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Another serious issue Intel and Microsoft are facing is how to maintain their ecosystem. If Intel or Microsoft's partners can't make meainingful profit, the ecosystem will collapse sooner or later. From the follwong January 2014 Gaurdian's analysis, a PC maker earns $14.87 or a 2.73% profit margin for making a PC. Since then I don't think the situation has improved much. Both Intel and Microsoft can insist they deserve their fat profit margin, but they will find less and less willing partners to work with.
Contra-Revenue only relates to tablet processors, not desktop processors.
$15 a unit isn't so bad, when you consider 300,000,000 will be sold. The vast majority of the R&D is done by Intel, AMD, NVIDIA, Microsoft, etc..., so the PC maker is more of a distributor than anything else.
It also allows tie-in with other devices, like servers, which have higher margins. Many companies do not wish to buy from two different vendors, because if there's a problem, support can be frustrating (the different vendors blame each other).
But, really, you don't see a single PC vendor running away from the business, so that tells you they are doing fine. Years ago, a lot of them either left it (IBM), or went away/bought by another company (Gateway, et al), but these days, we see none of that.
Another serious issue Intel and Microsoft are facing is how to maintain their ecosystem. If Intel or Microsoft's partners can't make meainingful profit, the ecosystem will collapse sooner or later. From the follwong January 2014 Gaurdian's analysis, a PC maker earns $14.87 or a 2.73% profit margin for making a PC. Since then I don't think the situation has improved much. Both Intel and Microsoft can insist they deserve their fat profit margin, but they will find less and less willing partners to work with.
The article was a good read; thanks. It sort of answers your question though--Windows PCs running Intel chips won't be the focus for struggling PC makers. ChromeOS, running on "good enough" tablet processors like Exynos and Tegra will gain share in the future. MacOS will gain share also, more or less for the same reason--A9 and A10 chips. iOS and Android will have full versions of Microsoft Office soon. If one of these struggling PC makers can build a decent Android tablet, a decent ChromeOS notebook, they may be able to turn around; otherwise all the changes in the industry, driven by disruptive mobile chips, will claim many victims.
Today and last year it was memories by far. In the last 6 months memory pricing has fallen 25% and is continuing the downward trend. Prior to from roughly '07 to '12 it was the processor. This is all based on market price volatility.
The foundry business is feast or famine, DRAM is a war of attrition. This makes it difficult to compare directly.
Altera yearly revenue is not quite $2 billion yet. My worry is that once Intel pays $10~13 billion for Altera and Altera's $2 billion revenue, Intel might not have enough financial strength to do other big acquisitions for the next 3 to 4 years. This Altera deal may push Intel out of other future opportunities. IMHO, next 3 -4 years is crucial to Intel's long term prospect. If Intel does miss this 3~4 years, there might not have a second chance for them.
Intel's "current ratio" (measures a company's ability to pay short-term obligations, bigger is better) is as low as 1.73 already and currently it has only about $14 billion cash in hand.
In comparison, even AMD has a better "current ratio" than Intel.
Intel 1.73
SK Hynix 1.79
AMD 1.9
Micron 2.19
Samsung 2.21
MediaTek 2.45
TI 2.92
TSMC 3.12
Broadcom 3.27
Infineon 3.28
QUALCOMM 3.55
Xilinx 3.85
Altera 5.72
1.Stop the culture of arrogance disrespect to companies.
2 Stop the fool running after Moore's law the cost of R&D in going from 20nm to 14nm to 10nm to 7nm Just does not payback as Transistors are more expensive sub 28nm. The yield is so low on Intel 14nm that all savings from shrink 22>14 are lost.
3 Make designs that are on the same basic platform as your competators do not claim you are years ahead. ( 28nm Arm chips outperfomed 22nm intel Atom chips)
4.Play by the rules of fair play.
Arrogance - an insulting way of thinking or behaving that comes from believing that you are better, smarter, or more important than other people
"In an interview with Business Insider Thursday, Intel's CFO Stacy Smith brushed off those concerns. Smith said that Intel is so far ahead of the competition when it comes to PC processors that Apple (and just about every other PC maker) has no choice but to use Intel chips." .
Note Stacy Smith comments Show why Intel will fail.
2 Stop the fool running after Moore's law the cost of R&D in going from 20nm to 14nm to 10nm to 7nm Just does not payback as Transistors are more expensive sub 28nm. The yield is so low on Intel 14nm that all savings from shrink 22>14 are lost.
3 Make designs that are on the same basic platform as your competators do not claim you are years ahead. ( 28nm Arm chips outperfomed 22nm intel Atom chips)
In March 2015, I posted this question to the SemiWiki and got many insightful comments. Fast forward to the end of 2020, Intel is at a junction facing multiple and serious challenges.
If you are going to be Intel's next CEO (or if you "are" the CEO now), what's in your mind?
In March 2015, I posted this question to the SemiWiki and got many insightful comments. Fast forward to the end of 2020, Intel is at a junction facing multiple and serious challenges.
If you are going to be Intel's next CEO (or if you "are" the CEO now), what's in your mind?
Something will have to change with Intel manufacturing. A deep outsourcing partnership with TSMC seems to me the best solution. In my opinion that is the way Bob Swan will manage Intel manufacturing moving forward. Either they do their job or they get outsourced, absolutely.
In short summary, "be paranoid" as the former CEO taught!
On the technical side:
- in PC: Apple slapped Intel hard in the face with the M1, but there is really only Apple out there that can come with that prowess. AMD is a bit ahead, probably with a significant help from the tech node. Qualcomm's 888 is reportedly far behind Apple's M1, but they are coming, or somebody else will (maybe Nvidia with its move on ARM?). So Intel needs to:
- outsource the top-performance devices to an external foundry (Samsung?)
- move to a RISC architecture for low-power (RISCV might be not mature enough, but would be a bet that avoids being locked-in with Nvidia)
- Do whatever it takes to provide the best x86 emulation in town over RISC architecture (LLVM, QEMU... you name it!). Legacy software compatibility will be a leitmotiv for a while. Microsoft might be a good ally for that, if they can deliver.
- in server: put together efforts from GPU, Altera, and Mobileye divisions to come up with competitive solutions for ML. The only real threat in perspective seems Nvidia, today.
On the financial side:
- drop unprofitable businesses
- find customers for the fabs (eventually repurpose them for different application such as analog/RF, as GlobalFoundries did with 22nm), or wind them down (unless US pays to keep them open). Chinese companies might be the right technical partners, if they were not banned...
Something will have to change with Intel manufacturing. A deep outsourcing partnership with TSMC seems to me the best solution. In my opinion that is the way Bob Swan will manage Intel manufacturing moving forward. Either they do their job or they get outsourced, absolutely.
If employees at Intel will be held accountable than the universities and govt has to be held accountable as well.
first our universities are decorative and lacking of substance.
Second a picture is worth a thousand words, governor Kate brown looking like that promoting a vaccine from Ariel university and having no clue what it is says it all.
If employees at Intel will be held accountable than the universities and govt has to be held accountable as well.
first our universities are decorative and lacking of substance.
Second a picture is worth a thousand words, governor Kate brown looking like that promoting a vaccine from Ariel university and having no clue what it is says it all.
Facebook, Amazon, Google, Microsoft seem to have no trouble sourcing good talent from US universities. The difference is these companies hire and promote engineers, while Intel hires and promotes MBAs.
Facebook, Amazon, Google, Microsoft seem to have no trouble sourcing good talent from US universities. The difference is these companies hire and promote engineers, while Intel hires and promotes MBAs.
A lot of the good talent facebook, amazon, google, microsoft comes from the military. It's a top-down system where someone on top makes a module and the person below it follows.
3 points.
Public education has done a poor job in teaching the public soft skills.
Universities expect students to be able to read from the text and do it but don't teach them how to.
Professors and lecturers aren't held accountable for anything. Stem course has become so subjective that many don't make sense.
To be honest a lot of universities have become decorative and stem is more window dressing than actual results. It's to the point that bds supporters are promoting a vaccine from Ariel university.
Wondering why Intel not to positioning itself as an IP provider with a roadmap of future hybrid computing platforms. I think it is where Intel and USA's strength. If I were Intel CEO, I should buy Arm and owns dual CISC/RISC and PC/Mobile platforms.
We've all seen this story before. Look for Bob Swan to arrange a golden parachute for himself, allow third point to dismantle the company and collect a bonus for sticking around through the carnage, and then float off into either retirement or politics as a very rich man.
A lot of the good talent facebook, amazon, google, microsoft comes from the military. It's a top-down system where someone on top makes a module and the person below it follows.
3 points.
Public education has done a poor job in teaching the public soft skills.
Universities expect students to be able to read from the text and do it but don't teach them how to.
Professors and lecturers aren't held accountable for anything. Stem course has become so subjective that many don't make sense.
To be honest a lot of universities have become decorative and stem is more window dressing than actual results. It's to the point that bds supporters are promoting a vaccine from Ariel university.
While I don't disagree with your comments about universities focusing on some of the wrong things; I'd imagine the (good) engineers at Intel, AMD, TSMC are likely mainly born of experience and training from other engineers than via their degrees?
Agree with count, the Loeb Letter points to a dismantling of Intel, ending IDM status. Probably a spinoff of MFG and design units, my opinion. It’s not up to Loeb of course, it’s up to the new CEO.
I’m assuming a new CEO.
Agree with count on “carnage”. Intel cost structure was supported by leading technology. In the current state they are in, trailing by 3 nodes, no customers other than internal, I think the manufacturing spin co will need lowest cost operations; UMC or SMIC would be the points of comparison. Humbling.
