Intel's biggest Misses AI and Mobile?

[hist78]

TSMC is not a risk taker due to it's customer has there anything risky they have done before ? High-K strained silicon Finfet Etc were all done by Intel hey have to carry multiple customer so they take low risk approach shifting of BSPD from N2 -> A16 is such a move

I believe TSMC does take risks, even high risks, but it often focuses on risks that it has a better understanding of. Don't forget that starting a pure-play foundry 37 years ago, without knowing how many customers would come, was an incredibly risky move in itself.

Another example is their 2009 decision to invest $100 million and assign 400 engineers to develop an advanced packaging solution. At the time, no major customers, including Nvidia and Qualcomm, were interested in using the service at all.

During the pandemic in 2021, TSMC embarked on a 3-year, $100 billion capital expenditure initiative. There’s no doubt that this was another bold and high-risk move.

 

[hist78]

You say it must be the IDM model. But if it's been recurring for 10-20 years, couldn't it equally well be culture (or both) ?

Without any real personal experience of Intel, I can only "characterise" from external observations. One of my strongest impressions is that it grew up with a very strong NIH element to its culture. TI sometimes felt like that (note: this is decades old data) - very large sites, somewhat geographically isolated from other companies, resistance to external hiring for experienced staff, legacy of being a leader breeding over-confidence. But TI had to confront the reality of being one of many companies rather sooner.

A company's business model shapes its corporate culture, business strategy, decision-making, and the kind of leaders it hires to run the organization.

Corporate culture is critical, yet it’s an abstract concept. For Intel, it would be difficult to change its culture without first making fundamental changes to its business model.
.

 

[tedc]

I don't think you can solely blame the IDM model. Intel made their biggest and most successful pivot (so far) transitioning from memory chips to logic chips.

 

[siliconbruh999]

That was Andy Grove iirc people of his calibre are rare

 

[hist78]

What model change exactly are you thinking would help the pivot? How would not being IDM have helped them decide to go for Apple's iphone business when they already were manufacturing StrongARM at Intel's fabs?

On June 29, 2007, Apple released the first iPhone. However, a year earlier, in June 2006, Intel sold its XScale/StrongARM division to Marvell Technology. From Intel’s perspective, x86 processors were the main focus, while ARM-based processors and the emerging smartphone market, including the iPhone, seemed too small to warrant serious attention.

At that time, Intel’s IDM business model and its Wintel alliance with Microsoft were thriving. Business was so strong that Intel didn’t feel the need to prepare for the challenging years ahead.

IMO, Intel could split into three independent companies: a fabless product company, a pure-play foundry, and an investment holding company that manages equity stakes in Altera, Mobileye, IMS Nanofabrication, and others.

 

[hist78]

I don't think you can solely blame the IDM model. Intel made their biggest and most successful pivot (so far) transitioning from memory chips to logic chips.

In 2024, Intel's IDM model is the primary root cause of its challenges. Most of Intel's issues are chain reactions stemming from it.

 

[samwilde]

On June 29, 2007, Apple released the first iPhone. However, a year earlier, in June 2006, Intel sold its XScale/StrongARM division to Marvell Technology. From Intel’s perspective, x86 processors were the main focus, while ARM-based processors and the emerging smartphone market, including the iPhone, seemed too small to warrant serious attention.

At that time, Intel’s IDM business model and its Wintel alliance with Microsoft were thriving. Business was so strong that Intel didn’t feel the need to prepare for the challenging years ahead.

For Intel StrongARM was something foisted on them by the Digital Equipment Corporation (DEC) lawsuit. They never tried to market it properly. A big mistake in my opinion.

 

[blueone]

It reminds me of the saying "build it and they will come" only semiconductor companies want a say in what's being built which does not fit Intel's or Samsung's IDM business model.

If you're implying that IFS and Samsung Foundry are not listening to potential customer requirements up front, and just offering a take-it-or-leave-it process to customers, I don't believe either company is that stupid.

 

[blueone]

Perhaps it's just nuance, but do we really think that the CEO needs to be a "deep expert" in both design and manufacturing ? Doesn't feel quite right to me. I'd rather say he/she needs to have some instinctive grasp and feel (and some experience) for both disciplines - to know in advance what definitely won't work, what might and what the risks and opportunities are and how to balance these. It's hard enough to find that in one person. I agree that if someone's too biased to one discipline, that's not ideal.

Yes, I believe that in order to be a judge of a strategy you must have a highly technical grasp of strategies being proposed. If you're just depending on "someone you trust" to have that expertise, well, that's how Itanium was born.

 

[blueone]

Corporate culture is critical, yet it’s an abstract concept. For Intel, it would be difficult to change its culture without first making fundamental changes to its business model.

You've worked for Intel?

 

[hist78]

For Intel StrongARM was something foisted on them by the Digital Equipment Corporation (DEC) lawsuit. They never tried to market it properly. A big mistake in my opinion.

StrongARM evolved to Inetl XScale. Around 2003, Intel StrongARM/XScale processors had about 35% share of handheld device market. Sadly in 2006 Intel sold its ARM division to Marvell Technology. Today Intel's market share in the mobile phone market remains at 0%.

 

[BruceA]

Required reading for everyone!

How Intel Missed the iPhone : The XScale Era

Challenging the conventional narrative on Intel's smartphone miss

thechipletter.substack.com

Intel was lucky and made their luck. Clearly in the last 20 years a lot of things came to ruin them.

To rise again the first thing you need is the Board of Directors, the CEO and the senior leaders or the ELT as they are called to really realize where they are and what the they need to do. But that isn’t enough the ELT need to get into the details and force a culture pivot in addition to this strategy change!

Pat may have a strategy but it isn’t clear that Intel has the culture or execution mindset to execute competitively against Apple, Nvidia, AMD, Qualcomm or the super scalars on design /product. On the technology/ manufacturing side I think they have no clue to how behind they are on culture. There is no corner on architecture, tools or chemistry and physics but on culture and execution will be why they fail.

It is always as a great innovator said it is easy to connect the dots looking backwards. I’d say it’s less than 50:50 this IDM2.0 IFS is going to fly. As noted above it’s about culture and listening to Pat and watch his body language it ain’t looking good is it ?

 

[BruceA]

On June 29, 2007, Apple released the first iPhone. However, a year earlier, in June 2006, Intel sold its XScale/StrongARM division to Marvell Technology. From Intel’s perspective, x86 processors were the main focus, while ARM-based processors and the emerging smartphone market, including the iPhone, seemed too small to warrant serious attention.

At that time, Intel’s IDM business model and its Wintel alliance with Microsoft were thriving. Business was so strong that Intel didn’t feel the need to prepare for the challenging years ahead.

IMO, Intel could split into three independent companies: a fabless product company, a pure-play foundry, and an investment holding company that manages equity stakes in Altera, Mobileye, IMS Nanofabrication, and others.

The split won’t work now for the manufacturing side. Given a choice I think the product team would choose TSMC. The foundry would have nothing but being the western technology security blanket. That sadly makes Intel become what the Lockeed Martin of chips.

 

[BruceA]

I don't think you can solely blame the IDM model. Intel made their biggest and most successful pivot (so far) transitioning from memory chips to logic chips.

Let’s not forget if IBM hadn’t picked 8086 x86 Intel might never have become Chipzilla and it could have been Zilog or Motorola.

 

[BruceA]

I believe TSMC does take risks, even high risks, but it often focuses on risks that it has a better understanding of. Don't forget that starting a pure-play foundry 37 years ago, without knowing how many customers would come, was an incredibly risky move in itself.

Another example is their 2009 decision to invest $100 million and assign 400 engineers to develop an advanced packaging solution. At the time, no major customers, including Nvidia and Qualcomm, were interested in using the service at all.

During the pandemic in 2021, TSMC embarked on a 3-year, $100 billion capital expenditure initiative. There’s no doubt that this was another bold and high-risk move.

Those were/are business investment based on demand from customers and some forecasts. That is very different than their technology innovation. I could argue their immersion and EUV are innovations but they took them in baby steps.

What is lost is the subtle impact of a few leaders have on these decisions made at TSMC and wrong or not made by a few leaders at Intel

 

[Xebec]

Let’s not forget if IBM hadn’t picked 8086 x86 Intel might never have become Chipzilla and it could have been Zilog or Motorola.

Agree; (a bit OT) - some credit to Intel here; they actually had their support chips ready, available, and in production on time. Motorola failed hard here.

 

[blueone]

Pat may have a strategy but it isn’t clear that Intel has the culture or execution mindset to execute competitively against Apple, Nvidia, AMD, Qualcomm or the super scalars on design /product. On the technology/ manufacturing side I think they have no clue to how behind they are on culture. There is no corner on architecture, tools or chemistry and physics but on culture and execution will be why they fail.

Have you worked for Intel? I'm just curious... I read people here posting about company culture who have never worked for Intel. In my experience, you can't really understand a corporate culture and how it will perform until you've been part of it. Intel has, IMO, numerous improvements they could make to their culture, but simply making broad judgement statements about how behind they are culturally does not have any value.

 

[Xebec]

Have you worked for Intel? I'm just curious... I read people here posting about company culture who have never worked for Intel. In my experience, you can't really understand a corporate culture and how it will perform until you've been part of it. Intel has, IMO, numerous improvements they could make to their culture, but simply making broad judgement statements about how behind they are culturally does not have any value.

I'll take a stab here -- you can learn a lot about a company's culture from the outside.

Intel isn't pivoting very fast (mobile, graphics, AI, data center, fabrication), there are interviews of with ex-Intel employees that tell a lot (Jim Keller's discussion a few years ago about a defeatist culture in the fabrication area was eye opening - "Moore's Law is dead"), and the amount of innovation actually making it into products has been historically low (for Intel) until recenlty (not perfect but improving).

Corporate cultures tend to be defined at the top*, and the last two CEOs before Pat certainly weren't superstars. Pat has his hands full, and jury is still out there. (*though older companies tend to have mature processes that also influence culture over time).

It was interesting reading the marketing book on the early days of Intel (forgetting the name) that talked about Operation Crush and how the Intel organization worked under Andy Grove. Starting with Otellini until Pat, Intel didn't seem to be really hungry for winning new business.

None of this precludes the awesomeness of the engineers, architectures, and techncial staff at Intel (or individual leaders). I think we're all certain they have a lot of superstar talent, and people really dedicated to the mission. But the management culture by and large over the past decade looks .. like it could do better.

 

[samwilde]

StrongARM evolved to Inetl XScale. Around 2003, Intel StrongARM/XScale processors had about 35% share of handheld device market. Sadly in 2006 Intel sold its ARM division to Marvell Technology. Today Intel's market share in the mobile phone market remains at 0%.

Paul Otellini got the job of Intel CEO in 2005. The first thing he did when he got control was to axe 10% of Intel's workforce to improve their profits and raise the stock price. That was when they sold XScale to Marvell.

Paul Otellini was trained in economics i.e. not an engineer but more like CFO material.

Pat Gelsinger was a competitor to Paul Otellini for the job of CEO.

Intel's Barrett: I will retire

But not yet Pat, Paul and Sean

www.theregister.com

Oh, Paul Otellini earned a business award for axing 10% of Intel's workforce.

 

[BruceA]

Starting with Otellini until Pat, Intel didn't seem to be really hungry for winning new business.

There were few business as lucrative as what Wintel had for twenty years. That situation and durations is why you have the Intel today with its trouble and challenge.

For intel the x86 monopoly as well as the profit margins were so obscene for so long the culture around both product and process and manufacturing innovation became so skewed. I could argue it is now so imprinted in the senior leaders, processs and procedures it will take a strong outside leader and an existential moment to drive change. Clearly the existential moment has come but not clear the leadership is changing inside.