Intel shares jump despite massive loss as chipmaker touts ‘solid progress’ cutting costs

[XYang2023]

Intel's Gordon Moore Park campus at Ronler Acres in Hillsboro.Mike Rogoway/The Oregonian

Intel’s stock price was up 9% in late trading Thursday after the company reported third-quarter sales at the high end of its forecast range and touted progress in cutting jobs and expenses. Embattled CEO Pat Gelsinger said Intel is “acting with urgency” to restructure the company and return to profitability...

Intel shares jump despite massive loss as chipmaker touts ‘solid progress’ cutting costs

The company laid off 1,300 Oregon workers earlier this month.

www.oregonlive.com

 

[blueone]

From the 3Q2024 earnings announcement, regarding foundry results:

Intel Foundry Highlights

• Intel’s fifth node in four years, Intel 18A, will complete a historic pace of design and process innovation, returning Intel to process leadership. Intel 18A is healthy and continues to progress well, and the company’s two lead products, Panther Lake for client and Clearwater Forest for servers, have met early Intel 18A milestones ahead of next year's launches.
• 
  
• Intel and Amazon Web Services (AWS) are finalizing a multi-year, multi-billion-dollar commitment to expand the companies' existing partnership to include a new custom Xeon 6 chip for AWS on Intel 3 and a new AI fabric chip for AWS on Intel 18A.
• 
  
• The Biden-Harris Administration announced that Intel was awarded up to $3 billion in direct funding under the CHIPS and Science Act for the Secure Enclave program.
• 
  
• The program is designed to expand the trusted manufacturing of leading-edge semiconductors for the U.S. government and fortify the domestic semiconductor supply chain.
• 
  
• Intel announced its intention to establish Intel Foundry as an independent subsidiary. This structure provides clearer separation for external foundry customers and suppliers between Intel Foundry and Intel Products. It also gives Intel future flexibility to evaluate independent sources of funding and optimize the capital structure of Intel Foundry and Intel Products.

An AI Fabric chip on 18A... so much for my guess that 18A was focused on logic tiles.

Intel's financial results for the quarter were truly depressing. Apparently all of those retirements and layoff announcements we're seeing on LinkedIn cost Intel $2.8B. And a weird $9.9B of "establishment of a valuation allowance against US deferred tax assets".

 

[XYang2023]

I think the important points to note are the revenue improvements across several segments and the reaffirmation of 18A.

Additional points from the earning call:

1. Fitting out the Arizona fab for 18A starting in Q1 2025

2. Over 70% of the silicon in Panther Lake is from Intel fabs

3. Simplifying P-core and E-core developments

4. 2 new 18A customers (for compute, not networking)

 

[XYang2023]

PG mentioned during the Bloomberg Technology Special:

1. 1. Since Gaudi is an accelerator (not a GPU), there are some initial software issues, possibly related to training. However, as the user base grows, these issues are expected to be resolved.
2. 
   
3. 2. Intel's GPU-based AI accelerator is expected to launch next year.
4. 
   
5. 3. He advises audiences not to believe some of the rumors.
6. 
   
7. 4. The CHIPS Act is a bipartisan initiative.
8. 
   
9. 5. He expressed disappointment with the disbursement process of the CHIPS Act. Despite Intel investing $30 billion in alignment with the Act, they have not received any funding, which has impacted Intel's financials for 2024. He suggests that whoever wins the election should work to expedite this process.

 

[hskuo]

Just wondering, if 5N4Y will be complete, where is the new revenue? Will we see a revenue jump in upcoming 1-2Q?

 

[Daniel Nenni]

 

[Daniel Nenni]

Just wondering, if 5N4Y will be complete, where is the new revenue? Will we see a revenue jump in upcoming 1-2Q?

Did Intel produce any chips on Intel 4 or Intel 20? How do you claim 5N4Y when a node isn't used for HVM? Intel 4 and Intel 20 are not even on the Intel site:

Semiconductor Manufacturing Process | Intel 18A, 3, and 16

See how Intel is enabling tomorrow's semiconductor manufacturing process technologies to deliver a systems foundry for the AI era.

www.intel.com

 

[Xebec]

Just wondering, if 5N4Y will be complete, where is the new revenue? Will we see a revenue jump in upcoming 1-2Q?

My understanding is it'll probably be 1H 2026 when we start seeing REAL revenue from Intel Foundry:

- Tower acquisiton didn't pan out, so no 'immediate' revenue for Foundry
- Intel 3 is "get a few customers, learn how to Foundry 2.0" - not enough to move the needle, unless Intel had fantastic marketing and luck
- Intel 18A is the first "real Foundry node" - i.e. prove to the world Intel is back, and can supply leading edge in volume. This will start generating real revenue. This will show some appreciable revenue, but we're still a year away from that, and it won't be large volume until 2026.
- Intel 14A is the first chance they have at grabbing any real Foundry market share - 2027+.

(+ Intel 18A is back to 'major insourcing', which may show as "Foundry" revenue depending on Accounting).

 

[Xebec]

Did Intel produce any chips on Intel 4 or Intel 20? How do you claim 5N4Y when a node isn't used for HVM? Intel 4 and Intel 20 are not even on the Intel site:

Semiconductor Manufacturing Process | Intel 18A, 3, and 16

See how Intel is enabling tomorrow's semiconductor manufacturing process technologies to deliver a systems foundry for the AI era.

www.intel.com

FWIW - Meteor Lake (Mobile) is available in retail volume on Intel 4.

Intel 20A never shipped but they did have/show wafers. (IIRC, Pat held 20A wafers during press conference talks in the past). Not saying this counts as HVM of course, but they did produce some tiny amount of chips internally.

 

[hist78]

Yahoo Finance has an interview with Intel CEO Pat Gelsinger right after the earnings call. Unfortunately, Pat once again lost control of his mouth by first praising TSMC as an awesome partner and then immediately stating that TSMC is not a "Western world" foundry, while Intel is and wants to be a big one.

What exactly is the "Western world" that Pat Gelsinger is talking about? Does he mean that unless a company is owned and operated by people from a country established by the white European settlers, it can't be treated equally or trusted confidently?

If "Western world" means countries aligned with democratic political and free-market economic systems, then South Korea, Japan, and Taiwan (Republic of China) have been part of this "Western world" for a long time. Does Pat Gelsinger know that?

I don’t think Pat is a racist, but he really needs to watch his mouth as the CEO of Intel.

https://finance.yahoo.com/news/intel-ceo-calls-tsmc-an-awesome-company-says-the-company-is-still-waiting-for-chips-act-money-001504215.html?fr=sycsrp_catchall

 

[MKWVentures]

intel foundry wont have any meaningful revenue until 2026. fab52 will not be shipping any revenue wafers until end of 2025.... probably 2026. intel will not be running full loop 18a wafers in arizona in 1h 2025. was 20a delivered or cancelled?

these public statements are becoming more and more erratic

 

[siliconbruh999]

Did Intel produce any chips on Intel 4 or Intel 20? How do you claim 5N4Y when a node isn't used for HVM? Intel 4 and Intel 20 are not even on the Intel site:

Semiconductor Manufacturing Process | Intel 18A, 3, and 16

See how Intel is enabling tomorrow's semiconductor manufacturing process technologies to deliver a systems foundry for the AI era.

www.intel.com

Intel 4 is used in Meteor lake 70mm2 tiles also on Granite Rappids D SOC 20A is not getting counted so 4N4Y
GNR SOC Hot Chips

Intel Xeon 6 SoC for the Edge Hello Granite Rapids-D

In 2025 Intel Xeon D will get HUGE with the Intel Xeon 6 Granite Rapids-D platform. 100GbE, AMX, media encoders, 8-channel memory, and more

www.servethehome.com

 

[hist78]

Did Intel produce any chips on Intel 4 or Intel 20? How do you claim 5N4Y when a node isn't used for HVM? Intel 4 and Intel 20 are not even on the Intel site:

Semiconductor Manufacturing Process | Intel 18A, 3, and 16

See how Intel is enabling tomorrow's semiconductor manufacturing process technologies to deliver a systems foundry for the AI era.

www.intel.com

Contrary to the common belief that Intel employs too many MBAs who steer the company in the wrong direction, I think Intel does not hire enough MBAs or use them appropriately. In today's earnings call, Intel announced a $3.1 billion manufacturing asset impairment charge related to Intel 7 equipment and space that can’t be utilized in the EUV era.

$3.1 billion—gone down the drain!

 

[Fred Chen]

Contrary to the common belief that Intel employs too many MBAs who steer the company in the wrong direction, I think Intel does not hire enough MBAs or use them appropriately. In today's earnings call, Intel announced a $3.1 billion manufacturing asset impairment charge related to Intel 7 equipment and space that can’t be utilized in the EUV era.

$3.1 billion—gone down the drain!

Does this imply Intel 7 won't be used even as one of the future chiplets?

 

[Brady]

Contrary to the common belief that Intel employs too many MBAs who steer the company in the wrong direction, I think Intel does not hire enough MBAs or use them appropriately. In today's earnings call, Intel announced a $3.1 billion manufacturing asset impairment charge related to Intel 7 equipment and space that can’t be utilized in the EUV era.

$3.1 billion—gone down the drain!

This one is brutal. The high everyone was on during the pandemic semiconductor boom was truly legendary.

 

[osnium]

Does this imply Intel 7 won't be used even as one of the future chiplets?

What about the Intel UMC collaboration to develop a 12 nm node? I would imagine the Intel 7 equipment could be used fort.

 

[tedc]

Contrary to the common belief that Intel employs too many MBAs who steer the company in the wrong direction, I think Intel does not hire enough MBAs or use them appropriately. In today's earnings call, Intel announced a $3.1 billion manufacturing asset impairment charge related to Intel 7 equipment and space that can’t be utilized in the EUV era.

$3.1 billion—gone down the drain!

Does this mean Intel 7 is no longer an active process node? If so, why are they deprecating a node? I thought the whole point of becoming a foundry was to stop doing that.

 

[nghanayem]

What about the Intel UMC collaboration to develop a 12 nm node? I would imagine the Intel 7 equipment could be used fort.

Yes, but I think you greatly underappreciate just how much volume Intel runs. For one Intel said they want to convert F42 to 18A, so that equipment is no longer needed. Nor would D1's Intel 7 line serve any use going forward. Israel also runs Intel 7. Techinsights estimates put Intel 7 peak ramp at well over 100k WSPM. That UMC process would also have FAR fewer mask layers than Intel 7. So call it 100k for sake of argument and plet's say you cut out F42/D1. That leaves you with what? Maybe ~40-60k WSPM of Intel 7 (like 70-120k WSPM of UMC12 assuming it is a foundry 14nm class node). To fill that much demand would require emptying out whole TSMC gigafabs worth of 16/12FF.

Granted not all of that Intel 7 will go out of production all at once. But I don't see how Intel could ever fill that amount of Intel 7 or UMC 12. I suspect more technology licensing deals ala UMC or Tower will need to happen longer term for Israel and maybe also in AZ if UMC 12 can't fill up fabs 12, 22, AND 32. That or maybe flexing over some non EUV Intel 3 and beyond tooling into these legacy fabs to relieve capacity constraints in Fabs 42-62, 34-44, and 38-48.

Of course this is all just me playing arm chair QB

Does this imply Intel 7 won't be used even as one of the future chiplets?

If you look at teardowns you would see intel has been using Samsung for chipsets for the past four product generations, MTL/ARL used N6 for the IO extension/PCD die and SOC die, and LNL uses N6 for the PCD. Granted back when these calls were being made Intel was allergic to building new capacity. Even pre pandemic, Intel's 14nm fabs were full; and after the start of the pandemic even the 10nm fabs were overflowing. Demand for CPUs was not being met, and CCG was telling the world that it expected the TAM would grow well north of 300M PCs by 2030. So yeah didn't really make sense to "waste" precious Intel wafer starts on easily outsourced stuff. Doubly so when Intel admits that the cost of an Intel 7 wafer isn't that much lower than the price of a foundry 7nm class wafer (as the margin stacking then breaks down into a non factor).

Either way the consequence of this decision is that without running chipsets on Intel processes, Intel 7 fabs will gradually dry up as Intel 7 CPUs get EOLd and all that remains are finishing up the long term services life contracts on Xeon and Agilix parts.

 

[Xebec]

Yahoo Finance has an interview with Intel CEO Pat Gelsinger right after the earnings call. Unfortunately, Pat once again lost control of his mouth by first praising TSMC as an awesome partner and then immediately stating that TSMC is not a "Western world" foundry, while Intel is and wants to be a big one.

What exactly is the "Western world" that Pat Gelsinger is talking about? Does he mean that unless a company is owned and operated by people from a country established by the white European settlers, it can't be treated equally or trusted confidently?

If "Western world" means countries aligned with democratic political and free-market economic systems, then South Korea, Japan, and Taiwan (Republic of China) have been part of this "Western world" for a long time. Does Pat Gelsinger know that?

I don’t think Pat is a racist, but he really needs to watch his mouth as the CEO of Intel.

https://finance.yahoo.com/news/intel-ceo-calls-tsmc-an-awesome-company-says-the-company-is-still-waiting-for-chips-act-money-001504215.html?fr=sycsrp_catchall

I listened to it, he didn't use the word "world", he said "We want to be a Western foundry at scale".

It's a bit awkward wording but I interpreted it as Western located. Taiwan, despite also being on a globe shaped Earth is "located East". I didn't take away that he disparaged TSMC in any way - he praised them for customer service and starting the foundry model, and more.

 

[hist78]

I listened to it, he didn't use the word "world", he said "We want to be a Western foundry at scale".

It's a bit awkward wording but I interpreted it as Western located. Taiwan, despite also being on a globe shaped Earth is "located East". I didn't take away that he disparaged TSMC in any way - he praised them for customer service and starting the foundry model, and more.

Here is the transcript:

Pat Gelsinger:

"we want to be a western Foundry at scale. And we think that's, that's Important, you know, for the Western world for the industry for Intel and that's the path that we've laid out."