Intel Corporation to Participate in Upcoming Investor Conferences

[XYang2023]

They made some changes:

SANTA CLARA, Calif. – Intel Corporation today announced that company executives will participate in the following investor events:

On Dec. 4 at 12:35 p.m. PST, David Zinsner, Intel interim co-chief executive officer, executive vice president and chief financial officer, and Naga Chandrasekaran, executive vice president, chief global operations officer and general manager of Intel Foundry Manufacturing and Supply Chain organization, will participate in a fireside chat on Intel’s business and foundry strategy at the UBS Global Technology Conference.

• On Dec. 12 at 8:40 a.m. PST, Zinsner and Michelle Johnston Holthaus, interim co-chief executive officer and CEO of Intel Products, will participate in a fireside chat on Intel’s business and financial strategy at the Barclays Global Technology Conference.

Live webcasts and replays can be accessed publicly on Intel's Investor Relations website at intc.com.

Intel Corporation to Participate in Upcoming Investor Conferences

www.intc.com

 

[Xebec]

Link to audio link for this webcast (registration required)

UBS Global Technology Conference

www.intc.com

 

[XYang2023]

Currently listening to it, Naga talked about the importance of continuous improvement in manufacturing, extending beyond just technology development. He comes across as quite pragmatic. He also mentioned that 18A is on track and 14A is designed for all applications.

 

[XYang2023]

I like what Naga what was saying, be very prudent over capital spending, demand driven. It is quite different from PG. PG tended to over-spend.

 

[MKWVentures]

On webcast:
Naga and Zinsner we both very pragmatic as expected and seemed to convey a vibe of "we will be more realistic/conservative than Pat"
The only concern I have is when they talk about future cost cutting. Its been almost 4 years.... hopefully they are not finding new items now. they had the list in 2021
Also saying you will be more capital efficient is nice but implementing is hard. Example I like to use "Buy only two dep tools (goal) even though current POR shows you need 4". It is those choices that determine success and have huge risks.

comment "Intel Product group is still intel stock holder and they want to see foundry succeed and will want to keep them loaded." seemed interesting and not so independent

Lets see what margins look like in 2025 and 2026. I wonder what margins are by Product currently? ARL, MTL, LNL, Sierra forest/Granite rapids vs Raptor Lake. Zinsner has those numbers today. Are the i3 i4 margins over 50%? what will 18A Margins be in 2026....

 

[XYang2023]

On webcast:
Naga and Zinsner we both very pragmatic as expected and seemed to convey a vibe of "we will be more realistic/conservative than Pat"
The only concern I have is when they talk about future cost cutting. Its been almost 4 years.... hopefully they are not finding new items now. they had the list in 2021
Also saying you will be more capital efficient is nice but implementing is hard. Example I like to use "Buy only two dep tools (goal) even though current POR shows you need 4". It is those choices that determine success and have huge risks.

comment "Intel Product group is still intel stock holder and they want to see foundry succeed and will want to keep them loaded." seemed interesting and not so independent

Lets see what margins look like in 2025 and 2026. I wonder what margins are by Product currently? ARL, MTL, LNL, Sierra forest/Granite rapids vs Raptor Lake. Zinsner has those numbers today. Are the i3 i4 margins over 50%? what will 18A Margins be in 2026....

They have the visibility for their own products, which are the priority.

 

[MKWVentures]

They have the visibility for their own products, which are the priority.

Is the product margin for Meteor Lake higher or Lower than Raptor Lake?

 

[XYang2023]

Is the product margin for Meteor Lake higher or Lower than Raptor Lake?

Based on their statements, the product margin for Meteor Lake should be higher than that of Raptor Lake, given that EUV is being used. However, I am not sure if that is actually the case.

 

[MKWVentures]

Based on their statements, the product margin for Meteor Lake should be higher than that of Raptor Lake, given that EUV is being used. However, I am not sure if that is actually the case.

exactly. In theory, MTL is supposed to have higher margin (its been running over a year). It's "reality" that always causes issues.

 

[Erik F]

They said the same things Pat said, without the enthusiasm.

 

[VCT]

On webcast:
Naga and Zinsner we both very pragmatic as expected and seemed to convey a vibe of "we will be more realistic/conservative than Pat"
The only concern I have is when they talk about future cost cutting. Its been almost 4 years.... hopefully they are not finding new items now. they had the list in 2021
Also saying you will be more capital efficient is nice but implementing is hard. Example I like to use "Buy only two dep tools (goal) even though current POR shows you need 4". It is those choices that determine success and have huge risks.

comment "Intel Product group is still intel stock holder and they want to see foundry succeed and will want to keep them loaded." seemed interesting and not so independent

Lets see what margins look like in 2025 and 2026. I wonder what margins are by Product currently? ARL, MTL, LNL, Sierra forest/Granite rapids vs Raptor Lake. Zinsner has those numbers today. Are the i3 i4 margins over 50%? what will 18A Margins be in 2026....

The majority of cost reductions should come from yield improvements, not headcount reductions. Without significant external customers, it will be challenging for Intel to enhance its learning curve and yield.

 

[osnium]

Currently listening to it, Naga talked about the importance of continuous improvement in manufacturing, extending beyond just technology development. He comes across as quite pragmatic. He also mentioned that 18A is on track and 14A is designed for all applications.

Does the fact that they mentioned Intel 14A mean that Intel is not going to cancel it and shut down LTD post ramping Intel 18A?

 

[XYang2023]

Does the fact that they mentioned Intel 14A mean that Intel is not going to cancel it and shut down LTD post ramping Intel 18A?

DZ mentioned technology development is the crown jewel for Intel and they are still determining to become a world class foundry. My understanding is they are not going to give away their process leadership.

 

[XYang2023]

The majority of cost reductions should come from yield improvements, not headcount reductions. Without significant external customers, it will be challenging for Intel to enhance its learning curve and yield.

Naga mentioned:
1. Transitioning from the concept of "no wafer left behind" to "no capital left behind."
2. Promoting a culture of continuous improvement in manufacturing, in addition to focusing on technology development.
3. A defect density of 0.4 for 18A was mentioned at a specific point in time. They are still working to reduce it further.

I believe these agendas aim to lower absolute costs and improve ROI.

Here’s my basic understanding of costs:
Cost = Volume × Wafer Cost × (1 - Yield)

Point 1 is related to volume. Point 2 seems to be connected to wafer cost (this is my assumption). Points 2 and 3 seem to address yield.

 

[Brady]

Good Q&A here:

Tim Arcuri

Good. Thank you. So I wanted to ask about progress on AT&A. I know Pat put this, which is now famous D0 number of 0.4 out and I've written a couple of notes on this. Just trying to put into context like what that means. And it depends on the die-size to translate the yield. But can you talk a little bit, B, about where 18A is versus where you think it needs to be to sort of intersect the second half of '25 a ramp. And B, the thing that I hear from some of the customers is that or some of the prospective foundry customers is that 18A is still a bit more geared toward HPC. And as a broad foundry node, the customers that I talk to are sort of like 18A is great if you have an HPC application, 14A might be the node that's more broadly applicable to external foundry customers. Can you talk about that as well?

Naga Chandrasekaran

Yes. So when Pat announced the defect density D0 less than 0.4, it was a point in time and it was to give the indication that we are progressing as expected. If I look at it today, we are progressing. There are several milestones that we have met and there are still many milestones ahead for the technology development. And if I wear my technology development hat for a minute, there's always challenges when you're introducing new technology and there's ups and downs. But what I would say is there's nothing fundamentally challenging on this node.

Now it is about going through the remaining yield challenges, defect density challenges, continuing to improve it, improving process margin and getting it ramped. Will there be challenges? There will be, but I think we are progressing. And next year, as I look at it, primarily the first half will be getting the node into engineering samples into our customers' hands and getting the feedback and starting a ramp in Oregon. And the second half of 2025, our milestone is certifying the node, getting it ramped in Arizona and getting the product on the shelves so that customers can buy it. So that's the milestones and we are working towards meeting all those milestones over the next year. It's very critical for us.

AT&A, to your second part of the question, when we said we are going to be foundry, 10.7 was way past and then Intel 3 also had several decisions already made and even 18-A to some extent decisions were made. So you're absolutely right. There are certain aspects of 18A that's extremely powerful for compute applications, especially the backside power. It's going to be very beneficial for compute applications.

It can benefit mobile depending on how the designs are done, but because the customer engagement is more later, it doesn't address the full TAM. And 18A, our biggest customer for the next two, three years is still Intel products, which goes back to what Dave was saying. The Intel products, we know the demand, we know what needs to happen and our focus is to ramp it and continue to get more customers on 18A. But all this learning is getting implemented into 14A.

So as 14A comes in, there will be a broader market that 14A will address, including compute and mobile and other applications and also how the PDKs are done so that it's not just for with Intel Focus, but it's also focused on the broader ecosystem taking 14A and applying it to their designs.

So it seems Pat bet the company on 18A, but 14A is where Intel Foundry’s war is either won or lost (forever?). Long road ahead, but at least 18A sounds like it’s moving forward fairly expectedly?

 

[MKWVentures]

The majority of cost reductions should come from yield improvements, not headcount reductions. Without significant external customers, it will be challenging for Intel to enhance its learning curve and yield.

Actually yield is not part of the strategic cost improvements planned and reported previously. They are great but good yield is an assumption. the main Cost issue is wafer cost and test cost and that has been shown in the plans. Pat and David have shown plans for cost reduction. Fab efficiency is the Intel's historical issue and that is what is listed in the cost reduction plans.

you are 100% correct on the external customers. The Capex, expense, cost spreadsheets fall apart very quickly without significant external volume.

 

[MKWVentures]

Good Q&A here:



So it seems Pat bet the company on 18A, but 14A is where Intel Foundry’s war is either won or lost (forever?). Long road ahead, but at least 18A sounds like it’s moving forward fairly expectedly?

From what I hear 18A is on track health wise. The challenge for Intel is financing this. Bringing up a new technology in a new fabs with slow growing volume is extremely expensive. If the company is very profitable it can be absorbed. If the company is not profitable, the finances... even with a perfect yielding process that is leading in PPA... become problematic.

 

[Daniel Nenni]

The board was clear that the Intel strategy remains intact (IDM 2.0?) but wants to put emphasis on the foundry side to make sure it is successful. Intel has made a lot of investments and the board wants to see ROI.

"The new Intel CEO will have foundry experience" ...

That limits the field. They will need to hire someone from TSMC . Or maybe someone from GF. Gary Patton already works at Intel or maybe they can lure Dr. Thomas Caulfield over? Tom pivoted GF and is now successful but growth is questionable since there are no leading edge technologies. The downside, Tom is my age (Pat Gelsinger's age), maybe a younger person would be better suited. I don't see anyone from Samsung being qualified.

From what I see today 18A is ready to go and is a great offering for the NOT TSMC HPC business. That said, Intel 14A is critical for the foundry business to continue. Customer expectations must be properly set AND met. If that is the case Intel Foundry will succeed. If not, Intel foundry will flounder and continue to be a money pit.

 

[benb]

No one is really able to address how they realistically bridge the gap. What Marton of Tech Altar calls the valley of death. This is the large negative cash flow that occurs most often with a small startup business after launch, while the market is nascent and consists of early adopters. That is where Intel Foundry is at. The board doesn't like it, and at first it seemed to me, after Anne Kelleher and now Gellsinger were sacked, this reads through to the 18A process being a failure. But as they are saying above there are always issues, and I buy that this is true, because it essentially always is true. So I charitably assume 18A is intact.

But I still don't understand where the money comes from, to keep going. Is the margin on existing Intel products? It feels like there is a hole of $10s of billions hanging over Intel's head that will stop them in their tracks and force bankrupcy or worse.

 

[Xebec]

IMO, Intel has faced this valley at least twice before, though not with compounding errors:

The memory price wars of the early 1980s -- Andy Grove (Pat's mentor) got to see what happened when his competition kept investing while Intel didn't increase investment. They lost the market (though a blessing in disguise in some ways). They recovered by redefining core business as x86 only (with some side efforts) and got serious here.

The Y2K bust cycle of 2001-2003ish, IIRC, Intel opted this time around to continue investing in fabs and chips despite the downturn. It was short term pain but they were able to field better fabs to blunt AMD's competition until they could get an "unbeatable" platform (Centrino and Core). This lesson eventually birthed Tick Tock, which initially resulted in 'time running out for AMD'.

(Arguably,) The 14nm-10nm debacle broke the culture (it was very stressed already), but they did recover for a short period with 12th gen and the "Intel 7" process. This is actually history now (2016-2021). However, this time they followed up with reducing investment initially (the bet on TSMC N3 instead of IDM), and now are trying to correct with internal investment (possibly requiring even more cash than if they just stayed the course). 2 valleys of death back to back..

Intel really needs someone who can focus on engineering and business execution uber alles - IMO building upon Pat's pivot from Swan.