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Reasonable takes. I think the employee count blowup was his biggest mistake because it shortened Intel's runway towards being an external fab company. Lip Bu

Reasonable takes. I think the employee count blowup was his biggest mistake because it shortened Intel's runway towards being an external fab company. Lip Bu Tan, who was on the Intel board, recently resigned because he did not agree with Pat's employee count plan and company culture. Tan was likely right. Specifically, they want to see how well Intel's own product on 18A performs before committing. So the real test is in 2025-2026. Another mistake of Pat's is that he did not split the company fully. AMD, Nvidia, Apple, Qualcomm aren't voluntarily going to fund a competitor by using Intel fabs. Furthermore, Intel not splitting means there will always be small conflicts of interests with Intel designs teams. Pat wanted the cake and eat it too. He wanted to compete with TSMC in addition to Nvidia, Apple, AMD, Qualcomm. Now Intel is at risk with competing against neither group. I think not having any major external customer signed onto 18A in 2024, approaching 2025, is a huge failure on Pat's part.

BeetleB 2y ago
> I think the employee count blowup was his biggest mistake because it shortened Intel's runway towards being an external fab company. It was a mistake, but in terms of runway, would not have made a large difference. The capital costs of running a fab dwarf the cost to pay salaries. That's why they still do fabs in the US - outsourcing to another country doesn't save much money. > Another mistake of Pat's is that he did not split the company fully. I don't know that anyone knows what his plans were on this. Internally within the company (and perhaps externally), he was clear on a few things: - If Foundry cannot become profitable, he'll shut the fabs down and kill Foundry altogether. - The Products side will be charged market rates, and they can choose if they want to use Intel's fabs or TSMC - If an external company is willing to pay more than Intel Products, they'll prioritize the external company. So he was trying to set it up so that it was effectively two separate companies. I guess it was either harder than expected, or there was significant pushback. When he joined, the two sides were heavily intertwined. His goal for 2023 was to get things separated enough so we could get separate P&L statements for Foundry and Products. He achieved it - but I don't know if it could have been done quicker. The other (obvious) reason he didn't want to break the company up: Intel Foundry is unprofitable. They need the revenue that the Products brings in to keep it alive. The goal was to hit profitability in 2027-2028, when there are enough customers. Splitting it up now will kill Foundry altogether (and now with the CHIPS act, they are not allowed to kill Foundry). As for the concern about funding competition - not sure how much that is true. The vast majority of TSMC's customers (including AMD) do not want to use the leading edge node. It's more expensive, and has higher quality problems. They are happy to let Apple take it. Likewise, the narrative was that most of these companies will prefer not using Intel's latest node, and would be happy to let Intel use that capacity. So I think the plan was to make 18A mature, move to 14, and then external customers will use the mature 18A node.

BeetleB 2y ago

> I think the employee count blowup was his biggest mistake because it shortened Intel's runway towards being an external fab company. It was a mistake, but in terms of runway, would not have made a large difference. The capital costs of running a fab dwarf the cost to pay salaries. That's why they still do fabs in the US - outsourcing to another country doesn't save much money. > Another mistake of Pat's is that he did not split the company fully. I don't know that anyone knows what his plans were on this. Internally within the company (and perhaps externally), he was clear on a few things: - If Foundry cannot become profitable, he'll shut the fabs down and kill Foundry altogether. - The Products side will be charged market rates, and they can choose if they want to use Intel's fabs or TSMC - If an external company is willing to pay more than Intel Products, they'll prioritize the external company. So he was trying to set it up so that it was effectively two separate companies. I guess it was either harder than expected, or there was significant pushback. When he joined, the two sides were heavily intertwined. His goal for 2023 was to get things separated enough so we could get separate P&L statements for Foundry and Products. He achieved it - but I don't know if it could have been done quicker. The other (obvious) reason he didn't want to break the company up: Intel Foundry is unprofitable. They need the revenue that the Products brings in to keep it alive. The goal was to hit profitability in 2027-2028, when there are enough customers. Splitting it up now will kill Foundry altogether (and now with the CHIPS act, they are not allowed to kill Foundry). As for the concern about funding competition - not sure how much that is true. The vast majority of TSMC's customers (including AMD) do not want to use the leading edge node. It's more expensive, and has higher quality problems. They are happy to let Apple take it. Likewise, the narrative was that most of these companies will prefer not using Intel's latest node, and would be happy to let Intel use that capacity. So I think the plan was to make 18A mature, move to 14, and then external customers will use the mature 18A node.