Intel will shut down its automotive business, lay off most of the department’s employees

[hist78]

"Intel will shut down its small automotive business and lay off the majority of the workers in that segment, the latest step in the chipmaker’s dramatic downsizing.

“Intel plans to wind down the Intel architecture automotive business,” the company told employees Tuesday morning in a message viewed by The Oregonian/OregonLive. The company said it will fulfill existing commitments to customers but will lay off “most” employees working in Intel’s automotive group."

Intel will shut down its automotive business, lay off most of the department’s employees

It's the latest step in the chipmaker's dramatic downsizing.

www.oregonlive.com

 

[osnium]

"Intel will shut down its small automotive business and lay off the majority of the workers in that segment, the latest step in the chipmaker’s dramatic downsizing.

“Intel plans to wind down the Intel architecture automotive business,” the company told employees Tuesday morning in a message viewed by The Oregonian/OregonLive. The company said it will fulfill existing commitments to customers but will lay off “most” employees working in Intel’s automotive group."

Intel will shut down its automotive business, lay off most of the department’s employees

It's the latest step in the chipmaker's dramatic downsizing.

www.oregonlive.com

Is it because Intel is not competitive or is it an issue with margins?

 

[MKWVentures]

Good move. Get out a businesses that are not making a difference.

 

[hist78]

Good move. Get out a businesses that are not making a difference.

These are small cuts compared to Intel’s overall size. Others with a bigger impact, such as the foundry operations for external customers, might also be part of the downsizing plan.

 

[osnium]

These are small cuts compared to Intel’s overall size. Others with a bigger impact, such as the foundry operations for external customers, might also be part of the downsizing plan.

If Intel shuts down foundry for external customers, it’s basically means that they will stop scaling because the cost structure won’t support it.

 

[siliconbruh999]

These are small cuts compared to Intel’s overall size. Others with a bigger impact, such as the foundry operations for external customers, might also be part of the downsizing plan.

These may be based on external customers that never panned out so they are letting them go.

 

[hist78]

If Intel shuts down foundry for external customers, it’s basically means that they will stop scaling because the cost structure won’t support it.

At what cost? Intel could lose economies of scale and be less profitable if it doesn't receive orders from external foundry customers. But the company could go bankrupt if it cannot recover the massive Capex investments made for external foundry operations.

Right now, Intel's top priority is survival.

 

[XYang2023]

From analyst comment today:

 

[osnium]

At what cost? Intel could lose economies of scale and be less profitable if it doesn't receive orders from external foundry customers. But the company could go bankrupt if it cannot recover the massive Capex investments made for external foundry operations.

Right now, Intel's top priority is survival.

Correct so if Intel can’t pursue future scaling because future volumes can’t justify it then it will be reliant on external foundries anyways. Why not just pull the trigger, write off all the capex, shut down TD and hand the fabs over to GF or TSMC and walk away to survive as a fabless player?

 

[siliconbruh999]

Correct so if Intel can’t pursue future scaling because future volumes can’t justify it then it will be reliant on external foundries anyways. Why not just pull the trigger, write off all the capex, shut down TD and hand the fabs over to GF or TSMC and walk away to survive as a fabless player?

GF doesn't have the ability to handle Intel fabs.

 

[XYang2023]

Intel No.2 for Foundry 2.0 | Electronics Weekly

If the foundry industry is defined as including packaging and mask making as well as front end, then TSMC is No,1 with 35% market share and Intel No.2

www.electronicsweekly.com

 

[hist78]

Correct so if Intel can’t pursue future scaling because future volumes can’t justify it then it will be reliant on external foundries anyways. Why not just pull the trigger, write off all the capex, shut down TD and hand the fabs over to GF or TSMC and walk away to survive as a fabless player?

Intel could spin off either its foundry division or its product division, making each a completely independent company. One or even both of them would likely have a better chance to survive or thrive on its own. On the other hand, pursuing external foundry customers in the name of achieving economies of scale seems like a suicidal mission that is hurting Intel both in the short term and the long term. It can kill the whole company.

Why should we believe that the fabless/foundry business model, which has reshaped the entire industry over the past 30+ years, somehow doesn't apply to Intel?

 

[XYang2023]

For Intel, the goal should be to extract as much value as possible from its previous foundry investments. Additionally, the foundry assets can serve as a form of geo-risk insurance—a strategic hedge.

Doubling down on the foundry business doesn’t necessarily benefit Intel; it may actually help its competitors by weakening Intel’s own product focus and providing a second-source option for other players. By keeping foundry investment to a minimum—scaling it based on actual customer demand—Intel effectively pays only the "insurance premium" to protect itself only.

 

[tooLongInEDA]

For Intel, the goal should be to extract as much value as possible from its previous foundry investments. Additionally, the foundry assets can serve as a form of geo-risk insurance—a strategic hedge.

Doubling down on the foundry business doesn’t necessarily benefit Intel; it may actually help its competitors by weakening Intel’s own product focus and providing a second-source option for other players. By keeping foundry investment to a minimum—scaling it based on actual customer demand—Intel effectively pays only the "insurance premium" to protect itself only.

Surely there isn't a "scalable minimum" at 14A and below (and hasn't been for a long time). The capital and effort needed is so large that you can only do this at scale - it's all or nothing and if your in-house demand is too low, it's simply unviable. I don't recall any semi company ever investing in leading edge fabs as an insurance premium either.

 

[XYang2023]

For Intel, they have the means to make it an insurance.

From ChatGPT:

If China were to annex Taiwan—especially through military force—it would have significant, potentially catastrophic consequences for TSMC (Taiwan Semiconductor Manufacturing Company) and the global semiconductor supply chain. The outcome would depend heavily on how the annexation occurs. Here are some possible scenarios and their implications:

---

1. Military Invasion Scenario​

If China uses military force:

Physical Infrastructure Damage​

• TSMC’s fabs could be damaged or destroyed in conflict. Its most advanced nodes (e.g., N3 and beyond) are fabricated only in Taiwan.
• TSMC fabs are delicate and require continuous clean operations. Disruption, even without direct destruction, could render them non-functional.

Talent Flight​

• TSMC’s success depends on its engineers and operational know-how, much of which could be lost if personnel flee or refuse to cooperate under new governance.

U.S. and Allied Sabotage or Sanctions​

• The U.S. could sanction or block equipment, materials, and software updates—crippling TSMC.
• Some analysts and policymakers have even discussed pre-emptive disabling of TSMC tools (e.g., ASML lithography machines) in a worst-case scenario.

Global Shock​

• TSMC is the world’s most advanced chip foundry. Disruption would:
  • Halt production for Apple, AMD, Nvidia, Qualcomm, etc.
  • Freeze tech sectors globally (smartphones, AI, autos, servers).
  • Cause a massive global recession in tech and manufacturing.

---

2. Peaceful Political Takeover (Highly Unlikely)​

If China achieves annexation with minimal resistance:

Operations May Continue... with Risk​

• TSMC might technically continue operating.
• But the global trust in the integrity and neutrality of its supply chain would be shattered.
• Customers may seek alternative suppliers (e.g., Samsung, Intel Foundry, U.S./Japan-backed initiatives).

Export Controls & IP Restrictions​

• The U.S. and allies would likely tighten export controls on EDA tools, extreme ultraviolet (EUV) lithography, and materials.
• TSMC’s ability to maintain leading-edge process nodes would degrade over time without access to Western tech.

---

3. Strategic Relocation (in progress)​

• TSMC is diversifying with fabs in:
  • Arizona, USA (N4 and N3 lines, mid/late 2020s)
  • Japan (28nm, 12/16nm and possibly N2 later)
  • Germany (under planning)
• But these cannot replace the full capacity or capability of Taiwan-based fabs—yet.

---

In Summary​

[table]
[TR]
[TH]Scenario[/TH]
[TH]Impact on TSMC[/TH]
[TH]Global Consequences[/TH]
[/TR]
[TR]
[TD]Military invasion[/TD]
[TD]Likely catastrophic[/TD]
[TD]Severe semiconductor shortage, economic shock[/TD]
[/TR]
[TR]
[TD]Peaceful annexation[/TD]
[TD]Operations may persist, but under pressure[/TD]
[TD]Loss of trust, strategic decoupling[/TD]
[/TR]
[TR]
[TD]Strategic relocation[/TD]
[TD]Helps mitigate risks[/TD]
[TD]Long-term resilience, not short-term protection[/TD]
[/TR]
[/table]

---

Let me know if you'd like a deeper dive into specific aspects (e.g., U.S. military or economic policy, tech supply chain impact, or how companies like Apple or Nvidia would be affected).

 

[benb]

William Spaniel, on his YouTube channel "Lines on Maps," addresses the geopolitical significance of TSMC (Taiwan Semiconductor Manufacturing Company) within the context of the potential conflict between China and Taiwan. His analysis focuses on the concept of the "Silicon Shield", which suggests that TSMC's dominance in the global semiconductor industry, particularly in advanced chips, acts as a deterrent against a Chinese invasion of Taiwan.
Key Points from William Spaniel's analysis:

• Taiwan's dominance in chip manufacturing: TSMC holds a critical position as the world's leading semiconductor foundry, especially in producing advanced chips below 7 nanometers. This dominance is essential for AI, high-performance computing, and various other crucial technologies, making TSMC a vital part of the global economy.
• The "Silicon Shield" concept: The idea is that China's reliance on TSMC's advanced chips for its own economic growth makes a full-scale invasion of Taiwan too costly for Beijing. Similarly, the US and its allies' dependence on Taiwan's chip supply incentivizes them to deter potential geopolitical risks, further bolstering the "Silicon Shield".
• The U.S.-China technology rivalry: The escalating trade war and technology restrictions between the US and China have positioned TSMC as a central player in the global technology order. The US has pressured TSMC to establish manufacturing facilities in the US to reduce dependence on Taiwan.
• TSMC's strategic response: TSMC is strategically expanding its manufacturing footprint beyond Taiwan, with major investments in the US (Arizona), Japan (Kumamoto), Germany (Dresden), and other regions. This diversification aims to mitigate geopolitical risks and ensure supply chain resilience.
• Challenges of diversification: Despite the benefits, TSMC faces challenges in establishing new facilities abroad, including high production costs and talent/experience gaps.

In summary, William Spaniel's "Lines on Maps" suggests that while TSMC's "Silicon Shield" provides a degree of protection for Taiwan due to global reliance on its advanced chips, the intricate geopolitical landscape, particularly the US-China rivalry and diversification efforts, introduces both risks and opportunities for the company and the broader region.

 

[benb]

While I wish there was such a thing as a silicon shield, and thus would be happy to be wrong, I don't think it provides an ounce of deterrence to the CCP.

In a few years China will be self-sufficient, while the US will be Taiwan-dependent. This creates an additional incentive to capture Taiwan, the opposite of an incentive for peace: Namely, control Taiwan and you control the US as well.