Thread regarding Intel Corp. layoffs

It was obvious 10 years back if you examine the trajectory of arm and miniaturization, megatrends, one of those buzzwords which Intel people throw anround without full comprehension. Arrogance, hubris and denial.

IDM 3.0 will save Intel. Trust the plan.

Another thing to note is that fabs are more or less commoditized since everyone buys from the same equipment makers like ASML.

So, the low cost producer always wins in a commodity market. One achieves low costs via economies of scale (mega fabs). Intel is bringing a stick to a fight where the enemy has orbital cannons.

@gsa+1kzvRggL
Nobody said this 10 years ago.

10 years ago Intel invented finfet and had an unrivaled 4 year lead in process tech.

TSMC ran over Intel during that decade due to the flood of money coming in from mobile phones.

In the meantime, Intel was not able to keep up the pace due to lack of volume. Remember the empty fab shell in Arizona that sat there for years? The virtuous cycle of PC revenue was broken, directly responsible for a lack of R&D dollars for fab development. Intel did not embrace EUV soon enough due to expense. Intel did not have the scale to expand to compete with TSMC.

Once you lose scale, it’s very difficult to come back. Semi fabs are a winner take all game. Even if Intel, by some ridiculous miracle achieves parity in tech vs TSMC, their tiny factories cannot compete with the volume and scale of TSMCs megafabs. They will be absolutely smashed by sheer dollar amounts as TSMC can fast follow and run over any short term tech advantage.

People don’t seem to realize how formidable TSMC’s scale is. There’s a reason Warren Buffett dropped 4 billion into TSMC and not Intel.

@qrp+1kzvRggL
Nvidia has AI hardware and ecosystem locked up.

Nobody can overcome their hw/sw ecosystem advantage.

Greater value will get captured at the allocation level. See OpenAI and others with the expertise and knowledge (like Google)

Intel is the last place you want to be if AI is your thing. Intel still thinks it’s 1999.

Linux and Intel ki---d Sun Microsystems.
Ironic.

Jesus, if you guys are not seeing the huge potential in AI and you are not position yourself in it, it will be another miss like cell phone.

That's what they said 10 years back.

If we look at this as objectively as possible:

1. PC notebook and desktop will be slow growth market, but x86 is entrenched here and would be the last segment to fall to ARM. There will be pockets of losses such as Apple (that 'lifestyle' company) making 'ok' processors for their own machines. Assume glass half full and presume Intel regains process parity, if not leadership, and is able to stop share losses to AMD. Still, it isn't enough, so go to 2)

2. In Server space glass half full says that Intel still has competitive x86 offering. AMD is taking share like crazy. But will any of this matter? The writing is on the wall, ARM trajectory in cloud and servers is very very strong. It fundamentally is better mips/watt. So, this could crater Intel sooner than losses in client. Shockingly, in the last earnings announced Sever team was barely break even. Shareholders were aghast.

3. Manufacturing. Much has been written about this. To summarize, Intel simply cannot fill it's own fabs or afford the cost of each new generation. It must either divest fabs or compete with one of the best companies on the planet -- TSMC. There are many core competencies that Intel lacks -- tools and library ecosystem, low cost manufacturing, ability to run high sku mix at low volume, ability to support many legacy nodes. I am at a complete loss to understand how the BOD ever signed up to such a 'moonshot'. Anybody who understand the skills required to beat TSMC would never have signed up for this kind of wasteful capital investment. The argument that Intel must do this for National security interests is a pig in a poke. Trying to beat TSMC has (and will) destroy shareholder value.

For these reasons, we can easily predict that Intel is on a decline that may take as few as three years and as many as ten years. Intel may be able to extend it's life a bit if it gives up on the 'moonshot'. Either way, it won't be able to survive too long.

In case you think this can't play out this way, I remind you to study Sun Microsystems. They are the boastful company that 'put the dot in dotcom'. (Interestingly, boastful companies have a very poor track record of surviving). Sun peaked in 2000 and were generating 10s of billions in revenue and great profits. Only to be sold off by 2002 and by 2008/2009 Oracle had pretty much gutted what remained. Sun's early growth rate was 100% per year for 10 years running... only overshadowed by the absolute death spiral crash.

How dare you! You have stolen my dreams and my childhood with your empty words. And yet I'm one of the lucky ones. People are suffering. People are dying. Entire ecosystems are collapsing. We are in the beginning of a mass extinction, and all you can talk about is money and fairy tales of eternal economic growth. How dare you!

But our Messiah says IDM helps IFS and vice versa!

How dare you question his strategy that he forced the whole BoD to fully buy in and not question, same with the ELT, no questions and the only way.

Sounds a lot like Xi and CCP! When dissenting voices can’t be heard or issues debates is when companies fall into they abyss!

BTW, I agree that Design could become competitive using TSMC foundry if they are truly freed.

I disagree that Intel TMG can be competitive. Look at Global bleeding billions and similar to Intel fell off the treadmill. Similar to GF to small scale, no way to fill the fabs at scale. Dang they already worked at it for a decade and had an ecosystem and still bleeding. IFS can’t change the fundamental economics here, FUBAR