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Intel needed to be split in two as well, which Gelsinger only half-heartedly did. He split the company into two functions - foundry and design, but didn't take

by rwmj 2y ago

Intel needed to be split in two as well, which Gelsinger only half-heartedly did. He split the company into two functions - foundry and design, but didn't take that to its logical conclusion and split up the company completely.

BirAdam 2y ago
They legally cannot split due to the CHIPS Act.
- rwmj 2y ago
  No idea if that's true or not, but the CHIPS Act didn't exist when he started as CEO.
- ethbr1 2y ago
  Not entirely true. It just requires that Intel retain a 51% stake in any split foundry company.
  - CoastalCoder 2y ago
    I wonder about the details of this. For example, could "Intel A" continue to own the foundries, split off "Intel B" as the owner of the product lines, and then do some rebranding shenanigans so that the CPUs are still branded as "Intel"?
    - __d 2y ago
      eg. HP and HPE. I don’t know if it’s legally possible, but HP shows the branding bit can kinda work.
paulpan 2y ago
Agree with OP that Intel was probably too deep into its downward spiral. While it seems Pat tried to make changes, including expanding into GPUs, it either wasn't enough or too much for the Intel board. Splitting Intel is necessary but probably infeasible at this point in the game. Simple fact is that Intel Foundry Services has nothing to offer against the likes of TSMC and Samsung - perhaps only cheaper prices and even then it's unproven to fab any non-Intel chips. So the only way to keep it afloat is by continuing to fab Intel's own designs, until 18A node becomes viable/ready.
- mnau 2y ago
  He failed on GPU. The product was substandard. That means either he knew and allowed it to happen, which is bad, or he didn't know and allowed GPU division to squander the resources, which is even worse. Either way, it was an adventure Intel couldn't afford. There is a similar story in other areas.
  - dralley 2y ago
    It's worth mentioning that IIRC the team responsible for the Arc GPU drivers was located in Russia, and after the invasion of Ukraine they had to deal with relocating the entire team to the EU and lost several engineers in the process. The drivers were the primary reason for the absolute failure of Arc. Intel deserves a lot of blame but they also got hit by some really shit circumstances outside of their control.
    - mnau 2y ago
      He was CEO. Chief executing officer. It's literally his job to execute, i.e. fix that stuff/ensure it doesn't happen. Get them out of Russia, poach new devs, have a backup team, delay the product (i.e. no HVM until good drivers are in sight). That's literally his job. This only reinforces my previous point. He had good ideas, but couldn't execute.
      - rvba 2y ago
        Executive, not executing. On a side note getting people in russia write your drivers sounds a bit insane. Yea lower cost and probably ok quality, but the risks...
      - jpadkins 2y ago
        CEO stands for Chief Executive Officer. a chief executive officer, the highest-ranking person in a company or other institution, ultimately responsible for making managerial decisions. Maybe you mean COO?
    - Wytwwww 2y ago
Wytwwww 2y ago
> Intel needed to be split in two as well Wouldn't that just pretty much guarantee that the foundry business would fail since Intel wouldn't have any incentives to shift most of their manufacturing to TSMC? The same thing happened with AMD/Global Foundries..
- mastax 2y ago
  AMD has a big wafer supply agreement with GlobalFoundries, and has since the spinoff. It was exclusive until the seventh WSA in 2019 which allowed AMD to purchase 7nm and beyond from other suppliers (without paying penalties) which was the only reasonable resolution after GloFo cancelled their 7nm fab (which may have been the best thing to happen to AMD). But AMD increased their GloFo orders in May and December 2021 during the chip crunch to $2.1B total through 2025. If you look at the first WSA amendment from March 2011 it includes AMD agreeing to pay an additional $430M if they get some (redacted) node in production in time. Anyway, whatever woes GloFo is facing you can’t blame them on AMD. They had an exclusivity deal for a decade which only got broken when it was no longer tenable and AMD still buys a ton of their wafers. I suppose AMD may have bought more wafers if their products didn’t suck for most of that time but it had nothing to do with shifting production to TSMC which only happened after GloFo gave up.
  - jpalawaga 2y ago
    right. so glofo couldn't keep up abandoned the bleeding edge. what's the evidence that intel foundaries, divorced from design, wouldn't suffer the same fate?
    - pclmulqdq 2y ago
      With the design side, Intel foundries have struggled to keep up with TSMC. It's not clear that the design side helps. My guess is that it's actually a question of corporate culture, and that AMD's ambitious, driven people stuck with AMD.
    - manquer 2y ago
      No evidence, intel doesn't have the resources to be fighting tsmc, and, arm and nvidia, apple and samsung in different technologies at the same time.( foundry, gpus, cpus, NAND ,SSD etc) They already sold the NAND memory business to SK hynix in 2021. They will have to focus, that means getting out lines of business which may likely die. That would be better than going bankrupt and your competitors picking the pieces

by rwmj 2y ago

BirAdam 2y ago

They legally cannot split due to the CHIPS Act.

rwmj 2y ago
No idea if that's true or not, but the CHIPS Act didn't exist when he started as CEO.
ethbr1 2y ago
Not entirely true. It just requires that Intel retain a 51% stake in any split foundry company.
- CoastalCoder 2y ago
  I wonder about the details of this. For example, could "Intel A" continue to own the foundries, split off "Intel B" as the owner of the product lines, and then do some rebranding shenanigans so that the CPUs are still branded as "Intel"?
  - __d 2y ago
    eg. HP and HPE. I don’t know if it’s legally possible, but HP shows the branding bit can kinda work.

paulpan 2y ago

Agree with OP that Intel was probably too deep into its downward spiral. While it seems Pat tried to make changes, including expanding into GPUs, it either wasn't enough or too much for the Intel board. Splitting Intel is necessary but probably infeasible at this point in the game. Simple fact is that Intel Foundry Services has nothing to offer against the likes of TSMC and Samsung - perhaps only cheaper prices and even then it's unproven to fab any non-Intel chips. So the only way to keep it afloat is by continuing to fab Intel's own designs, until 18A node becomes viable/ready.

mnau 2y ago
He failed on GPU. The product was substandard. That means either he knew and allowed it to happen, which is bad, or he didn't know and allowed GPU division to squander the resources, which is even worse. Either way, it was an adventure Intel couldn't afford. There is a similar story in other areas.
- dralley 2y ago
  It's worth mentioning that IIRC the team responsible for the Arc GPU drivers was located in Russia, and after the invasion of Ukraine they had to deal with relocating the entire team to the EU and lost several engineers in the process. The drivers were the primary reason for the absolute failure of Arc. Intel deserves a lot of blame but they also got hit by some really shit circumstances outside of their control.
  - mnau 2y ago
    He was CEO. Chief executing officer. It's literally his job to execute, i.e. fix that stuff/ensure it doesn't happen. Get them out of Russia, poach new devs, have a backup team, delay the product (i.e. no HVM until good drivers are in sight). That's literally his job. This only reinforces my previous point. He had good ideas, but couldn't execute.
    - rvba 2y ago
      Executive, not executing. On a side note getting people in russia write your drivers sounds a bit insane. Yea lower cost and probably ok quality, but the risks...
    - jpadkins 2y ago
      CEO stands for Chief Executive Officer. a chief executive officer, the highest-ranking person in a company or other institution, ultimately responsible for making managerial decisions. Maybe you mean COO?
  - Wytwwww 2y ago

Wytwwww 2y ago

> Intel needed to be split in two as well Wouldn't that just pretty much guarantee that the foundry business would fail since Intel wouldn't have any incentives to shift most of their manufacturing to TSMC? The same thing happened with AMD/Global Foundries..

mastax 2y ago
AMD has a big wafer supply agreement with GlobalFoundries, and has since the spinoff. It was exclusive until the seventh WSA in 2019 which allowed AMD to purchase 7nm and beyond from other suppliers (without paying penalties) which was the only reasonable resolution after GloFo cancelled their 7nm fab (which may have been the best thing to happen to AMD). But AMD increased their GloFo orders in May and December 2021 during the chip crunch to $2.1B total through 2025. If you look at the first WSA amendment from March 2011 it includes AMD agreeing to pay an additional $430M if they get some (redacted) node in production in time. Anyway, whatever woes GloFo is facing you can’t blame them on AMD. They had an exclusivity deal for a decade which only got broken when it was no longer tenable and AMD still buys a ton of their wafers. I suppose AMD may have bought more wafers if their products didn’t suck for most of that time but it had nothing to do with shifting production to TSMC which only happened after GloFo gave up.
- jpalawaga 2y ago
  right. so glofo couldn't keep up abandoned the bleeding edge. what's the evidence that intel foundaries, divorced from design, wouldn't suffer the same fate?
  - pclmulqdq 2y ago
    With the design side, Intel foundries have struggled to keep up with TSMC. It's not clear that the design side helps. My guess is that it's actually a question of corporate culture, and that AMD's ambitious, driven people stuck with AMD.
  - manquer 2y ago
    No evidence, intel doesn't have the resources to be fighting tsmc, and, arm and nvidia, apple and samsung in different technologies at the same time.( foundry, gpus, cpus, NAND ,SSD etc) They already sold the NAND memory business to SK hynix in 2021. They will have to focus, that means getting out lines of business which may likely die. That would be better than going bankrupt and your competitors picking the pieces