Intel Weighs Options Including Foundry Split to Stem Losses
- Thread starter hist78
- Start date
I dont think Intel has enough money to give TSMC to take either the current fabs nor the empty shells. Also why would TSMC accept the development team, who takes them ?
Az already has demonstrated TSMC is not capable of managing a US factory or non Taiwan / Asian workforce to be competitive.
I don’t think anyone in the world after the AMD/GF adventure and divorce is stupid enough to take Intel fabs at book value even or value their technology prowess.
The only scenario that TSMC takes the Intel fabs would be they fail at I18A and US government intervenes for security sake. But how does this happen with a foreign entity manages a US national technology assert where they themselves are considered a rouge province of a country we are in a technology war ?
The Oregon TD organization is still a unique and strategic asset. They are the only current development org capable of delivering advanced technology and collaterals. I know debatable currently. The manufacturing sites are suboptimal but nothing a 20-30% headcount cut can’t begin to fix. You can’t now do a slow attrition to the end state. You need to reset the headcount, ampute the limb immediately. This will force the competitive structure and keeps only the committed people who now are forced to make the hard and right decisions. The company is already bet as is the next two years of products to I20 and I18A.
All the armchair QBs just pull a seat and let’s watch it play out.
Yes, chicken or egg.
An outsider at the top can reset everything but who has both the capability and credibility? You need a rare unicorn does one exist?
Pat is an insider and a product person, he has little to no real understand of silicon development, ecosystem, fab manufacturing yet he has bet the company on that resurgence. There is nobody on the board that has that either. Lastly there are a few notable outsides with prospective but have their observations and recommendations been heard and acted upon from the BoD down to the working level ?
There was a joke suggestion of Elon should be brought in, beyond his crazy public persona there is some truth to that kind of dam the history clear house and move urgency and no question a lot of urgency is needed in a lot of places.
hist78
Well-known member
"Intel stock rallied 9.5% to close at 22.04, helping lift the Dow Industrial Average."
"Intel is in talks with investment bankers to explore different options for the semiconductor behemoth, Bloomberg reported, citing unnamed sources. The company is also considering scrapping factory projects and M&A deals, the report said. Intel is expected to present the options at a board meeting in September, the report said.
Intel stock rallied 9.5% to close at 22.04, helping lift the Dow Industrial Average. The Santa Clara, Calif.-based company has struggled recently against faster-growing rivals led by Nvidia (NVDA) and AMD (AMD). Intel also has lagged rivals in the hottest trend now sweeping the tech industry, artificial intelligence."
www.investors.com
"Intel is in talks with investment bankers to explore different options for the semiconductor behemoth, Bloomberg reported, citing unnamed sources. The company is also considering scrapping factory projects and M&A deals, the report said. Intel is expected to present the options at a board meeting in September, the report said.
Intel stock rallied 9.5% to close at 22.04, helping lift the Dow Industrial Average. The Santa Clara, Calif.-based company has struggled recently against faster-growing rivals led by Nvidia (NVDA) and AMD (AMD). Intel also has lagged rivals in the hottest trend now sweeping the tech industry, artificial intelligence."
Intel Stock Rallies On Report Chip Giant Is Exploring Foundry Split
Intel stock rallied on a report that the chip giant is considering major changes, including splitting off its manufacturing business.
www.investors.com
hist78
Well-known member
"At this point, Friday's gains look more like a dead cat bounce for the stock than anything fundamentally meaningful. Cleaving the manufacturing business from the rest of the company could be a win for investors as the foundry operations have been a drag on its overall results, but doing so would also undermine Gelsinger's long-term strategy. Such a change might even call for a new CEO.
While the issue is worth watching, and investors should pay attention to any news coming out of next month's board meeting, Friday's jump seems like more of a sign of desperation from investors than a real reason to buy the stock."
finance.yahoo.com
While the issue is worth watching, and investors should pay attention to any news coming out of next month's board meeting, Friday's jump seems like more of a sign of desperation from investors than a real reason to buy the stock."
Intel Stock Is Soaring. Can a Breakup Plan Save the Company?
Investors cheered news that the chip titan is considering strategic options.
delong.height
Active member
but the problem is tsm will have 99.9% of market by 2027, and no real competitor ( samsung cannot be consider any longer)
You could say that TSMC deserves the monopoly for all the hard work and excellent execution they did. ASML has a monopoly and the industry is still ok so why not embrace a TSMC monopoly?
Fabian.
New member
But you can't compare ASML with TSMC in this respect, if ASML doubles its prices, the impact is still small because the money is invested once in these machines, they don't have to be replaced every year. If TSMC were to double its prices, the impact would be completely different.
delong.height
Active member
ASML accounted for a smaller fraction of semiconductor industry, semiconductor equipments. If the market is small, it may be tolerable to have a monopoly. But their client is not consumer. Their customers' customers are still businesses. The effect of monopoly is much smaller, slowed innovation, price hikes, limited price, those do not appear to be possible. Fabless can still innovate on same process node (Look Intel)
TSMC is different, in which any wafer price hikes for their client meant a higher cost of good sold, less gross profit margin overall, those companies will try to be leaner, reduce R&D because there's only one such company in the world with longer cadence for innovation. Also it takes at least 4 year to build new fab. How long does it take to build an EUV? I believe much shorter.
This story tells a lot about semiconductor manufacturing. It's all about cost and trust. Intel as a fabless, they're very big whale. Selling 200M large logic chips(CPU) per year isn't a small deal. Samsung Foundry, who cannot be considered real competitor of TSMC(after 2016), doesn't have a such advantage. Their in-house leading-edge Exynos sells 10~30M per year. But their foundry net loss is much smaller than that of Intel. I think this difference comes from the culture which TSMC mentioned(Something single CEO cannot fix in a year or two). How they've been operating isn't really ready for Foundry business.
delong.height
Active member
because the old process node are still making money. if you look at revenue for all foundries, i remember Samsung is #2. Intel doesn't have old process node, at least not the money making ones.
#1 priority is about being able to deliver -- on schedule without quality or yield issues. (cost is a close #2)
Intel had 2 major quality problems recently with Gen 13/14 CPUs -- Intel 7 process (used to be 10nm). That's not a good look for potential customers.
delong.height
Active member
there's a reason that Intel 7 wasn't open for fabless customer because Intel knows it sucks, yet they still have to use it
delong.height
Active member
gen 13/14 are just the aftermath of reliance on Intel 7
jim_22222
Banned
to deal with TSMC monopoly another option is unleash it's Chinese rivals. client could easily see a 50% drop in cost.
intc is dead already, other wise they might have different opinions.
siliconbruh999
Active member
The issue was insane voltages not Intel 7 the only issue was oxidation issue and they supposedly fixed it I don't know how big oxidation issue was but the CPU problem is due to 1.6-1.7V being requested by cpu even TSMC process will break at that point Intel 7 is just expensive for what it is
delong.height
Active member
that means China will be ahead of US plus its allies. Time to pour more into semiconductor industry
It’s really very simple where Intel is.
As noted by another CCG is a 200Million unit whale as large as Apple’s and bigger than Qualcomm or MediaTek. They need leading edge and beginning next year will have it again. That can/is billions++ quarter of business to some Foundry.
Intel was/is known as a silicon manufacturer and x86, some have forgotten its legacy in memories but was defining there to.
So the decisions is be a product company that is shrinking ? Let’s look at that closely and see the prognosis. We already have seen without a monopoly they have been less than successful maybe I’d call them a failure to leverage anything but the monopoly. Try as they might they simply aren’t competitive in anything outside of x86. Something very wrong in the DNA of that side. Was it decades of only little AMD and process leadership? Clearly AMD figured out how to innovate and beat Chipzilla decades ago with inferior process. The product team has shown no capability to innovate on lagging nor leadership technology, just follow the trend and leverage tech long or power. I am sure Jim Keller had audacious goals and as such was removed. As a product company they missed every big pivot and I expect them to continue to fail here without and outsider and no reason any visionary outsider wants this! Only solution must be on a node ahead of AMD, too expensive outside, let them feed the IFS and be the Apple to IFS.
Manufacturing, I’d argue that they have the core talent and DNA to get back to leaderships and stay there or lead. Remember all recent innovation in logic has come from them including the most audacious pivots in history, mostly, LOL
Their manufacturing was is not bad, not the most cost efficient but in the past did do okay as a high cost leaderships manufacturing in some of the most high cost geos. First thing a 20-30% cut in manufacturing is a must to put them at headcount parity and than the structure could follow. The layoffs are to small across the board, cut and force the organization to adapt is better than the stupid Bain and McKinsey consultants. I’ve seen their results, useless.
Pat has the right top strategy, but sadly he is the wrong CEO. Keep the strategy but lose most BoD and senior leadership. The company has the talent and business model, sadly leadership is busted at the top.
As noted by another CCG is a 200Million unit whale as large as Apple’s and bigger than Qualcomm or MediaTek. They need leading edge and beginning next year will have it again. That can/is billions++ quarter of business to some Foundry.
Intel was/is known as a silicon manufacturer and x86, some have forgotten its legacy in memories but was defining there to.
So the decisions is be a product company that is shrinking ? Let’s look at that closely and see the prognosis. We already have seen without a monopoly they have been less than successful maybe I’d call them a failure to leverage anything but the monopoly. Try as they might they simply aren’t competitive in anything outside of x86. Something very wrong in the DNA of that side. Was it decades of only little AMD and process leadership? Clearly AMD figured out how to innovate and beat Chipzilla decades ago with inferior process. The product team has shown no capability to innovate on lagging nor leadership technology, just follow the trend and leverage tech long or power. I am sure Jim Keller had audacious goals and as such was removed. As a product company they missed every big pivot and I expect them to continue to fail here without and outsider and no reason any visionary outsider wants this! Only solution must be on a node ahead of AMD, too expensive outside, let them feed the IFS and be the Apple to IFS.
Manufacturing, I’d argue that they have the core talent and DNA to get back to leaderships and stay there or lead. Remember all recent innovation in logic has come from them including the most audacious pivots in history, mostly, LOL
Their manufacturing was is not bad, not the most cost efficient but in the past did do okay as a high cost leaderships manufacturing in some of the most high cost geos. First thing a 20-30% cut in manufacturing is a must to put them at headcount parity and than the structure could follow. The layoffs are to small across the board, cut and force the organization to adapt is better than the stupid Bain and McKinsey consultants. I’ve seen their results, useless.
Pat has the right top strategy, but sadly he is the wrong CEO. Keep the strategy but lose most BoD and senior leadership. The company has the talent and business model, sadly leadership is busted at the top.