3 ms·
I was listening to a discussion about this today, latest Accidental Tech Podcast. The biggest problem Intel has at the moment seems to be they can’t split up a
by MBCook 2y ago
I was listening to a discussion about this today, latest Accidental Tech Podcast.
The biggest problem Intel has at the moment seems to be they can’t split up and they can’t work together.
If you keep both the fab and the design, you have problems. The thing that makes Intel all the money is their CPUs, and because of the state of the fab many of them are made at TSMC.
But TSMC isn’t too keen on giving a good deal to someone who wants usurp them. So Intel is paying more per chip than they would if they just spun off the fab. If they did that, they could have higher margins/lower prices.
But if you spin off the fab, can they actually get enough business to be able to survive? They’re not on the leading process. They need a massive investment to catch up. Despite their geopolitical importance it seems like they would basically need a real continuing subsidy just to exist, which is effectively being provided by the CPU design side of the business right now right?
It’s a real damned if you do damned if you don’t kind of thing.
I don’t know what the right thing to do is. Splitting them up kind of seems like the better idea but I don’t know if Intel’s ego could take that. They were the fab company. Their advantage let them survive multiple large mistakes that could’ve killed other companies.
Now they’ve all piled up.
PS: the CHIPS act money says it goes to Intel. It sounds like if they try to split they may lose it, so would first have to convince the government to let the fab part keep it
- brookst 2y agoI much agree with your assessment of the challenge, but I think Intel’s only chance is to capitalize on vertical integration of chip, design, fab. TSMC works closely with big customer (cough Apple), but there are still boundaries there. Intel needs to step back, enjoy the runway the CHIPs act got them, and really think hard about the top to bottom design and fab of an absolutely killer 2027 / 2028 chip would look like. They aren’t as good at design as Apple, and they aren’t as good at fab as TSMC, but they are within striking distance of both and they have that vertical integration opportunity.
- MBCook 2y agoWouldn’t that basically require becoming better at fabing than TSMC again? If they can catch up, but not exceeded, then they can’t make a better product than they do right now. I guess it should cut their costs some amount (don’t know how much) which would certainly be a big plus. But without taking the lead again… would that be enough? I suppose if they caught up they could also fab other people‘s chips as Pat wanted to. If they’re tied for best (or at least close) they could probably pick up accounts that TSMC doesn’t have space for or are perhaps too small to help fill out their capacity. While I was listening to the podcast I was thinking about how it almost seems like sort of a historical accident that they’re both design and fabrication. Does anyone else do that at this point? I know it was common early on but maybe it’s just not that sustainable by now. I don’t know. I guess I see splitting the company is more likely to succeed, simply because the design side works and would lose the anchor that it’s tied to. Successfully pulling off a fix while keeping the company intact may be a better outcome if possible though.
- brookst 2y agoI honestly don’t know. But I don’t think they have to be better than TSMC, or even quite as good. Intel’s strength is the design + fab integration. If they are 90% as good as fab as TSMC and 95% as good as Apple or Nvidia at design… maybe that’s sufficient to be competitive.
- philistine 2y agoDo you honestly believe that Intel can outperform every single company making chips? They're the last vertical chip maker. Samsung is still trying, but they're not beating the one-two punch of Apple design, TSMC production that's for sure.