Some people on Twitter are speculating that Jaguar Shores will be on 18A. Do you think that's possible?
Intel Reports Fourth-Quarter and Full-Year 2024 Financial Results
- Thread starter XYang2023
- Start date
siliconbruh999
Well-known member
Maybe
Panther lake is 70% intel foundry, that's according to Ian Cutress:
siliconbruh999
Well-known member
that is the the SKU wih N3E GPU that is 70% Intel Fabs there are few SKUs with 90% Intel silicon as I said
He said "70%+ silicon area is in-house". He did not say "70%+ silicon area of one SKU is in-house".
The understanding is overall it's 70%
LOL. He should be a politician!
Clever. So if the big huge glue tile is Intel, that counts as 50%. Cute.
siliconbruh999
Well-known member
If they count big tile they would be saying 90% lol
MKWVentures
Moderator
I think she may be more honest than you are giving her credit for.
It doesnt matter what the wafer agreements are. It doesnt matter whether 18A works or not. Intel may be making major changes from what Pat agreed... or they may double down. As of today, Intel does not know for sure what they are going to do. As I have mentioned, the current financial scenarios are imposing constraints that are now taking priority over strategy and technical ability.
Why is outsourcing a good idea? THIS is why you outsource.... to avoid a massive "should we spend 20Billion to ramp a factory no one may want?" question. You can make spreadsheets to show this very clearly.
And if your wish is to be a foundry. perhaps you should become a top 15 external foundry before you say "we are going to be number 2 external foundry with 10+ Billion in revenue". Intel external foundry sales including equipment, masks, and packaging was 385M in 2024 (down significantly from 2023). Intel has less than 0.3% of the wafer sales foundry market.
hist78
Well-known member
During the Q&A session, Intel CFO David Zinsner said:
"Some of the parts have a higher cost, in particular, Lunar Lake has a higher cost, as you know, because it's got the memory and package. And so, we're basically buying that memory and turning around and selling it at the same price. So that's really weighing the margins down on Lunar Lake. So, margins for products are going to be under pressure pretty much throughout this year."
Considering Intel's huge procurement volume, Intel should have some significant cost advantages. Why couldn't Intel claim some additional value for the memory they put in and the performance gains of the Intel advanced packaging? Either David Zinsner oversimplified the issues, or there are some additional truths.
"Some of the parts have a higher cost, in particular, Lunar Lake has a higher cost, as you know, because it's got the memory and package. And so, we're basically buying that memory and turning around and selling it at the same price. So that's really weighing the margins down on Lunar Lake. So, margins for products are going to be under pressure pretty much throughout this year."
Considering Intel's huge procurement volume, Intel should have some significant cost advantages. Why couldn't Intel claim some additional value for the memory they put in and the performance gains of the Intel advanced packaging? Either David Zinsner oversimplified the issues, or there are some additional truths.
Last edited:
I understood that big OEMs get a better price for DIMMs than Intel does, so it's already too expensive without adding another markup on the price
hist78
Well-known member
How can't Intel, the biggest player or one of the biggest players in the PC industry, get the best price? Or at least get some room to add some profit for itself?
Or is Intel's cost structure is too high that those Intel OEM customers don't feel Intel is providing justifiable value from the Lunar Lake's integrated memory?
The volume for Lunar lake is quite small compared to volume of entire laptop range of big OEMs. That's why
hist78
Well-known member
Yes, Lunar Lake volume might not be huge but Intel is still a big company in the PC/IT industry. When we negotiate pricing with big corporations, it's more than often the 800-pound gorilla will ask us to offer the best price among all our customers or at least comparable pricing among our best customers.
If Intel lost this ability to negotiate best price as a big company in the PC industry, then there are more serious issues for Intel to be competitive in this market environment.
That's why I think there are more reasons behind Lunar Lake's depressed pricing.
A product company and the second or third largest foundry if its own products are included. IFS is on par with or slightly behind TSMC in terms of process technology, making it a viable alternative to TSMC.
In the context of global tariffs, IFS could become a competitive advantage vs. its peers.
Last edited:
MKWVentures
Moderator
Not really. Intel product group would not choose to work with Intel foundry if it wasnt Intel. "Internal Foundry" is a rationalization. Intel has been trying to get external companies to use its technologies for 4 years now and there are few takers so far .... We have been through this before. We know how it ends (IBM2.0) Intel hired the managers who finished off the IBM foundry and they have experience with the "we used to be a technology leader and now we want to be a foundry".
I will reiterate: The finances have gotten so problematic, it is not clear how to ramp the technologies even if they were great. It turns out having revenue drop 30% WHILE trying to ramp new factories AND signing co-Investment agreements with aggressive penalty clauses is not that easy. Intel is already paying penalties on the SCIP agreements.
Intel can no longer simply choose a strategy and go.
If it is a finance problem, then I think it is solvable.
Trump orders creation of sovereign wealth fund, says it could buy TikTok
Investors were surprised by the news because the US runs a deficit and doesn’t have the finances needed for such a fund.
DZ already mentioned the foundry business will have its own structure to facilitate external funding.
Also DZ mentioned several times that if Intel products are counted, IFS is already the second largest foundry in the world.
The objective is to make IFS break even and become margin positive over-time. Once IFS breaks even (2027), then the valuation of Intel should be revalued based on market PE of Intel Products.
In addition, I view IFS as a put option whose value is conditioned on how the world is evolved. Trump's tarrifs should be a net positive for IFS as that encourages fabless companies to seriously look in it. This view seemed to be conveyed by DZ during the earning call.
Last edited:
[chuckles]
Yes, I also found this particularly difficult to follow the reasoning on. I also question Intel's math regarding finance with regard to the foundry.
If you are going to invest the equivalent of a US Navy Ford class aircraft carrier, you can't just pretend that the investment doesn't need to be covered by the work the equipment does. I mean, how does that go? Yr1 20bn loss, Yr 2 1Bn profit Yr 3 1Bn profit Yr 4 (upgrade equipment again) 20bn loss? Seems like Intel is having issues creating a sustainable profit model.
This is the legacy of PG. I think the current approach is to untangle the mess he created to recover as much value as possible.
If Global Foundry wants to buy it, it means it has value. Then it is logical for Intel extract as much value from it as possible.
Again the overall goal should be to recover the company's financial status and return to a growth trajectory.
Last edited:
"A product company and the second largest foundry" was the same description used for Intel when they first attempted to offer foundry services, and they failed. It's worth noting that Intel had a superior process and a higher market share at that time.
Now, when considering giving designs to Intel, it's not just about process and price, but also the opportunity cost. Potential customers for 18A and beyond cannot afford any misses, whether in performance, timeline, or volume. Intel has a lot of work to do to earn trust, which is TSMC's strongest advantage.
MKWVentures
Moderator
So what is the market valuation for a capital intensive company with the P&L of IFS. It would seem like the valuation might be similar to what GF "paid" IBM for its foundry.