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A Message from Intel CEO Pat Gelsinger to Employees
- SlightlyLeftPad 2y agoNo mention at all of the millions of defective CPUs, only billions of dollars of cost cutting what could possibly go wrong?
- jordanb 2y agoSo their strategy is to cut their way to wall street liking them again. When that doesn't work, presumably, more cuts. When did our corporate leadership become so dumb and predictable?
- ls612 2y agoTheir strategy is to focus on 18A by H1 of next year, which will achieve parity with TSMC on process again. Then they figure the fab business will work itself out since everyone buying chips wants an alternative to TSMC that is competitive. Even if 18A slipped to H2 of next year that is when TSMC 2nm is expected to enter volume manufacturing so they would still achieve parity.
- jordanb 2y ago18A was already rolling down the tracks. Either it'll be great or it won't. But if it is, Intel needs to be poised and willing to make the investments to capitalize on it. Instead what we're getting with this message is "we want to save 10 billion and everything that isn't 18A go-to-production is on the chopping block". Maybe instead of cutting to hit arbitrary financial performance numbers that they set for themselves in the hopes of impressing investors, they could explain to the investors why 18A is such a game changer and how Intel will capitalize on it to regain their crown.
- JumpCrisscross 2y ago> they could explain to the investors why 18A is such a game changer and how Intel will capitalize on it to regain their crown I think that’s what they’re doing. They’re leaning up before approaching markets for a massive investment.
- BeetleB 2y ago> Instead what we're getting with this message is "we want to save 10 billion and everything that isn't 18A go-to-production is on the chopping block This comment (https://news.ycombinator.com/item?id=41588241 https://news.ycombinator.com/item?id=41588241) explains the financial predicament pretty well with regards to saving money. Intel is far more "wasteful" than their competitors, and they cannot survive that way. Intel fabs is set for a loss of $8B this year. I believe next year the forecasted loss is over $6B. They need to both get more customers to increase the revenue, and save money. The former alone will not get them to profitability. > Maybe instead of cutting to hit arbitrary financial performance numbers that they set for themselves in the hopes of impressing investors, they could explain to the investors why 18A is such a game changer and how Intel will capitalize on it to regain their crown. They do that every time they talk to the press. Wall Street understands it already. There's just skepticism that they will get as many customers as they need.
- jordanb 2y ago"Comparing to peers" is a favorite consultant-brained move.
- BeetleB 2y agoOk. Let me ask you this: You have a company that is less profitable than its competitors. It has worse products. It has a significantly higher number of employees. Would you bet on them if they insist on continuing to be wasteful? Even if they make a product that competes with NVIDIA once day, you know their gross margins are still going to be pathetic with that much fat. Why would you buy their shares? Why would you want to work for them knowing that by being so fat they have less money to pay you and their stock price won't accelerate much? This isn't a case of Intel not investing in technology. They're not scaling back on research. They're realizing that they were very inefficient for almost two decades because they could afford to be. They no longer can afford such waste.
- 0x000xca0xfe 2y agoIs it just me (non-US) that is grossed out by this dehumanizing talk which is somehow en vogue? Your "waste" is the salary of tens of thousands of smart engineers that put significant chunks of their lifetime into the company to enable their family (probably) a comfortable middle-class lifestyle. They made Intel no. 1 with outrageous profit margins that fueled many-billion stock buybacks. The company is troubled because their executives are legendary for their bad decisions. They missed out or gave up too early on almost all major opportunities: - Mobile computing - GPGPU (twice! Rumours are their GPU team was cut after the crypto craze) - Chiplets for economic manycore CPUs - AI (remember Optane? The nonsensical AVX-512 strategy?) - ARM - Efficiency (higher IPC + lower clocks) Seriously, how about fixing their awful strategic decision making instead of blaming employees? Do you think a company with out-of-touch leadership will somehow start winning with fewer employees?
- HDThoreaun 2y agoIntel is a dog. It needs to be burnt and rebuilt from the ashes at this point. Too much legacy bloat in the org. Would be nice if my local police force went through this sort of thing every once in a while.
- ip26 2y agoThey have 125,000 employees and 13B in revenue. TSMC, Nvidia, and AMD combined (fab, GPU, CPU) have around 88,000 employees on 710B in revenue. Intel may honestly have far more headcount than they need.
- trhway 2y ago>710B in revenue it seems you're a 0 off.
- sofixa 2y agoIntel also have or had a wide variety of side businesses - compute sticks and NUCs, NICs (WiFi, Ethernet, optics), datacenter SSDs, and probably other things I'm forgetting.
- MegaDeKay 2y agoThey sold the NUC business off to ASUS. But yeah, still lots of other stuff, like discrete graphics cards.
- whywhywhywhy 2y agoPutting it in perspective like that they should be cutting even more.
- BeetleB 2y agoThey probably will over the next few years. Not feasible to do it all at once (too chaotic).
- anothernewdude 2y agoAs an investor, if a company doesn't know what to do with their employees - it's a bad signal.
- reliabilityguy 2y agoThe Boeing way!
- dbg31415 2y agoWell, McDonnell Douglas actually… But those guys were so good they got Boeing to buy Boeing for them using Boeing’s own money.
- Karupan 2y ago> An engine of financial performance Cool, new strategy?! > Through our voluntary early retirement and separation offerings, we are more than halfway to our workforce reduction target of approximately 15,000 by the end of the year. We still have difficult decisions to make and will notify impacted employees in the middle of October. Oh right.
- dboreham 2y agoBeatings to continue..
- jordanb 2y agoSilly me I thought Intel was a chip company. Turns out it's an "engine of financial performance."
- blantonl 2y agoEvery company should strive to be an "engine of financial performance." What other expectations do you have of Intel? The amount of engine metaphors I could toss into this discussion are endless.
- danielmarkbruce 2y agoThere is a little bit of "when a measure becomes a target, it ceases to be a good measure" with respect to chasing financial performance. While you can't escape thinking about financial metrics, the goal should be something like creating great products, building a competitive barrier etc. Financials can act as a constraint rather than a goal. A concrete example is Costco. Even here, Gelsinger puts it last, which is sort of reads like a constraint. Seems fair.
- zeroCalories 2y agoThis is a long term problem. Intel, and other once great American companies, do not have the talent or culture needed to make great products anymore.
- htrp 2y ago> Additionally, we are implementing plans to reduce or exit about two-thirds of our real estate globally by the end of the year. But we'll still want everyone back in office in Q1 25
- geodel 2y agoWell, they are using Advanced Packaging
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- cameldrv 2y agoMan this is sad. My read is that they’re throwing in the towel and they’re going to milk their x86 duopoly and government subsidies through a steady, managed decline into irrelevance.
- starspangled 2y agoThrowing in the towel on what?
- ilyagr 2y agoI see "giving up" between the lines of: > A key priority for Intel Foundry is to increase our capital efficiency. <...> Now that we have completed our transition to EUV, it’s time to shift from a period of accelerated investment to a more normalized cadence of node development and a more flexible and efficient capital plan. That is, they no longer see a way and will no longer try to turn money into real innovation, at least as far as chip manufacturing is concerned.
- knowitnone 2y ago"no longer try to turn money into real innovation" because they can't. they've failed at every turn which is why they are in this predicament. They let a company with less resources, fewer engineers, no fab trounce them. It's like Intel hasn't done a thing for years and years when they were far ahead of the game. But CEO gets to walk away with MILLIONS while losing the company BILLIONS. If you ever wanted to look up the meaning of loser, look no further. And Pat is left to fix the mess. What's he got to work with? A bunch of losers.
- ClassyJacket 2y ago" They let a company with less resources, fewer engineers, no fab trounce them" Which company are you referring to?
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- decremental 2y ago[dead]
- nxobject 2y agoA few things that I noticed in passing: - Intel’s divesting from Altera; - Intel seems to be eschewing the consumer device/computer market for more B2B custom collaborations, e.g. with AWS and hinted later on. A lot of retrenchment from Intel. Once Foundry’s no longer embarrassing to Intel, though, what’s their plan for anticipating the future?
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- duskwuff 2y ago> - Intel’s divesting from Altera; That's been in the works since last year. https://www.eejournal.com/article/intel-plans-to-spin-off-fpga-group-as-an-independent-company-nine-years-after-buying-altera/ https://www.eejournal.com/article/intel-plans-to-spin-off-fp...
- ecshafer 2y agoAltera has been known but its so sad. They bought them less than a decade ago for $13B and did nothing with it. They really got themselves into a great position for Heterogeneous computing and then just did nothing.
- sterlind 2y agoIt's depressing. This should be an age of new hardware, with near-memory computing and flexible architecture. Instead it's GPUs for the foreseeable future, Nvidia has a near monopoly, AMD seems uninterested (despite also owning Xilinx), and Intel's throwing in the towel. I wanted to prototype a systolic array coupled with a DRAM slice to hold the weight matrix, but there's not even DRAM blocks distributed on any of the FPGAs I saw. I guess Xilinx has HBM but still not quite what I wanted.
- arder 2y agoHold up, they didn't do nothing. They tried and failed. There were several attempts at packaging an FPGA with a CPU and none of them worked.
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- ilyagr 2y agoI wonder: if my sentiment from https://news.ycombinator.com/item?id=41587866 https://news.ycombinator.com/item?id=41587866 is correct and Intel is essentially giving up on innovation in chip fabrication, what, if anything, does this mean for AMD? I'm quite ignorant on how AMD works, e.g. do they even have a chip fabrication plants? If they do, can they compete with Intel's for US govt grants, or has that ship sailed now that Intel got a grant? If not, is there room for meaningful innovation in x86 chip design? How about TSMC? Do they now have a monopoly on state-of-the-art chip fabrication?
- unsnap_biceps 2y ago> is there room for meaningful innovation in x86 chip design? I think there is plenty of room for meaningful innovation. x86 won't ever hold the crown for performance per watt, but could keep building on just raw total performance and extremely wide vectors. Why stop at AVX10? Let's move to supporting 1024/2048 bits or even, eventually, get to full page size vector instructions at 4096 bytes!
- alephnerd 2y ago> I wonder: if my sentiment from https://news.ycombinator.com/item?id=41587866 https://news.ycombinator.com/item?id=41587866 is correct and Intel is essentially giving up on innovation in chip fabrication Ignore HN. Almost every commenter on here is well outside of their depth. Intel's been putting a significant amount of money into adopting High NA EUV in 18A, which is bleeding edge enough for a decade. Furthermore, even though TSMC and Fabrication have become hot words on HN recently, it has been a financial dead end for almost 15 years now. This is why TSMC, UMC, and Samsung cornered the chip fabrication market - the margins are very very low and the upfront costs are very very high. There are 3 core processes to bringing a chip to market - Design: high margins, low capex, this is where American players like Nvidia, AMD, Intel, Qualcomm, etc really shine as well as their Israeli and Indian offices. This is also basically software at this point, as almost all design is done via EDA/ECAD - Fabrication: Fabricating the aforementioned designed chips. low margins, high capex, commodified due to Taiwanese and South Korean industrial policy along with recent advances in China for 28nm processes, recently prioritized in the US due to COVID era chip shocks - Packaging and Testing: packaging fabricated chips. low margins, high capex, commodified due to Malaysian, Thai, Chinese, South Korean, Japanese industrial policy, recently prioritized in the US due to COVID era chips shock. Before the mid-2010s, American companies like AMD, Intel, and IBM Microelectronics used to do all 3, but the low margins of Fabrication and Packaging caused players like IBM Microelectronics and AMD to almost go bankrupt, forcing both of them to divest their fabrication and packaging capacity to a spinoff called GlobalFoundaries. Intel kept their packaging and fabrication capacity, but it has a negative impact on Intel's R&D capacity in the 2010s. Now with CHIPS Act money, Intel is modernizing it's fabrication and packaging offerings, and splitting them off into "Intel Foundary Services" while keeping design under "Intel". There are a lot more intricacies as well (bleeding edge nodes vs lagging nodes, analog chips, memory chips, the entire EDA tooling chain, etc) with entirely distinct market dynamics that deserve a paper unto themselves, but that's a long story and I really really hate HN.
- arenaninja 2y agoThe death of tick tock :(
- MegaDeKay 2y agoNo mention of their discrete GPU line in this. I don't know if that is good news or bad for Battlemage and follow-on products.
- jauntywundrkind 2y agoI have a lot of hope for Intel getting back in the x86 ring with real contendors. Lunar Lake is looking incredible (the MSI Claw with it looks like a stunning system), Arrow Lake ought to be solid. I am a little curious to see where Intel goes with data-center chips. They have been expensive and hot, and the many-small-core offerings at least finds efficiency again. Otherwise it's less clear to me what coming up has promise, and gee, it sure seems like Nvidia and AMD both are super focused on that massive data center market. One thing that was super interesting in this message was what Amazon want's Intel's 18A for. It's not a CPU, they want it for AI fabric? Interesting seeing the switches be the highest demand. Switch chips are normally quite big, yes? Given how much likelier defects are as size increases, that's going to be a hard test - where-as AMD for example has lots of small CCD's it can stack on a interposer. But also Intel has some fantastic advanced packaging that maybe makes them an ideal partner here - maybe EIMB bridges to PHY or on-package optics stuff, what's grown up from integrated Omni-Path (although not Omni-Path itself, that got sold off already). https://www.intel.com/content/www/us/en/newsroom/news/intel-unveils-first-integrated-optical-io-chiplet.html https://www.intel.com/content/www/us/en/newsroom/news/intel-...
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- ChrisArchitect 2y ago[dupe] Discussion: https://news.ycombinator.com/item?id=41562481 https://news.ycombinator.com/item?id=41562481
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- light_hue_1 2y ago> Our AI investments—including continued leadership of the AI PC category, our strong position with AI in data center I had a lot of hope that Pat Gelsinger being an engineer would lead Intel to a revival. But this is total delusion. Intel isn't even a remote player in AI. If they can't admit the dire situation that Intel is in, having missed the AI boat almost entirely and even managed to fall behind Apple somehow, they aren't going to find a way back. They have nothing to offer over Nvidia for AI. They have nothing to offer over TSMC when it comes to their fab aside from being a US based alternative (and taking billions from taxpayers). x86 has nothing new to offer; their insane moves with AVX have fragmented the platform terribly. It's not even easy to ship high performance x86 code these days. Looks like all this is, is an announcement that they're going to fire a lot of people soon to make their financials look good while the ship continues to sink.
- Bluebirt 2y agoOkay, this means reducing Innovation to a bare minimum I guess. It is baffling to me, how this giant company manages to suck at everything they touch. They managed to be unrelevant in every trend over the past decade.
- hackernoops 2y agoDEI
- scovetta 2y agoI don't understand why executives don't seem to understand the basics of effective communication. It's not like they don't have access to staff and expertise here. When you have difficult news to share, get it out first. Be direct and authentic. Say you're sorry, that you messed up (hint: if you are the CEO, every success is partially yours and every failure is partially yours).
- BeetleB 2y agoAre you referring to the layoffs? This is a followup communication - so no need to lead with it. Everyone knows about it already.
- pharos92 2y agoIt's cringe when a bean-counter attempts to be an engineer, but it's pathetic when an engineer attempts to be a bean counter.
- arder 2y agoIt's really sad to see how far Intel has sunk, back in the good old days they'd lay off 10,000 at the drop of a hat. These days they're so rubbish it's taking them months to deliver those juicy juicy firings. Nice to see they're still doing well with their arbitrary movement of thousands of employees between TLAs though. Man that CCG is looking juicy right now.
- limpbizkitfan 2y agoRefocus on x86? Why would they double down on the archaic stuff? Intel has all the opportunity to innovate and they choose not to.