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Intel has truly been on a remarkable spree of extremely poor strategic decisions for the last 20 years or so. Missed the boat on mobile, missed the boat on GPUs

Intel has truly been on a remarkable spree of extremely poor strategic decisions for the last 20 years or so. Missed the boat on mobile, missed the boat on GPUs and AI, focused too much on desktop, and now AMD and ARM-based chips are eating their lunch in the data centre area.

danielmarkbruce 3y ago
They ran it for max profit in an era when strategic investments needed to be made. It's remarkably common and heavily incentivized.
RachelF 3y ago
No, they were on the boat, they just mis-managed it. They used to make Arm chips, but sold it off just before the first iPhone was released as they saw no future in mobile CPUs. Same with network processors for routers around the same time. They have been trying half-heartedly with GPUs on and off since the late 1990's i740 series. The root cause is probably the management mantra "focus on core competencies". They had an effective monopoly on fast CPUs from 2007 until 2018. This monopoly meant very little improvement in CPU speed.
Mistletoe 3y ago
Is it just the fate of large successful companies? The parallels with Boeing always come to mind. We’ve seen this play out so many times through history, it’s why investing in the top companies of your era is a terrible idea. https://money.cnn.com/magazines/fortune/fortune500_archive/full/1981/ https://money.cnn.com/magazines/fortune/fortune500_archive/f... I wonder how many of our companies will survive at the top for even 20 more years? https://companiesmarketcap.com/ https://companiesmarketcap.com/ Berkshire is the only one I feel sure about because they hold lots of different companies.
- tru3_power 3y ago
  Market forces are hard to fight sometimes. Look at Meta- they were beaten like hell cuz of their metaverse bet.
  - scarface_74 3y ago
    Am I missing something? Meta looks like it’s at an all time high
  - HDThoreaun 3y ago
    Meta was beaten because investors were worried Mark had gone rogue. Now that hes laid a bunch of people off to show that the investors are in control theyre cool with the metaverse.
    - lotsofpulp 3y ago
      Or maybe it has something to do with their amazing net income trend in recent quarters: https://www.macrotrends.net/stocks/charts/META/meta-platforms/net-income https://www.macrotrends.net/stocks/charts/META/meta-platform...
- zeusk 3y ago
  Apple makes 40% of Berkshire's investment portfolio
  - lotsofpulp 3y ago
    https://www.cnbc.com/berkshire-hathaway-portfolio/ https://www.cnbc.com/berkshire-hathaway-portfolio/ As of Nov 2023, BRK has ~915.5M AAPL shares, with a market cap of $172B. BRK’s market cap is $840B. Per the CNBC link, the market cap of BRK’s AAPL holding is 46% of the market cap of BRK’s publicly listed holdings, but BRK’s market cap being much higher than $172B/46% means there is $840B - $374B = $466B worth of market cap in BRK’s non publicly listed assets. I would say $172/$840 = 20% is more representative of BRK’s AAPL proportion.
B1FF_PSUVM 3y ago
And the manufacturing failed to save them: [...] when Intel’s manufacturing prowess hit a wall Intel’s designs were exposed. Gelsinger told me: 'So all of a sudden, as Warren Buffet says, “You don’t know who’s swimming naked until the tide goes out.” [...]'
ternaryoperator 3y ago
You're missing the big one: they missed the boat on 64-bits. It was only because they had a licensing agreement in place with AMD that they were able to wholesale adopt AMD's extensions to deliver 64-bit x86 processors.
- oldgradstudent 3y ago
  They didn't simply miss the boat on 64 bit. That was an intentional act to force customers into Itanium, which was 64 bit from the outset.
- FullyFunctional 3y ago
  That's not at all what happened. Intel's 64-bit story was EPIC/IA-64/Itanium and it was an attempt to gain monopoly and keep x86 for the low-end. AMD64 and Itanic derailed that idea so completely that Intel was forced by Microsoft to adopt the AMD64 ISA. Microsoft refused to port to yet-another incompatible ISA. Had Itanium been a success then Intel would have crushed the competition (however it did succeed in killing Alpha, SPARC, and workstation MIPS).
  - mgerdts 3y ago
    I don’t think it was Itanium that killed SPARC. On workstations it was improved reliability of Windows and to some extent Linux. Sun tried to combat this with lower cost systems like the Ultra 5, Ultra 10, and Blade 100. Sun fanatics dismissed these systems because they were to PC like. PC fanatics saw them as overpriced and unfamiliar. With academic pricing, a $3500 Ultra 10 with 512 MB of RAM and an awful IDE drive ran circles around a $10000 HP C180 with 128 MB of RAM and an OK SCSI drive because the Sun never had to hit swap. I think Dell and HP x86 PC workstations with similar specs as the Ultra 10 were a bit cheaper. On servers, 32 bit x86 was doing wonders for small workloads. AMD64 quickly chipped away at the places where 1-4 processor SPARC would have previously been used.
    - FullyFunctional 3y ago
      Fair point, Itanium's impact on SPARC might be less than I stated, but Alpha is very clearly documented.
nine_k 3y ago
Xeon is not something people normally run on desktops. Datacenters were and still are full of monstrous Xeons, and for a good reason.
- nullhole 3y ago
  > Datacenters were and still are full of monstrous Xeons, and for a good reason. To ask the foolish question, why? My guess would be power efficiency. I've only ever seen them in workstations, and in that use-case it was the number of cores that was the main advantage.
  - asd4 3y ago
    They seem to gate ECC support behind Xeon for higher end processors. You see ECC memory in a lot of workstation class machines.
  - nine_k 3y ago
    It's a compact package with many cores, lots of cache memory, lots or RAM lanes, and lots of PCI lanes. All within a large but manageably hot crystal. Space and power in datacenters are at a premium; packing so many pretty decent cores into one CPU allows to run a ton of cloud VMs on a physically compact server. AMD EPYC, by the way, follows the same dtatcenter-oriented pattern.
whalesalad 3y ago
They still dominate PC’s and the server market.
- djha-skin 3y ago
  I run all my workloads in AWS on armchips. It's half the cost for just as good of an experience on my side.
  - paulmd 3y ago
    Cloud providers are very careful to make sure of that - they have deliberately eschewed performance increases that are possible (and have occurred in the consumer market) in favor of keeping the “1 vcpu = 1 sandy bridge core” equivalence. The latest trend is those “dense cores” - what a shocking coincidence that it’s once again sandy bridge performance, and you just get more of them. They don’t want to be selling faster x86 CPUs in the cloud, they want you to buy more vcpu units instead, and they want those units to be arm. And that’s how they’ve structured their offerings. It’s not the limit of what’s possible, just what is currently the most profitable approach for Amazon and google.
- danielmarkbruce 3y ago
  The trend ain't their friend in those markets though. Many folks running server workloads on ARM and their customer base is drastically more concentrated and powerful than it once was. Apple has shown the way forward on PC chips. They are a dead company walking.
  - whalesalad 3y ago
    Very hyperbolic take. I agree there is serious competition elsewhere, but "dead company walking" is far from true.
    - danielmarkbruce 3y ago
      Time will tell. It's not meant to be hyperbolic - I'm short them and lots of others are and expect it will be a disaster going forward. There are obviously people on the other side of that trade with different expectations, so we will see.
megablast 3y ago
This is so common that it happens all the time with successful companies. They don't have to make good decisions. They have more than enough cash to keep making bad decision after bad decision, whereas a smaller company would collapse. Apple and Microsoft have both managed to avoid this, and been the exception.

danielmarkbruce 3y ago

They ran it for max profit in an era when strategic investments needed to be made. It's remarkably common and heavily incentivized.

RachelF 3y ago

No, they were on the boat, they just mis-managed it. They used to make Arm chips, but sold it off just before the first iPhone was released as they saw no future in mobile CPUs. Same with network processors for routers around the same time. They have been trying half-heartedly with GPUs on and off since the late 1990's i740 series. The root cause is probably the management mantra "focus on core competencies". They had an effective monopoly on fast CPUs from 2007 until 2018. This monopoly meant very little improvement in CPU speed.

Mistletoe 3y ago

Is it just the fate of large successful companies? The parallels with Boeing always come to mind. We’ve seen this play out so many times through history, it’s why investing in the top companies of your era is a terrible idea. https://money.cnn.com/magazines/fortune/fortune500_archive/full/1981/ https://money.cnn.com/magazines/fortune/fortune500_archive/f... I wonder how many of our companies will survive at the top for even 20 more years? https://companiesmarketcap.com/ https://companiesmarketcap.com/ Berkshire is the only one I feel sure about because they hold lots of different companies.

tru3_power 3y ago
Market forces are hard to fight sometimes. Look at Meta- they were beaten like hell cuz of their metaverse bet.
- scarface_74 3y ago
  Am I missing something? Meta looks like it’s at an all time high
- HDThoreaun 3y ago
  Meta was beaten because investors were worried Mark had gone rogue. Now that hes laid a bunch of people off to show that the investors are in control theyre cool with the metaverse.
  - lotsofpulp 3y ago
    Or maybe it has something to do with their amazing net income trend in recent quarters: https://www.macrotrends.net/stocks/charts/META/meta-platforms/net-income https://www.macrotrends.net/stocks/charts/META/meta-platform...
zeusk 3y ago
Apple makes 40% of Berkshire's investment portfolio
- lotsofpulp 3y ago
  https://www.cnbc.com/berkshire-hathaway-portfolio/ https://www.cnbc.com/berkshire-hathaway-portfolio/ As of Nov 2023, BRK has ~915.5M AAPL shares, with a market cap of $172B. BRK’s market cap is $840B. Per the CNBC link, the market cap of BRK’s AAPL holding is 46% of the market cap of BRK’s publicly listed holdings, but BRK’s market cap being much higher than $172B/46% means there is $840B - $374B = $466B worth of market cap in BRK’s non publicly listed assets. I would say $172/$840 = 20% is more representative of BRK’s AAPL proportion.

B1FF_PSUVM 3y ago

And the manufacturing failed to save them: [...] when Intel’s manufacturing prowess hit a wall Intel’s designs were exposed. Gelsinger told me: 'So all of a sudden, as Warren Buffet says, “You don’t know who’s swimming naked until the tide goes out.” [...]'

ternaryoperator 3y ago

You're missing the big one: they missed the boat on 64-bits. It was only because they had a licensing agreement in place with AMD that they were able to wholesale adopt AMD's extensions to deliver 64-bit x86 processors.

oldgradstudent 3y ago
They didn't simply miss the boat on 64 bit. That was an intentional act to force customers into Itanium, which was 64 bit from the outset.
FullyFunctional 3y ago
That's not at all what happened. Intel's 64-bit story was EPIC/IA-64/Itanium and it was an attempt to gain monopoly and keep x86 for the low-end. AMD64 and Itanic derailed that idea so completely that Intel was forced by Microsoft to adopt the AMD64 ISA. Microsoft refused to port to yet-another incompatible ISA. Had Itanium been a success then Intel would have crushed the competition (however it did succeed in killing Alpha, SPARC, and workstation MIPS).
- mgerdts 3y ago
  I don’t think it was Itanium that killed SPARC. On workstations it was improved reliability of Windows and to some extent Linux. Sun tried to combat this with lower cost systems like the Ultra 5, Ultra 10, and Blade 100. Sun fanatics dismissed these systems because they were to PC like. PC fanatics saw them as overpriced and unfamiliar. With academic pricing, a $3500 Ultra 10 with 512 MB of RAM and an awful IDE drive ran circles around a $10000 HP C180 with 128 MB of RAM and an OK SCSI drive because the Sun never had to hit swap. I think Dell and HP x86 PC workstations with similar specs as the Ultra 10 were a bit cheaper. On servers, 32 bit x86 was doing wonders for small workloads. AMD64 quickly chipped away at the places where 1-4 processor SPARC would have previously been used.
  - FullyFunctional 3y ago
    Fair point, Itanium's impact on SPARC might be less than I stated, but Alpha is very clearly documented.

nine_k 3y ago

Xeon is not something people normally run on desktops. Datacenters were and still are full of monstrous Xeons, and for a good reason.

nullhole 3y ago
> Datacenters were and still are full of monstrous Xeons, and for a good reason. To ask the foolish question, why? My guess would be power efficiency. I've only ever seen them in workstations, and in that use-case it was the number of cores that was the main advantage.
- asd4 3y ago
  They seem to gate ECC support behind Xeon for higher end processors. You see ECC memory in a lot of workstation class machines.
- nine_k 3y ago
  It's a compact package with many cores, lots of cache memory, lots or RAM lanes, and lots of PCI lanes. All within a large but manageably hot crystal. Space and power in datacenters are at a premium; packing so many pretty decent cores into one CPU allows to run a ton of cloud VMs on a physically compact server. AMD EPYC, by the way, follows the same dtatcenter-oriented pattern.

whalesalad 3y ago

They still dominate PC’s and the server market.

djha-skin 3y ago
I run all my workloads in AWS on armchips. It's half the cost for just as good of an experience on my side.
- paulmd 3y ago
  Cloud providers are very careful to make sure of that - they have deliberately eschewed performance increases that are possible (and have occurred in the consumer market) in favor of keeping the “1 vcpu = 1 sandy bridge core” equivalence. The latest trend is those “dense cores” - what a shocking coincidence that it’s once again sandy bridge performance, and you just get more of them. They don’t want to be selling faster x86 CPUs in the cloud, they want you to buy more vcpu units instead, and they want those units to be arm. And that’s how they’ve structured their offerings. It’s not the limit of what’s possible, just what is currently the most profitable approach for Amazon and google.
danielmarkbruce 3y ago
The trend ain't their friend in those markets though. Many folks running server workloads on ARM and their customer base is drastically more concentrated and powerful than it once was. Apple has shown the way forward on PC chips. They are a dead company walking.
- whalesalad 3y ago
  Very hyperbolic take. I agree there is serious competition elsewhere, but "dead company walking" is far from true.
  - danielmarkbruce 3y ago
    Time will tell. It's not meant to be hyperbolic - I'm short them and lots of others are and expect it will be a disaster going forward. There are obviously people on the other side of that trade with different expectations, so we will see.

megablast 3y ago

This is so common that it happens all the time with successful companies. They don't have to make good decisions. They have more than enough cash to keep making bad decision after bad decision, whereas a smaller company would collapse. Apple and Microsoft have both managed to avoid this, and been the exception.