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Their 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 o

by ls612 2y ago

Their 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 ago
18A 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 ago
      Ok. 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 ago
        Is 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?
        BeetleB 2y ago
        > 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. Likely, many/most of those engineers didn't play much of a role in Intel's success. Trust me, I know many current and former employees there. While they certainly have good SW people, they also have absolute trash (e.g. cannot write a function to compute a factorial, cannot handle branches in version control, cannot do anything on the command line - including a basic understanding of directories and how to navigate them). As I said, when a company is very profitable, it's easy to hire subpar engineers. And they did. When I say Intel is fat, I'm not exaggerating. They have a lot of poorly capable engineers who are not contributing much. That's one category. Then another category is hiring a lot of capable engineers for a zillion side projects - none of which are profitable. Ideally you'd move them to existing products that will be profitable, but there's no need for them - those products are already well staffed. What do you want Intel to do? Keep paying them for useless work (which is what they've been doing all along)? You're not wrong about the stock buybacks and the bad executives. But you're not proposing a solution either. They've raised compensation. They've stopped buybacks. They've cut and then eliminated the dividend. The reality is the company is bleeding money, and competitors are squeezing them. If they don't lay them off, they face extinction. Even the 15,000 number is low. Expect more layoffs in future years. Unless they can come up with another cash cow that their competitors cannot, they are not a viable company at this size. The only reason they were so wasteful in the past was their lead in Moore's Law. Now that Moore's Law is mostly dead, other companies have caught up (and temporarily surpassed them). Unless a revolutionary breakthrough occurs in semiconductor fabrication, which only Intel can capitalize on, the good (wasteful) days are gone forever. AMD had to go through this a long time ago. > - Mobile computing > ... > - Efficiency (higher IPC + lower clocks) I think you're not realizing the reality of the situation. With the exception of GPUs and the AI craze, for everything else you list: Even if they had become number 1 in those categories they would still be poorly profitable and fat. Just look at the competitors in those spaces - none are as inefficient or overstaffed as Intel. Even Nvidia, with their insane profits, remains relatively lean. All the things you mention aren't why Intel is suffering so much. It's due to the fundamental economics of running a fab, along with the stalling of Moore's Law. (And BTW, the sales and marketing team got cut 35% - and I bet if they reveal the numbers, you'll find that the cuts from the fab will be less than the 15% target. So it's not just engineers).

by ls612 2y ago

jordanb 2y ago

18A 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 ago
    Ok. 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 ago
      Is 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?
      - BeetleB 2y ago
        > 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. Likely, many/most of those engineers didn't play much of a role in Intel's success. Trust me, I know many current and former employees there. While they certainly have good SW people, they also have absolute trash (e.g. cannot write a function to compute a factorial, cannot handle branches in version control, cannot do anything on the command line - including a basic understanding of directories and how to navigate them). As I said, when a company is very profitable, it's easy to hire subpar engineers. And they did. When I say Intel is fat, I'm not exaggerating. They have a lot of poorly capable engineers who are not contributing much. That's one category. Then another category is hiring a lot of capable engineers for a zillion side projects - none of which are profitable. Ideally you'd move them to existing products that will be profitable, but there's no need for them - those products are already well staffed. What do you want Intel to do? Keep paying them for useless work (which is what they've been doing all along)? You're not wrong about the stock buybacks and the bad executives. But you're not proposing a solution either. They've raised compensation. They've stopped buybacks. They've cut and then eliminated the dividend. The reality is the company is bleeding money, and competitors are squeezing them. If they don't lay them off, they face extinction. Even the 15,000 number is low. Expect more layoffs in future years. Unless they can come up with another cash cow that their competitors cannot, they are not a viable company at this size. The only reason they were so wasteful in the past was their lead in Moore's Law. Now that Moore's Law is mostly dead, other companies have caught up (and temporarily surpassed them). Unless a revolutionary breakthrough occurs in semiconductor fabrication, which only Intel can capitalize on, the good (wasteful) days are gone forever. AMD had to go through this a long time ago. > - Mobile computing > ... > - Efficiency (higher IPC + lower clocks) I think you're not realizing the reality of the situation. With the exception of GPUs and the AI craze, for everything else you list: Even if they had become number 1 in those categories they would still be poorly profitable and fat. Just look at the competitors in those spaces - none are as inefficient or overstaffed as Intel. Even Nvidia, with their insane profits, remains relatively lean. All the things you mention aren't why Intel is suffering so much. It's due to the fundamental economics of running a fab, along with the stalling of Moore's Law. (And BTW, the sales and marketing team got cut 35% - and I bet if they reveal the numbers, you'll find that the cuts from the fab will be less than the 15% target. So it's not just engineers).