Pat Gelsinger pitched a strategic reversal to Intel’s board. They liked it so much, they made him CEO

[tooLongInEDA]

What's with the patriotic American "can-do"-ism? US "playing too nice"? When has the US ever played to nice when something serves its national interest?

You talk like the US actually does anything innovative for the sake of innovation, when it's really just all about money.The reason the US fell behind in semis is the same reason it fell behind on manufacturing in general - deregulated capitalism with no central planning. Companies move production offshore to cut cost and increase profit margins. Moving production back do domestic shores will only happen if it makes sense financially - some subsidies from the Feds is nice but ultimately just a band-aid compared to what China is able to do with their industry planning.

As for Taiwan and South Korea, they are just too far ahead by this point for any other country to seriously catch up. And that situation won't change for as long as big American tech companies continue to rely on them for their tech leadership.

Capitalism is a an ouroboro. We reap what we sow.


This exactly. Intel embodies the textbook American corporate culture. For a long time after WWII America has enjoyed a financial & industry monopoly on international trade because, well, most other industrial countries were bombed into smoking ruins. Times have changed and we no longer have tech & industrial leadership. Intel's business model simply can't compete anymore. To truly innovate they will need to open up and allow ideas and technologies to flow, instead of guarding their secrets like some cultish cabal.

The "can-do" Americans moved onto more exciting (for them) leading edge technology areas with higher immediate ROI. They certainly have not stopped innovating. There are pluses and minuses to US corporate culture (the invention of the cube farm is not anything to boast about in my book) but they've certainly mastered the tech startup and successfully exported that model around the world over the last 20 years.

That alone has bootstrapped a lot of technical and business advance around the world. I've always found the US technical/business culture the most open.

All big companies tend to become inward looking. Intel has the additional challenge of having been an effective monopoly supplier for so long. I'm not sure that's unique to the US.

It's tempting to believe that the US have somehow has a "free ride" since WW2 and enjoyed some sort of "unfair advantage". If there was (I'm dubious on that), I suspect that's second order and that the first order advantage is their innovation and hard work. [I'm not from the US].

One detail - over the last 30 years, the largest exporting countries have been Germany, Japan and China. The US might have strong influence, but it's not dominant.

Back to the point - does it really matter that the fabs are offshore ? Since the US is the defence guarantor of Korea (and presumably Taiwan) ? In the worst case, you can either take the hit on extra defence costs (if it's not enough already) to mitigate the risk or bring the fabs back - or both.

 

[count]

What's with the patriotic American "can-do"-ism? US "playing too nice"? When has the US ever played to nice when something serves its national interest?

You talk like the US actually does anything innovative for the sake of innovation, when it's really just all about money.The reason the US fell behind in semis is the same reason it fell behind on manufacturing in general - deregulated capitalism with no central planning. Companies move production offshore to cut cost and increase profit margins. Moving production back do domestic shores will only happen if it makes sense financially - some subsidies from the Feds is nice but ultimately just a band-aid compared to what China is able to do with their industry planning.

As for Taiwan and South Korea, they are just too far ahead by this point for any other country to seriously catch up. And that situation won't change for as long as big American tech companies continue to rely on them for their tech leadership.

I think Intel's problems are Intel specific.

There are plenty of US companies that are doing amazing, innovative things in tech (Apple, Google, NVidia, Tesla - list goes on). Intel just isn't one of them.

The US does have an issue with manufacturing, but manufacturing isn't really about innovation, it's about doing something over and over again consistently getting incrementally better and cheaper over time. There are reasons that the US can't compete with Asia on manufacturing, but when it comes to Innovation the US is doing great.

 

[ashwinbrao]

I am curious why none of the comments here look at the ARM angle....During the last earnings call, one of the analysts asked about the possibility of licensing all of Intel's IP to its foundry customers and the CEO's response was a loud "Yes". Any chance that IDM 2.0 is really an attempt to get more users to adopt Intel's IP as opposed to ARM's so that Intel remains dominant in the server space?

 

[Daniel Nenni]

From this, I agree that the root of Intel's problems is that their core markets (x86 in PCs and datacenters) will not generate the volumes required for continued scaling and there are only 2 viable solutions.

1. Create a foundry business and hope to bring in the volumes required
2. Go fabless

Intel attempted option 1 before and failed miserably and I think they will fail again on this second attempt. The reasons are culture, incentives, and competition.

The foundry business requires a really cooperative, trusting culture, and Intel's culture is all about monopolization and paranoia. They want to be the king, are ultra paranoid of any threats to their monopoly, and have a lingering "not invented here" attitude, all of which is not conductive to the types of collaborative relationships required to be successful as a foundry. You see this in them taking industry accepted terms and standards and them trying to rebrand them as if they were something Intel exclusive (Intel Tiles vs chiplets, Intel Tri-Gate vs Fin Fet). You can also see how when they approached 3D Xpoint, which was a promising technology, they effectively crippled by locking it to Intel sockets. You can't pull stunts like this as a foundry and still have credibility with your customers.

Intel has every incentive not to be a good foundry partner, as they are directly or indirectly competing with many of their potential customers. The three largest foundry customers are Apple, NVidia, and AMD. With Apple now producing it's own chips and NVidia and AMD direct competitors they have 0 chance at winning any of those customers. And even if they did... Intel isn't going to want to make AMD or NVidia better.

Finally, I just don't think Intel has what it takes to compete with TSMC head on.

So that only leaves option 2. Intel needs to go fabless.

And remember that the last time Intel tried the foundry business they were process nodes ahead of the foundries whereas now they are process nodes behind.

Option 3 is fab light. Use TSMC for low power/low cost chips and use Intel fabs for big high performance chips. Intel will do this in 2023 with TSMC N3 and I doubt that hey will be able to go back to their IDM 2.0 plan, absolutely.

 

[count]

I am curious why none of the comments here look at the ARM angle....During the last earnings call, one of the analysts asked about the possibility of licensing all of Intel's IP to its foundry customers and the CEO's response was a loud "Yes". Any chance that IDM 2.0 is really an attempt to get more users to adopt Intel's IP as opposed to ARM's so that Intel remains dominant in the server space?

I don't think Intel will license it's x86 IP out like ARM. Legally I don't think they can because of the cross licensing agreement they have with AMD. I think Intel will more likely license peripheral IP and also provide customers with more design input. But that's not very much different than the situation today.