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Intel left the military business in 1997 because making chips for the military is kind of awful. The volume is small and if a military plane gets canceled, the
by kens 2y ago
Intel left the military business in 1997 because making chips for the military is kind of awful. The volume is small and if a military plane gets canceled, the volume can suddenly become zero. (See the F-22 and Comanche.) Moreover, the military wants parts for decades, so you're stuck building obsolete parts on an obsolete process.
link: https://www.militaryaerospace.com/computers/article/16710194/intel-set-to-quit-military-business https://www.militaryaerospace.com/computers/article/16710194...
- timnetworks 2y agoBetween ASIC and FPGA it's cheap enough to do for any (large competent) company, but choosing an enterprise is a guarantee they'll be around to ship too. Or a separate fab can be set up (or purchased from another company) to run batches of "obsolete" chips that then can be resold for washing machines and ink printer carts etc.
- elihu 2y agoThe article makes it sound like a sort of special deal, but Intel does run a foundry service now, so in theory that means that they aren't picking and choosing who their customers are -- anyone with money can buy manufacturing capacity. It wasn't clear from what was said before the paywall whether Intel would be manufacturing products designed by the government or another third party, or if these are going to be Intel-designed products. (It's not all too out-of-the-ordinary for Intel or any other chip designer to make a variant of a product with certain application-specific tweaks for certain customers.) If Intel is designing the product, then that's a lot more than ordinary foundry services.
- kukkamario 2y ago> The volume is small That is changing with the drone warfare becoming large part of the future wars. US military (and pretty much everyone else) will make drones major focus of advancement and there is definitely lot of money to be made by supplying chips for those.
- heyflyguy 2y agoI can't read the article, and so it probably mentions this but I think this is a big case of "the past was prologue". DOD is making a big bet that anything chip and silicon is going to be really hard to acquire past 2027. This may be a great big gravy train for Intel.
- tw04 2y ago>so you're stuck building obsolete parts on an obsolete process. "Stuck"? Generally speaking, they can charge an arm and a leg for those older parts due to small volume. When I previously worked at a company that supplied hardware for a military application, they were still buying decades old hardware at about a 10x markup from when it was still in production for the general commercial market. Heck, in 2019 Global Foundries sold a 20 year old fab that IBM built in Fishkill to ON Semiconductor for $430m. IBM originally built it for ~$2.5B. You don't think they got their money's worth and then some? ON didn't buy it as an act of charity, they've clearly got a plan to continue printing money building chips out of that fab. https://en.wikipedia.org/wiki/GlobalFoundries https://en.wikipedia.org/wiki/GlobalFoundries https://www.semiconductor-technology.com/projects/ibm_fishkill/ https://www.semiconductor-technology.com/projects/ibm_fishki...
- sambull 2y agosounds right up intels ally.
- snicker7 2y ago“Stuck making obsolete parts” sounds great. Guaranteed revenue without needing to stay competitive.
- booi 2y agocan't they just create enough for decades and stock pile it somewhere?
- deleted 2y ago[deleted]
- opticfluorine 2y agoWhen I used to work in defense contracting, this is precisely what we (the contractor) did. We would buy up all available stock of any difficult-to-replace parts (often specific SBCs) when the manufacturer announced end of life.
- ggm 2y agoThere's a market in conforming interface and ABI spec meeting hardware to emulate the boot and upgrade devices for German tanks, or some other hardware. Sd card or USB behind, giant milspec plug to the fore.
- eastbound 2y agoDoesn’t it rot?
- Qwertious 2y agoGiven that it's definitionally military-grade hardware, and very high value-density and therefore easy to store very securely, I doubt it.
- roflchoppa 2y agoBen Rich talks about this being a rough spot for dealing with military contracts in the epilogue of his book, Skunk Works. I think it depends on the contract, for plane parts they did not allow for storage of parts :(
- bee_rider 2y agoI guess they want the capacity to make planes indefinitely, if a really big war happens?
- manquer 2y agoIt is not the first choice of revenue of course, they and everyone would like to be Nvidia and pick and choose the customers standing patiently in line outside the door. However in tough times, having the culture to change and deal with customers or use cases you wouldn't prefer to survive is a good sign. AMD during the bulldozer era, had many deals they didn't like or barely made money just to survive, it paid off with Ryzen, it can happen to Intel as well. Good to see Intel branching out and trying new things to turn the ship around.
- pmkary 2y agoWise
- vagrantJin 2y agoI did not know intel was so short of cash it needs military money to stay afloat.
- timnetworks 2y agolosing Apple's desktop and laptop business ended up being quite a loss for them
- resters 2y agoIntel could't have done it profitably and chose to lose the business. Intel has been a cash cow business for a while, coasting on its early wins and doomed to be gradually surpassed. For shareholders seeking short and medium term value, this works out quite well.
- fasa99 2y agoIt's not about the small time military money it's about the big ticket government bailout. If they have some hooks into the military then they have, what's the term, a "moral hazard" card to freely take risk, military dependency puts them at the top of the bailout list (which they kinda were already, now even moreso)
- 2y ago
- 7speter 2y agoThe military is probably using a lot more tech now than they did in 1997?
- wmf 2y agoProcurement is probably just as screwed up though.
- jerlam 2y agoChips are used in a lot more than expensive, low-quantity planes. Increasingly, every "round of ammo" has a chip in it. Every missile, bomb, single-use drone, and artillery shell has sensors and guidance. These are expended in use. Instead of maintaining these "rounds", the military simply asks for a new, improved, and more expensive version of them, and destroys / gives away the old versions. It's not just one country buying these, it's the entirety of NATO.
- RobRivera 2y agoWhat Are You Talking about. Ordnance gets expended, goes boom.
- xyst 2y ago> Moreover, the military wants parts for decades nothing wrong with this. Government pays for the product. The product should be serviceable whether the company becomes defunct or business shifts. At this point, military or consumer should be able to give blueprints of the parts to different manufacturer or manufacturer it themselves.
- sitkack 2y agoWafers come in batch sizes of a FOUP, these are the little sealed boxes you see the robots on the tracks moving around a semiconductor factory. One might only need one wafer of chips or less for a project, those other unused wafers go in storage after some testing. When the military needs spare parts, those wafers can be brought out of storage and diced and packaged (if we will even still do that in the future). This technique is already done for things with long operational lifetimes. It would be nice if we made a distributed (geographically) wafer bank so that we will have a long supply of semiconductors, esp after a civilization scale catastrophe. https://en.wikipedia.org/wiki/FOUP https://en.wikipedia.org/wiki/FOUP
- kennyloginz 2y agoThe analogy of a wafer bank to a seed bank is new to me. I would imagine the wafer bank is a bad idea, because they would just be playbooks that would lead to the collapse. So kinda pointless.
- realityking 2y agoInteresting. But why store the somewhat unwieldy wafer instead the packaged chip? I’d imagine that doesn’t add much cost but makes storage significantly simpler.
- adrian_b 2y agoStoring the wafers avoids paying the costs for packaging and testing in the case the chips will not be needed. Moreover, the packaged chips typically require a much larger volume for their storage than the wafers. A wafer may contain many thousands of chips. The wafers are normally stored in dry nitrogen, to avoid their chemical degradation during long term storage.
- throwaway48476 2y agoModern military uses more cots and less bespoke designs because developing cutting edge custom asics is so horrifically expensive.
- colechristensen 2y agoBut also custom ASICS are no longer necessary because things are so fast and military acquisitions are much slower than commercial development: the state of the art commercial tech state of the art will go through several iterations before a single military product is released so why chase the bleeding edge? Unless they have really classified tech like a productively useful quantum computer or something, it’s just a better idea all around to use off the shelf or very slightly modified off the shelf parts. (Feature flags, extra testing, expanded environmental margins, etc, but not total redesigns)
- makeitdouble 2y agoThat's an horrible business if you plan on being nimble and competitive and blow away customers with your innovations. My read is Intel isn't going for that trajectory anymore and stabilized for markets where politics can play a larger role.
- PeterHolzwarth 2y ago"a"
- surfingdino 2y agoIntel hasn't been nimble for a while. It's a huge organisation. Makes sense to attach themselves to the military, both sides need a stable, reliable partner for a long-term relationship.
- threatripper 2y ago> Moreover, the military wants parts for decades, so you're stuck building obsolete parts on an obsolete process. Intel recently built expertise in this area, so I think they are a good match.
- vjk800 2y ago> so you're stuck building obsolete parts on an obsolete process. Isn't this what every corporate wants? Steady supply of income with no R&D, marketing, etc.
- osnium123 2y agoIf you are a company facing bankruptcy because your process technology is not competitive with world leaders like TSMC and Samsung, you resort to military work. Intel is like the Boeing of the semiconductor industry except it might be less crucial to the industry.
- khuey 2y agoKeeping the obsolete process alive can be very expensive.
- stoperaticless 2y agoCould you elaborte? Maybe with illustrative example? (Intuitively it would just seem like a good thing)
- WJW 2y agoKeeping a factory alive is not free. If you have committed to delivering a certain product for the next 30-50 years, you need to be able to deliver that product even in year 49. Even if it's only three parts and the factory is only profitable when producing thousands a year. Some costs that will crop up even without investing in R&D and maintenance: - Factory maintenance. The lights need to stay on, the floors need to be swept and the bearings need to remain greased. Things like ISO and security certifications also need to be kept up to date. - The longer a product runs, the more likely it is that the original employees on the production line retire or leave for another job. This means you'll need to be able to find and train new people for a job that uses tools and methodologies no longer used anywhere else. It will probably be more expensive to hire for those jobs than for jobs where people learn transferable skills that they could use in the rest of their careers. - After 40 years, many of the components in the production machinery will be difficult to come by. A CNC machine from that time might use the (then brand new) 286 processor. If it breaks, where would you source extra 286 processors? Alternatively you can redesign the process to use up-to-date components, but that costs a lot of extra money. - Usually the demand for components drops off over time as the world moves on to something more modern. For example, demand for components of older fighter jets will slowly drop off as new airframes are no longer being built and the existing ones slowly get taken out of service. This means you'll need to spread the fixed costs of the above points over fewer and fewer components over time. - Finally, the need for R&D and marketing doesn't actually go away. If you only focus on producing (say) targeting processors for the F16, your company will go out of business at the latest when the last F16 leaves service. Your shareholders will probably not be happy about that, so it's still important to invest in gaining new contracts too.
- niffydroid 2y agoWhat normally happens is they will store a bunch of chips for the future and then shut the line down, when they need more they'd have to use a newer chip in it's place.
- branko_d 2y ago> you're stuck building obsolete parts on an obsolete process. TSMC's oldest plant still in operation (Fab 2) started production in 1990. So far, the only fab they have closed is Fab 1. Reference: https://en.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants https://en.wikipedia.org/wiki/List_of_semiconductor_fabricat... Admittedly, leading-edge process is where all the excitement it, but the old fabs are fully depreciated and can remain profitable for decades.
- bgnn 2y agowell, true, but this doesn't guarantee a node to stay in production. fabs sometimes shut down a node to use the equipment and space for another node with more demand. also, sone of these machines from 80s and 90s are simply old and it's not financially viable to buy a new machine for such a process. they typically cannibalize some of the machines for parts, or even buy old machines for parts from other fabs closing down. I believe a fan requies refreshing and investment every 15-20 years.
- chx 2y agoAs another example, NAND is manufactured on 40nm and for the foreseeable future it'll be. https://thememoryguy.com/why-3d-nand-is-stuck-at-40nm/ https://thememoryguy.com/why-3d-nand-is-stuck-at-40nm/
- le-mark 2y agoI’d love to be able to fab my own designs, 40nm would be awesome. Yes there are projects where you can. But they allow small area/transistor counts. Pcbway for chips would be amazing!
- bgnn 2y agowon't happen for such a complicated process like 40nm. The design tooling itself would cost 100s of k$.
- moffkalast 2y agoHonestly I love that old processes are still running and old parts are still being made. Modern SMD stuff is really rubbish for learning electronics. It's nigh impossible to hand solder because all of it is tiny af, and since it's newer it's expensive and you don't get as many attempts. Luckily there's still an immense supply of arguably completely obsolete thruhole parts that are super easy to work with, can be breadboarded and bought for basically nothing.