It's very good interview to dig into Pat Gelsinger's thinking about IDM 2.0, Tower Semiconductor acquisition, Intel's problems and solutions, and his view on TSMC.
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"The other thing I’ve said is that, “Hey, I’d like to do a Mobileye-like
spin on our foundry business at some point as well.” I’m going to keep
the structure, as opposed to integrating as much, I’m going to keep it
more separate to enable that, which means I’m going to leverage a lot
more of Tower and the expertise that it builds over time as part of it.
Has he ever publicly stated an intent to structure IFS to spin it out in the future?
On integrating Tower into IFS, or integrating IFS into Tower:
I thought they'd already hired someone to run IFS. How does that work if they now put Tower in charge ? It's almost like trying to figure out what Putin is really trying to achieve sometimes. There's a lot of tactical moves, but is the strategy behind it all coherent and viable ?I'm waiting to hear the same. Will Tower run IFS or will IFS run Tower?
Otellini is an interesting CEO for Intel. IIRC --
He helped convince Apple/Jobs to go to x86 for Macs.. but then gave up a much larger and more important strategic market by not saying yes to making/designing chips for Apple's iPhone.
He made Intel very efficient, and Intel's "tick tock" was very consistently strong underneath of him, and Intel's execution almost finished AMD off. OTOH He did a lot of layoffs which probably started the talent bleed, with impacts being felt for a long time afterward (to today?).
Intel invested in ASML under his watch... but the Mcafee purchase..
I'm assuming Optane / 3D XPoint development started under his watch also - another mixed results item.
I think the problem was more Otellini than Krzanich. MBA's almost always ruin technology companies.
Not convinced that PG is "making all the right decisions" up to this point, he sure was "classy" to point out all his predecessors mistakes in the past decade. The statements he makes seem comical to me. He says he has engineering background - well that isn't a sure success as CEO of Intel is it? The guy is still deeply enamored of becoming CEO of Intel that he continuous to remind everyone of the fact even a year since holding the job. I do think he's making Intel taking on a lot of financial risks and there're problems that can't simply be solved by throwing tons of money at them and setting ridiculous high goals. If he's wrong, this could be the last straw that breaks the camel's back.According to Pat Intel suffered "a decade of bad decisions and poor execution". That takes us back to Brian Krazinech. I would argue that it was more than that, starting with Otellini 2005-2013. The Intel CEOs prior to Otellini were legends in our industry:
Robert N. Noyce
Intel CEO, 1968-1975, Co-founder of Fairchild Semiconductor
Education: Ph.D in physics, Massachusetts Institute of Technology
Gordon E. Moore
Intel CEO, 1975-1987, Co-founder of Fairchild Semiconductor
Education: Ph.D in chemistry and physics, California Institute of Technology
Andrew S. Grove
Intel CEO, 1987-1998, previously worked at Fairchild Semiconductor
Education: Ph.D. in chemical engineering, University of California-Berkeley
Craig R. Barrett
Intel CEO, 1998-2005
Joined Intel in 1974, served as chief operating officer from 1993 to 1997, president from 1997 to 1998; chief executive from 1998 through 2005; and chairman from 2005 until 2009.
Education: Ph.D. in materials science, Stanford University
Then come Ottellini and BK:
Paul S. Otellini
Intel CEO, 2005-2013
Joined the Intel finance department in 1974 . From 1996 to 1998, Otellini served as executive vice president of sales and marketing and from 1994 to 1996 as senior vice president and general manager of sales and marketing.
Education: MBA, University of California-Berkeley, 1974; B.A. in economics, University of San Francisco, 1972
Brian M. Krzanich
Intel CEO 2013-2018
Began his career at Intel in 1982 in New Mexico as a process engineer and has progressed through a series of technical and leadership roles at Intel, most recently serving as the chief operating officer (COO) since January 2012. Prior to becoming COO, he was responsible for Fab/Sort Manufacturing from 2007-2011 and Assembly and Test from 2003 to 2007. From 2001 to 2003, he was responsible for the implementation of the 0.13-micron logic process technology across Intel’s global factory network. Krzanich also held plant and manufacturing manager roles at multiple Intel factories.
Education: BA in Chemistry from San Jose State University.
Bob Swan was CEO from 2018-2021 when Pat Gelsinger took over so that would make it 21 years, but who's counting. If AMD had partnered with TSMC earlier it would be a whole different story, just my opinion of course.
Not convinced that PG is "making all the right decisions" up to this point, he sure was "classy" to point out all his predecessors mistakes in the past decade. The statements he makes seem comical to me. He says he has engineering background - well that isn't a sure success as CEO of Intel is it? The guy is still deeply enamored of becoming CEO of Intel that he continuous to remind everyone of the fact even a year since holding the job. I do think he's making Intel taking on a lot of financial risks and there're problems that can't simply be solved by throwing tons of money at them and setting ridiculous high goals. If he's wrong, this could be the last straw that breaks the camel's back.
Do you like the Tower acquisition?
Maybe. Question is can they successfully integrate this company into Intel. If history is of any indication, Intel hasn't been great with mergers. And I agree with Portland, do they really want to diversify their businesses into defense? AMD has been eating into Intel's pie for the past few years, in addition to the huge loss of Apple as customer. Now Intel is setting their sights into something else and this could be more distractions away from their core business.
Yes, sounds reasonable, but it's not the single viable solution. From software perspective, X86 is a platform, if Intel loss the market share to AMD, or to ARM ecosystem, then Intel would fail. From semi perspective, if Intel were able to catch up the process technology, but what about cost? If it cannot deliver a PPAC advantage over competitors, then the progress could not be fast enough to save Intel from declining.I think Intel wants support from the US government and defense/aerospace chips are a big part of that. So yes not high volumes but margins are good and partnering with the US government is critical for additional CAPEX support.
One note, Intel has fabs all over the world that will not house EUV systems which I think is a big reason (in my opinion) why Intel is going into the foundry business, to reuse their fabs and equipment. Prior to EUV the 300mm fabs were reusable/upgradeable. Sound reasonable?
Don't forget to those Intel Board of Directors and Chairpersons who endorsed many bad decisions and bad strategies in the past.CFOs don't have a good track record either.