4 ms·

We're living through the silicon age and Intel has made a total dog's breakfast of it. Stagnant revenues, falling profits. Both should have been growing geomet

We're living through the silicon age and Intel has made a total dog's breakfast of it. Stagnant revenues, falling profits. Both should have been growing geometrically. Just compare these companies: https://valustox.com/INTC https://valustox.com/INTC https://valustox.com/AMD https://valustox.com/AMD https://valustox.com/AVGO https://valustox.com/AVGO https://valustox.com/AMAT https://valustox.com/AMAT Even Qualcomm has seen good growth: https://valustox.com/QCOM https://valustox.com/QCOM This is how it's done: https://valustox.com/NVDA https://valustox.com/NVDA EDIT these guys aren't primarily chipmakers, but they're deriving at least a couple of $Bn per year from making good ones: https://valustox.com/AAPL https://valustox.com/AAPL

hardware2win 3y ago
No shock that profits are failing when they are investing heavily
- FredPret 3y ago
  I'm not an accountant but they should be able to capitalize expenses incurred when it's an investment, ie, since it's not really a normal expense profit should not be affected. I'm not sure how that works with R&D engineering salaries - that might impact their profits even if it's an investment. I feel like a large technology company should spend a large but consistent amount of money on R&D - I don't like wild swings either way.
  - maerF0x0 3y ago
    Also not an accountant, but i believe you two are talking differently about gaap and nongaap profit. The latter can immediately write of R&D, where as GAAP has rules around deprecation of investments.
pkulak 3y ago
Well, you can chase short term profit and send your designs off to TSMC, or you can own your own foundry. This is exactly why it's in the interest of the US government to ensure that Intel doesn't totally abandon US manufacturing just like AMD did years ago.
- FredPret 3y ago
  Not saying INTC isn't valuable - just saying they seem to have missed the boat in a big way and changes are in order. The US does of course need on-shore chip foundries for strategic reasons.
  - rileyphone 3y ago
    Pat Gelsinger only returned 3 years ago, it just takes a while for changes to propagate through an org as large as Intel.
    - FredPret 3y ago
      I hope you turn out to be right.
    - markhahn 3y ago
      +1 this. Intel let MBA-think drive too many decisions (ie EUV). Maybe there was some misperception there, even cultural bias. Pat's biggest real change has been to push the company towards process leadership. They always had good designs, though perhaps also damaged by MBA-think there too. Still not sure about the decision to get out of non-volatile memory, though perhaps that was just a scope decision. Obviously, you could make a pretty amazing AI device with a whole bunch of NVM in-package...
  - mywittyname 3y ago
    It was not obvious to Intel leadership that the future of manufacturing was to become a contracted fabricator of the design of other companies. Vertical integration and total control over both design and manufacture of chips was the obvious (and, until recently) successful path. What board would keep an Intel CEO that presented the idea of shifting the primary focus of the company to manufacturing the designs of other companies whose products are in direct competition to Intel? Intel is a perfect example of why companies need to regularly kill their old selves in order to survive. But it's also a perfect example of why so many companies fail to do so, since it often involves making what appears to be a terrible decision at the time, and convincing a bunch of people who know better to back you up. Very few leaders have the clout to pull this off. The success of TSCM was the result of an interesting confluence of events: including the existence of ARM; Apple deciding that they were going to design their own hardware and outsource its manufacture; Nvidia developing CUDA; and the machine learning/AI revolution that drove demand for Nvidia cards. If you take away any of those pieces, I think TSCM doesn't become the powerhouse it is today.
metaphor 3y ago
How do you come off with a straight face attempting to compare a bunch of fabless design houses with a company that actually owns the infrastructure and processes to make tangible products, even if not the prevailing sexiest thing? You're living in a bubble if you think the biggest money printer in the world actually cares about the historical performance of your cherry-picked stock comparisons.
- ETHisso2017 3y ago
  Then let's look at TSMC: https://valustox.com/TSM https://valustox.com/TSM
  - metaphor 3y ago
    I've been looking for TSMC within the domestic borders of CONUS for longer than you might imagine. Reiterating, the money printer doesn't give a flying fuck about stock price trends.
- FredPret 3y ago
  Not 100% sure what you mean or why you're so antagonistic. Who's the money printer in your comment? Why are my stock comparisons cherry-picked? The companies I listed make money from chips. Besides - any investor can compare any two companies for market cap, revenue, and profit, even if one makes chips and the other sells sugary drinks.
  - metaphor 3y ago
    My response was nothing more than a reflection of your remark echoed from a very different perspective. The money printer I'm alluding to is the US federal government. They own the proverbial money trees that $8.5B in grants will be plucked from. The US federal government is also the investor. They couldn't care less that the companies you're attempting to compare against "make money from chips". If the government wants money, they print it, end of story. Furthermore, these irrelevant companies aren't getting $8.5B big bucks for the simple reason that they don't have the independent capacity to make their own semiconductor products...they're fabless design houses, dependent on other companies' infrastructure and processes...more specifically, a certain most excellent company whose bleeding edge infrastructure and processes are physically located at the doorsteps of its greatest economic adversary. What the US federal government more immediately cares about are sufficiently advanced fab owner operators, more specifically, those rooted deeply in domestic soil...and who better to incentivize than a domestic former alpha dog who ate his own breakfast. Intel isn't leading at the margins anymore, but they're certainly not out of the game. If you're still not seeing the bigger picture, then I'd recommend reading this recently discussed[1] short story by Arthur C. Clarke to get a relevant feel for the underlying threat landscape. [1] https://news.ycombinator.com/item?id=39737084 https://news.ycombinator.com/item?id=39737084
jp42 3y ago
Intel can save a lot of money by getting rid of incompetent folks in higher management, closing a lot of projects/teams that do not add value, a lot of middle management, simplifying processes that slow down the teams that are actually doing job, changing culture where working 10hr/wk is not tolerated. They need to do some variation of what Elon did to twitter. I have seen many of these things first hand.
- FredPret 3y ago
  I agree - management cruft abounds in most large corps. The hard thing is you need a really skilled CEO to cut through all of it correctly.
- SnorkelTan 3y ago
  I don’t think twitter is a really good example considering its equity value has fallen precipitously under his reign.
  - jp42 3y ago
    I am not saying Intel needs to cut 80% like twitter, what I am trying to say that Intel can cut a lot without any impact.
- UncleOxidant 3y ago
  > closing a lot of projects/teams that do not add value I hear what you're saying, but that's also kind of how they got in trouble isn't it? They had an ARM license and a good implementation (at the time) StrongARM, but they shut that down just before smart phones hit. Intel is notorious for shutting down projects like that just before they could have been profitable so they can "focus on their core competencies". > They need to do some variation of what Elon did to twitter. Doing to Intel what Elon did to Twitter sounds like a disaster. Yes, Intel needs a shakeup, but don't completely destroy it. It's the largest chipmaker in the US and has actual fabs. I think Gelsinger is on the right track, but it's going to take time.
- jasonwatkinspdx 3y ago
  > They need to do some variation of what Elon did to twitter. What nonsense. Since Elon's purge Twitter has had and endless number of persistent issues that frankly are amature hour level bugs. He filtered developers by demanding they bring a printout of source code and explain it to him, when it's clear if you've ever seen him talk in detail about software he actually understands almost nothing about the process and details of writing code. This is both an ineffective and unfair way of deciding whether or not to fire someone. He also lost about half of Twitter's advertisers in a matter of weeks. I believe in fairness and honesty, so I will say Elon is exceptional at selling investors and customers on a technological vision. Saying his mindset and approach would have made Intel far more successful in recent decades is preposterous.
supportengineer 3y ago
>> dog's breakfast Native English speaker here, I've never heard this expression before?
- slavik81 3y ago
  It's an idiom meaning an unappealing mixture or a disorderly situation. https://en.wiktionary.org/wiki/dog%27s_breakfast https://en.wiktionary.org/wiki/dog%27s_breakfast
- agd 3y ago
  Not sure about elsewhere, but it’s a common expression in the UK.
- jasonwatkinspdx 3y ago
  A lot of places and definitely historically whatever scraps were left from dinner would be the dog's breakfast bowl tomorrow.
- tacocataco 3y ago
  Dogs get whatever is left over.
- switch007 3y ago
  I think dog’s dinner is way more common in the UK
dietmtnview 3y ago
It blows my mind how much these large firms have totally dropped the ball. It's like IBM levels of decline.
mlsu 3y ago
Only one of the companies you listed makes chips.
madaxe_again 3y ago
Why worry about revenue and profits or sustainability when the government will just bail you out? May as well just loot the coffers, pay seven figure bonuses, and then go back cap in hand to the taxpayer. And we call this “capitalism”.

hardware2win 3y ago

No shock that profits are failing when they are investing heavily

FredPret 3y ago
I'm not an accountant but they should be able to capitalize expenses incurred when it's an investment, ie, since it's not really a normal expense profit should not be affected. I'm not sure how that works with R&D engineering salaries - that might impact their profits even if it's an investment. I feel like a large technology company should spend a large but consistent amount of money on R&D - I don't like wild swings either way.
- maerF0x0 3y ago
  Also not an accountant, but i believe you two are talking differently about gaap and nongaap profit. The latter can immediately write of R&D, where as GAAP has rules around deprecation of investments.

pkulak 3y ago

Well, you can chase short term profit and send your designs off to TSMC, or you can own your own foundry. This is exactly why it's in the interest of the US government to ensure that Intel doesn't totally abandon US manufacturing just like AMD did years ago.

FredPret 3y ago
Not saying INTC isn't valuable - just saying they seem to have missed the boat in a big way and changes are in order. The US does of course need on-shore chip foundries for strategic reasons.
- rileyphone 3y ago
  Pat Gelsinger only returned 3 years ago, it just takes a while for changes to propagate through an org as large as Intel.
  - FredPret 3y ago
    I hope you turn out to be right.
  - markhahn 3y ago
    +1 this. Intel let MBA-think drive too many decisions (ie EUV). Maybe there was some misperception there, even cultural bias. Pat's biggest real change has been to push the company towards process leadership. They always had good designs, though perhaps also damaged by MBA-think there too. Still not sure about the decision to get out of non-volatile memory, though perhaps that was just a scope decision. Obviously, you could make a pretty amazing AI device with a whole bunch of NVM in-package...
- mywittyname 3y ago
  It was not obvious to Intel leadership that the future of manufacturing was to become a contracted fabricator of the design of other companies. Vertical integration and total control over both design and manufacture of chips was the obvious (and, until recently) successful path. What board would keep an Intel CEO that presented the idea of shifting the primary focus of the company to manufacturing the designs of other companies whose products are in direct competition to Intel? Intel is a perfect example of why companies need to regularly kill their old selves in order to survive. But it's also a perfect example of why so many companies fail to do so, since it often involves making what appears to be a terrible decision at the time, and convincing a bunch of people who know better to back you up. Very few leaders have the clout to pull this off. The success of TSCM was the result of an interesting confluence of events: including the existence of ARM; Apple deciding that they were going to design their own hardware and outsource its manufacture; Nvidia developing CUDA; and the machine learning/AI revolution that drove demand for Nvidia cards. If you take away any of those pieces, I think TSCM doesn't become the powerhouse it is today.

metaphor 3y ago

How do you come off with a straight face attempting to compare a bunch of fabless design houses with a company that actually owns the infrastructure and processes to make tangible products, even if not the prevailing sexiest thing? You're living in a bubble if you think the biggest money printer in the world actually cares about the historical performance of your cherry-picked stock comparisons.

ETHisso2017 3y ago
Then let's look at TSMC: https://valustox.com/TSM https://valustox.com/TSM
- metaphor 3y ago
  I've been looking for TSMC within the domestic borders of CONUS for longer than you might imagine. Reiterating, the money printer doesn't give a flying fuck about stock price trends.
FredPret 3y ago
Not 100% sure what you mean or why you're so antagonistic. Who's the money printer in your comment? Why are my stock comparisons cherry-picked? The companies I listed make money from chips. Besides - any investor can compare any two companies for market cap, revenue, and profit, even if one makes chips and the other sells sugary drinks.
- metaphor 3y ago
  My response was nothing more than a reflection of your remark echoed from a very different perspective. The money printer I'm alluding to is the US federal government. They own the proverbial money trees that $8.5B in grants will be plucked from. The US federal government is also the investor. They couldn't care less that the companies you're attempting to compare against "make money from chips". If the government wants money, they print it, end of story. Furthermore, these irrelevant companies aren't getting $8.5B big bucks for the simple reason that they don't have the independent capacity to make their own semiconductor products...they're fabless design houses, dependent on other companies' infrastructure and processes...more specifically, a certain most excellent company whose bleeding edge infrastructure and processes are physically located at the doorsteps of its greatest economic adversary. What the US federal government more immediately cares about are sufficiently advanced fab owner operators, more specifically, those rooted deeply in domestic soil...and who better to incentivize than a domestic former alpha dog who ate his own breakfast. Intel isn't leading at the margins anymore, but they're certainly not out of the game. If you're still not seeing the bigger picture, then I'd recommend reading this recently discussed[1] short story by Arthur C. Clarke to get a relevant feel for the underlying threat landscape. [1] https://news.ycombinator.com/item?id=39737084 https://news.ycombinator.com/item?id=39737084

jp42 3y ago

Intel can save a lot of money by getting rid of incompetent folks in higher management, closing a lot of projects/teams that do not add value, a lot of middle management, simplifying processes that slow down the teams that are actually doing job, changing culture where working 10hr/wk is not tolerated. They need to do some variation of what Elon did to twitter. I have seen many of these things first hand.

FredPret 3y ago
I agree - management cruft abounds in most large corps. The hard thing is you need a really skilled CEO to cut through all of it correctly.
SnorkelTan 3y ago
I don’t think twitter is a really good example considering its equity value has fallen precipitously under his reign.
- jp42 3y ago
  I am not saying Intel needs to cut 80% like twitter, what I am trying to say that Intel can cut a lot without any impact.
UncleOxidant 3y ago
> closing a lot of projects/teams that do not add value I hear what you're saying, but that's also kind of how they got in trouble isn't it? They had an ARM license and a good implementation (at the time) StrongARM, but they shut that down just before smart phones hit. Intel is notorious for shutting down projects like that just before they could have been profitable so they can "focus on their core competencies". > They need to do some variation of what Elon did to twitter. Doing to Intel what Elon did to Twitter sounds like a disaster. Yes, Intel needs a shakeup, but don't completely destroy it. It's the largest chipmaker in the US and has actual fabs. I think Gelsinger is on the right track, but it's going to take time.
jasonwatkinspdx 3y ago
> They need to do some variation of what Elon did to twitter. What nonsense. Since Elon's purge Twitter has had and endless number of persistent issues that frankly are amature hour level bugs. He filtered developers by demanding they bring a printout of source code and explain it to him, when it's clear if you've ever seen him talk in detail about software he actually understands almost nothing about the process and details of writing code. This is both an ineffective and unfair way of deciding whether or not to fire someone. He also lost about half of Twitter's advertisers in a matter of weeks. I believe in fairness and honesty, so I will say Elon is exceptional at selling investors and customers on a technological vision. Saying his mindset and approach would have made Intel far more successful in recent decades is preposterous.

supportengineer 3y ago

>> dog's breakfast Native English speaker here, I've never heard this expression before?

slavik81 3y ago
It's an idiom meaning an unappealing mixture or a disorderly situation. https://en.wiktionary.org/wiki/dog%27s_breakfast https://en.wiktionary.org/wiki/dog%27s_breakfast
agd 3y ago
Not sure about elsewhere, but it’s a common expression in the UK.
jasonwatkinspdx 3y ago
A lot of places and definitely historically whatever scraps were left from dinner would be the dog's breakfast bowl tomorrow.
tacocataco 3y ago
Dogs get whatever is left over.
switch007 3y ago
I think dog’s dinner is way more common in the UK

dietmtnview 3y ago

It blows my mind how much these large firms have totally dropped the ball. It's like IBM levels of decline.

mlsu 3y ago

Only one of the companies you listed makes chips.

madaxe_again 3y ago

Why worry about revenue and profits or sustainability when the government will just bail you out? May as well just loot the coffers, pay seven figure bonuses, and then go back cap in hand to the taxpayer. And we call this “capitalism”.