What would it take for Samsung to start delivering? They seem to have all the right ingredients and Morris Chang always thought of Samsung as TSMC’s strongest competitor due to a number of factors.
Moor Insights: “[if] you spin out IFS before Design & IFS is healthy, it will fail”
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Abu Dhabi wanted to diversify their economic reach beyond oil. It was a money play that went horribly wrong. The question I have is: Did they make money on the sale of AMD stock and the GF IPO? Or was it a net loss? Do they still have significant equity in AMD and GF? Someone run the numbers if you can. That would be an interesting blog post.
They had a 12.9% stake of AMD, and actually made money on the sale of AMD stock. I don't believe that they still have much AMD stock anymore (if any), I remember that they sold a lot of AMD stocks in 2020, when $AMD was $60-$100.
Many years ago Intel also saw Samsung as their greatest threat, for obvious reasons form looking outside, but the last decade has shown their is something very rotten in Samsung and maybe they have pivoted but no outward signs as of yet.
Pat at intel and others talk a lot but 2025 will be the first time we see if they are real
hist78
Well-known member
Fabless companies that are also Intel's competitors:
Nvidia
AMD
Qualcomm
Apple
Ampere
Cerebras
MediaTek (soon, due to Nvidia-MediaTek's desktop/notebook processors codevelopment project)
Broadcom
Hyperscalers or Cloud service providers that are Intel's competitors due to inhouse designed processor products:
Amazon
Microsoft
Meta/Facebook
Fab-lite companies that are Intel Foundry's competitors due to JSMC or ESMC joint projects with TSMC:
Sony
Denso (world second largest auto parts supplier)
Bosch (world largest auto parts supplier)
NXP
Infineon
Hyperscalers mentioned above might have the potential to place orders at the Intel Foundry. The problem is their volume would be very limited.
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No body wants a monopoly from one company especially when it is a 100 miles away from a billion people and leader who thinks that country is a rouge province.
Like the world let AMdD limp along, if IFS proves real at 18A and delivers also on 14A all the more reasons for the trillion dollar companies to do a few designs there and keep Intel solvent and going.
Competition is always good for the consumer and that is the fabless here
hist78
Well-known member
If Intel Foundry is viable and necessary for the US or the world, it must spin off from Intel to receive government bailouts. Politically and legally, this is the only path. Otherwise, Intel's US competitors will do everything they can to stop it, and the public won't support it either.
There is no way Intel's product division deserves a government subsidy just because the Intel Foundry is in trouble.
The CHIPS Act has the grants and tax breaks tied to manufacturing deliverables. Or are you referring to something else, like a literal bailout/nationalization of Intel as a whole?
I think Intel will spin out IFS in the future, and they are doing all the necessary steps now e.g. separating P&L, establishing firewalls. But under current circumstances, splitting out IFS is financially irresponsible to Intel employees, investors and U.S. taxpayers.
IFS needs to deliver 18A in 2025, and it will be OK for Intel products to fill its capacity if 18A is really as good as Intel management touted. In fact, if it is really that good, it is Intel competitors' loss not to use it.
hist78
Well-known member
It seems Chips Act money is not sufficient to revive the Intel with its current structure. Intel actually may even lose part of the Chips Act grants due to the fabs construction scale back (if Intel chooses to do so). If the Intel Foundry deserves a government's rescue, the only feasible way is make it as an independent company.
Intel’s Long Decline
Stratechery has, from the beginning, operated with a great degree of reverence for tech history; perhaps that’s why I’ve always been a part of the camp cheering for Intel to succeed. The unfortunate fact of the matter is that the need for cheerleading has been clear for as long as I have written this blog: in May 2013 I wrote that Intel needed to build out a foundry business, as the economics of their IDM business, given their mobile miss, faced long-term challenges.Unfortunately not only did Intel not listen, but their business got a lot worse: in the late 2010’s Intel got stuck trying to move to 10nm, thanks in part to their reluctance to embrace the vastly more expensive EUV lithography process, handing the performance crown to TSMC. Meanwhile Intel’s chip design team, increasingly fat and lazy thanks to the fact they could leverage Intel’s once-industry-leading processes, had started to fall behind AMD; today AMD has both better designs and, thanks to the fact they fab their chips at TSMC, better processes. Meanwhile, the rise of hyperscalers meant there were entities that both had the scale to justify overcoming whatever software advantages Intel had, and the resources to do so; the result is that AMD has been taking data center share for years, and is on the verge of passing 50%:
Intel Honesty
The best way to both save Intel and have leading edge manufacturing in the U.S. is to split the company, and for the U.S. government to pick up the bill via purchase guarantees.
stratechery.com
This is what makes IFS so difficult. There aren't many whale fabless companies who can allow leading-edge foundries burn more money. Apple, NVIDIA, Qualcomm, AMD...etc. For IFS, Intel design team is one of the 'hidden' whale who made them alive. In some ways, Intel design team is financing IFS till they are healthy again. This is the reason why TSMC wafer agreement happened. Intel products needs to be competitive to finance IFS.
But IFS still has long way to go. Sadly, most of fabless customers are mobile(smartphone...etc) customers. 1.2+billion mobile devices sold per year. But IFS is not designed to 'mobile first' because Intel products team is HPC by nature(CPUs). But HPC whales aren't really fond of IFS. Both Apple and AMD(who's behind the mirror) have no reason to go for IFS. NVIDIA, maybe. But they shouldn't risk breaking their business by changing foundry when they have +70% of gross margin product. I think this is part of reason why we're not able to see IFS revenue till 2027. Focusing on large mobile market hurts current Intel products so mobile derivative comes later.
While their innovation go on, market situation got worse. There wasn't any 'PC market boom' during 2021~2024. Intel still needs additional 8B funding to fuel IDM 2.0 every year, so a few bilillion products revenue decrease mean them a lot, large enough to consider stopping construction, IFS spin-out and less snacks for employees. It might work, If they successfully finance IFS by enlisting IFS to nasdaq(wherever) enough to keep them alive till 2027~2028 timeline. If not, it still might allow Intel live as 'old, whale fabless' which somehow makes people nostalgic about good "Moore the better" days. Intel we knew gone forever in that case.
But IFS still has long way to go. Sadly, most of fabless customers are mobile(smartphone...etc) customers. 1.2+billion mobile devices sold per year. But IFS is not designed to 'mobile first' because Intel products team is HPC by nature(CPUs). But HPC whales aren't really fond of IFS. Both Apple and AMD(who's behind the mirror) have no reason to go for IFS. NVIDIA, maybe. But they shouldn't risk breaking their business by changing foundry when they have +70% of gross margin product. I think this is part of reason why we're not able to see IFS revenue till 2027. Focusing on large mobile market hurts current Intel products so mobile derivative comes later.
While their innovation go on, market situation got worse. There wasn't any 'PC market boom' during 2021~2024. Intel still needs additional 8B funding to fuel IDM 2.0 every year, so a few bilillion products revenue decrease mean them a lot, large enough to consider stopping construction, IFS spin-out and less snacks for employees. It might work, If they successfully finance IFS by enlisting IFS to nasdaq(wherever) enough to keep them alive till 2027~2028 timeline. If not, it still might allow Intel live as 'old, whale fabless' which somehow makes people nostalgic about good "Moore the better" days. Intel we knew gone forever in that case.
There seems to be a core issue with using Intel Products to fund IFS. Many believe that once IFS is fully developed, Intel should separate it. If that’s the plan, why should Intel Products support IFS financially, especially when it puts them at a market disadvantage? Intel Products should focus on funding their next-generation innovations rather than acting as a safety net for other American companies.
The funding of IFS should be done by the US government. If US gov cannot fund it, there is no reason to ask Intel Products to fund it.
bashee_wang
New member
So either Intel totally has no plan to split off its foundry, or no alignment between high management.
The fact that TSMC is out competing Intel doesn’t lead to this conclusion. It is very inflammatory. And wrong