run very well. My Windows Bay Trail tablets are just e-waste at this point. They're difficult to use at best and typically just slow pieces of crap.
- irisgrunn 3y agoThis is incredibly similar to what's happening (has happened) to Philips.
- throwaway2037 3y agoCan you explain more? I also sense the Philips is a fading giant, but I struggle to a put a finger on it. Part of it might be that it is constantly spinning out divisions into separate companies.
- masklinn 3y agoThey don’t just spin out divisions, they keep spinning out innovative and revenue generating divisions, leaving Philips with no ability to do anything, and with what they’re currently doing: selling the brand for Chinese white-labels to put on their product as they try to move up the chain. Essentially Philips had spent 30 years selling the bones of the group, leaving just a skin-suit. Which they’re now selling as well.
- sho_hn 3y agoHere's a video essay on this: https://youtu.be/WE58YisgFeQ https://youtu.be/WE58YisgFeQ
- andromeduck 3y agoGood for investors at least.
- BeetleB 3y ago> Intel will contract TSMC to make their chips? They've been using TSMC for various parts/chips for probably 5 years now.
- j_walter 3y agoThey have been using TSMC for a few decades for many of their chips. The last ~5 years has been the cutting edge chips...but they still have a lot of old chips made by TSMC still (think ethernet controller chips, etc).
- cyanydeez 3y agoI believe this is handwaving for Intel. Intel lost money because computing started moving towards GPU architecture and AMD has both beat them in low power CPU and offer cheap GPU. That's all. They were too late to GPU sales.
- matthewdgreen 3y agoIs there really a “too late” here? GPU sales today are probably a small fraction of future AI (TPU?) chip sales. Seems like Intel should be racing in this direction no matter how long it takes them to catch up, no matter how unprofitable it is in the short term. But maybe there’s something fundamental that ensures they’ll never catch up?
- pas 3y agomanagement issues, comp issues. those are not fundamental, but it seems an awfully sticky sauce, and they seem neck deep in these.
- darth_avocado 3y ago> but instead financially engineered their way to focus only on higher profit You explained the core of the problem that usually gets little blame. Successful companies get infiltrated by Wall Street MBA types who make decisions for the short term to manipulate the stock price because their own compensation structures help encourage that behavior. Companies, especially like Intel should be built for being resilient over decades instead of maximizing profits by the quarter.
- dghughes 3y agoLike Bed, Bath and Beyond. Obsessing over their stock price and ran out of cash to buy actual things to sell. Now bankrupt.
- nemothekid 3y ago>Successful companies get infiltrated by Wall Street MBA types who make decisions for the short term to manipulate the stock price This really applies for Intel, but for Google, I think it's less so. I've been thinking you have to look at incentives and at a large corporation everyone is incentivized to make the most amount of money in the shortest amount of time. If you really want to spend years hammering away at something, it made more sense to just start your own company doing that where you would reap most of the benefits through equity. There is no reason for someone to spend years at Google on a project that is seemingly going nowhere; they would struggle to get promoted, and if it does work out, most of the value will go to existing shareholders.
- startupsfail 3y agoWhy not? Getting a project up is a struggle anyway. And it’s a trade off between the upside and downside risk. At Google there is little downside risk and upside is reasonable. One or two experienced and passionate engineers, hammering away, amplified by a big company can compete with a startup.
- nemothekid 3y agoThe downside risk is only marginally different. If you are "passionate" engineer at Google, going to startup means making 150k rather than 350k. Don't get me wrong, 200k is a lot, even in the bay area, but it's not like you are destitute. If it doesn't work out you can always return to Google. The upside is completely different. Secondly, you are also at the mercy at your VPs, who got to that position by also maximizing short term results. A VC may not have the tools to force you to pivot if you are making ump-teen million dollars in year 1, but a VP may decide to kill your project to move more experienced engineers to another pet project. A passionate engineer at a pet project is an anomaly at a large corporation, who also has to fight the political winds of people trying to maximize their short term gains. And I don't think those people are wrong, it's the rational thing to do, especially when any equity upside will go largely to existing shareholders.
- jandrese 3y agoI think Intel missed the boat when they refused to accept third party fabbing back when they were process node leaders. So instead that business went to TSMC and other competitors and made so much money that those companies were able to overtake Intel and are far more diversified so they don't live and die on the PC market. At the time everybody was saying "of course Intel isn't going to fab AMD chips, that would be crazy", but in the end the crazy thing was giving up market dominance.
- papercrane 3y agoSeems like a theme with Intel. Back in the 80s Acorn was evaluating using Intel's 286, but Intel didn't want to work with them so they ended up making their own CPU, which directly led to ARM.
- sidewndr46 3y agoARC GPUs are basically dead on launch. It's not competitive in any way and fundamentally broken upon release. Intel integrated graphics works because it's a value-add to an expensive component already necessary for many computing products. ARC GPUs is basically Intel expecting the market to be the beta tester for a very expensive & inferior product.
- kazen44 3y agovery expensive product? have you seen GPU prices lately? The intel a770 is quite a good deal, especially considering you get 16GB of vram when the competitors only offer this at a far higher price. I kind of agree with you that the product has had issues at launch, a lot of them are resolved however. Also, linux support is superb compared to nvidia.
- mepian 3y agoFundamentally broken? How?
- throw0101b 3y ago> but instead financially engineered their way to focus only on higher profit See also Boeing (?).