Just finished "Only the Paranoid Survive", and have a few thoughts about current day Intel

[Xebec]

I finally finished Andy Grove's book "Only the Paranoid Survive". It was enlightening to me when it talked about Intel's culture around constructive criticism and providing forums for challenging ideas. I'm not sure how it was in practice as I never worked there - but some aspects of Intel's culture of the 1990s sounded very refreshing, and explains a lot of their success at the time...

The central theme of the book is about "10X inflection points" which is where market forces change drastically enough that a business needs to address it's core business completely or else suffer great losses. With this in mind, it appears there have been several 10X inflection points that Intel doesn't seem to have properly responded to at all:

- The Rise of Mobility (~2008+), Intel's response was too little too late, and they're still paying for this in terms of limited market TAM, and scale of in-house foundry services.

- "AI" (~ 2022+), Intel's response is confusing at best (multiple semi relevant product lines), and they're not leveraging their software strengths here like they should be. They're not leading anything here.

- The looming end of the cost part of Moore's Law ($/mm2 cost decreases appear to be flattening) - Intel flip flopping on IDM vs outsource is the key point here - IMO they would (have been/) be better off sticking to one or the other. By changing strategies multiple times they're diluting the value of either choice.

- The fading relevance of general purpose CPUs (https://semiwiki.com/artificial-int...-warning-foretold-todays-architectural-pivot/) - Intel gets a partial pass here as they have finalled delved into discrete GPUs, and they appear to be adding accelerators galore to their Xeon chips, but I don't think they're doing nearly enough given how many others are "making" instead of "buying" (Intel).

(I do credit Intel for "dealing" with the end of Dennard scaling though in 2006; Tick Tock, and a focus on perf/watt was a good pivot).

..

I know LBT is focusing on some basics right now - improving fiscal and engineering discipline, and customer management.. but I think it's the next steps (strategically dealing with these inflection points) that are going to make or break Intel. They appear to have a lot more work to do than they will have available workforce..




P.S. None of this was written by AI, all hallucinations, spelling errors, logical fallacies, and grammar failures are mine alone.

 

[XYang2023]

I finally finished Andy Grove's book "Only the Paranoid Survive". It was enlightening to me when it talked about Intel's culture around constructive criticism and providing forums for challenging ideas. I'm not sure how it was in practice as I never worked there - but some aspects of Intel's culture of the 1990s sounded very refreshing, and explains a lot of their success at the time...

The central theme of the book is about "10X inflection points" which is where market forces change drastically enough that a business needs to address it's core business completely or else suffer great losses. With this in mind, it appears there have been several 10X inflection points that Intel doesn't seem to have properly responded to at all:

- The Rise of Mobility (~2008+), Intel's response was too little too late, and they're still paying for this in terms of limited market TAM, and scale of in-house foundry services.

- "AI" (~ 2022+), Intel's response is confusing at best (multiple semi relevant product lines), and they're not leveraging their software strengths here like they should be. They're not leading anything here.

- The looming end of the cost part of Moore's Law ($/mm2 cost decreases appear to be flattening) - Intel flip flopping on IDM vs outsource is the key point here - IMO they would (have been/) be better off sticking to one or the other. By changing strategies multiple times they're diluting the value of either choice.

- The fading relevance of general purpose CPUs (https://semiwiki.com/artificial-int...-warning-foretold-todays-architectural-pivot/) - Intel gets a partial pass here as they have finalled delved into discrete GPUs, and they appear to be adding accelerators galore to their Xeon chips, but I don't think they're doing nearly enough given how many others are "making" instead of "buying" (Intel).

(I do credit Intel for "dealing" with the end of Dennard scaling though in 2006; Tick Tock, and a focus on perf/watt was a good pivot).

..

I know LBT is focusing on some basics right now - improving fiscal and engineering discipline, and customer management.. but I think it's the next steps (strategically dealing with these inflection points) that are going to make or break Intel. They appear to have a lot more work to do than they will have available workforce..




P.S. None of this was written by AI, all hallucinations, spelling errors, logical fallacies, and grammar failures are mine alone.

The strategy is AI which is obvious enough at this point.

 

[benb]

I read it recently too (there's an audiobook). While this book is certainly better than some corporate "How I Did Its" (thinking of Jack Welch's Straight from the Butt), it fails to address the titanic shift that was apparent even in the 90s, which was:
- The Stickiness of Foundry (1990s to present): Intel failed to perceive how Foundry would achieve huge economies of scale which would breach their technology moat eventually. In 2004 when Motorola, once the leading chip maker worldwide, spun out Freescale, and the fab operations continued but scaling development did not, Intel should have known, for certain, that IDM would constrict their options more and more over time. If that wasn't sufficient, then in 2009 when AMD spun out Global Foundries, that should have definitely prompted action. As Foundry gained huge economies of scale, IDM began to lose economies of scale, slowing investment in new fabs, slowing design innovation/new nodes (since both depended on new fabs). This resulted in loss of market share and eventually economic losses. While Intel did nothing, Samsung began foundry operations in 2005. Qualcomm produced their first Snapdragon chip with Samsung in 2007. Intel Custom Foundry (Intel's half-hearted Foundry 1.0) started operation in 2012.
- Intel Converted Apple (2006): This was a huge positive development for them, and may explain why they missed the other things in the 2000s (mobile, Foundry/Fab-Lite, etc).

A few other relevant points of history:
-INTC maximum price: $74.88, August 31, 2000. So Intel has been stuck in a rut for 25 years.
-Only The Paranoid Survive published: 1996. It was 25 years after Intel produced its first microprocessor (4004, in 1971). This was 9 years after the founding of TSMC (1987). TSMC first major customer (Apple) occurred in 2011 though.

 

[KevinK]

- Intel Converted Apple (2006): This was a huge positive development for them, and may explain why they missed the other things in the 2000s (mobile, Foundry/Fab-Lite, etc).

Here's a view of how Intel was thinking about their successes in new markets across three decades. But they missed the next couple of huge market opportunities - Mobile and AI.

 

[tooLongInEDA]

The strategy is AI which is obvious enough at this point.

AI isn't a strategy.

 

[Daniel Nenni]

AI isn't a strategy.

Tell that to the companies that exhibited at the semiconductor conferences I have attended this year. You should have seen DAC last week. It was all AI. My favorite one was the new verification company Bronco AI.

 

[Daniel Nenni]

Exclusive-Intel's top strategy officer to depart this month​

(Reuters) -Intel's top strategy executive, Safroadu Yeboah-Amankwah, is departing the company, the latest change since Lip-Bu Tan took the chipmaker's helm in March, two people familiar with the matter told Reuters.

Intel confirmed the departure, saying, "We are grateful for Saf’s contributions to Intel and wish him the best."

Yeboah-Amankwah, who has served as Intel's chief strategy officer since 2020, is leaving on June 30, said the two people, who spoke on condition of anonymity. Yeboah-Amankwah has overseen growth initiatives, strategic partnerships and equity investments for Intel, among other responsibilities.

Some of Yeboah-Amankwah's strategy functions will now fall to Sachin Katti, whom Intel recently elevated to chief technology and AI officer. Intel Capital, the company's venture arm, is reporting up to Tan, said one of the two people and a third source briefed on the matter.

Tan is a prolific investor and founded San Francisco-based venture capital firm Walden International in 1987.

As Intel's CEO, Tan so far has flattened the semiconductor giant's leadership team and taken direct oversight of its important data center and AI chip group, plus its personal-computer chip group. He has brought in new engineering leaders.

He has also aimed to cut what he viewed as Intel's bloated, slow-moving middle-management layer.

https://www.yahoo.com/finance/news/exclusive-intels-top-strategy-officer-002850856.html

 

[XYang2023]

Exclusive-Intel's top strategy officer to depart this month​

(Reuters) -Intel's top strategy executive, Safroadu Yeboah-Amankwah, is departing the company, the latest change since Lip-Bu Tan took the chipmaker's helm in March, two people familiar with the matter told Reuters.

Intel confirmed the departure, saying, "We are grateful for Saf’s contributions to Intel and wish him the best."

Yeboah-Amankwah, who has served as Intel's chief strategy officer since 2020, is leaving on June 30, said the two people, who spoke on condition of anonymity. Yeboah-Amankwah has overseen growth initiatives, strategic partnerships and equity investments for Intel, among other responsibilities.

Some of Yeboah-Amankwah's strategy functions will now fall to Sachin Katti, whom Intel recently elevated to chief technology and AI officer. Intel Capital, the company's venture arm, is reporting up to Tan, said one of the two people and a third source briefed on the matter.

Tan is a prolific investor and founded San Francisco-based venture capital firm Walden International in 1987.

As Intel's CEO, Tan so far has flattened the semiconductor giant's leadership team and taken direct oversight of its important data center and AI chip group, plus its personal-computer chip group. He has brought in new engineering leaders.

He has also aimed to cut what he viewed as Intel's bloated, slow-moving middle-management layer.

https://www.yahoo.com/finance/news/exclusive-intels-top-strategy-officer-002850856.html

I have been thinking awhile that Safroadu should leave Intel. He was from Mckenzie. Intel sent him to one of the investor conferences last year (I think it was around Computex time). I was thinking why Intel needed him. My understanding is that the CEO should know and follow the strategy.

 

[XYang2023]

Who came up the IDM 2.0 strategy? Also building fabs all over the world.

Featured speaker at Mizuho Technology Conference: Saf Yeboah-Amankwah, Senior Vice President and Chief Strategy Officer at Intel | Mizuho Insights

On June 12, 2024, Saf Yeboah-Amankwah, Intel’s Senior Vice President and Chief Strategy Officer sat down for a fireside chat at the Mizuho Technology Conference with our Senior Analyst Vijay Rakesh, to discuss technological shifts, Intel’s strategy reboot and its plans to retain its competitive...

www.mizuhogroup.com

 

[XYang2023]

"Yeboah-Amankwah joins Intel from McKinsey & Company, where he was most recently a senior partner and global head of the Transformation Practice for the Telecom, Media and Technology (TMT) practice, based in Washington, D.C. He is also the global lead of Client Capabilities for the TMT practice. Previously he served as managing partner for South Africa and head of McKinsey’s TMT and Digital practice for Africa, among other roles."

Intel Appoints Saf Yeboah-Amankwah as Senior Vice President and Chief Strategy Officer

www.intc.com

 

[osnium]

Who came up the IDM 2.0 strategy? Also building fabs all over the world.

Featured speaker at Mizuho Technology Conference: Saf Yeboah-Amankwah, Senior Vice President and Chief Strategy Officer at Intel | Mizuho Insights

On June 12, 2024, Saf Yeboah-Amankwah, Intel’s Senior Vice President and Chief Strategy Officer sat down for a fireside chat at the Mizuho Technology Conference with our Senior Analyst Vijay Rakesh, to discuss technological shifts, Intel’s strategy reboot and its plans to retain its competitive...

www.mizuhogroup.com

I think that was Pat Gelsinger himself.

 

[Xebec]

- The Stickiness of Foundry (1990s to present): Intel failed to perceive how Foundry would achieve huge economies of scale which would breach their technology moat eventually.2011 though.

Intel actually did recognize this trend, but took very little action/the wrong actions to support it, and then literally everything went wrong:

This chart was made by Intel in 2010 or early 2011, right before (or as) Mobility was really starting to take off, before the serious GPU mining booms (there were a few smaller scale ones before this), and before AI. Intel also failed to read into this that as other fab makers "fell off the leading edge train" (i.e. AMD/GloFo at 14nm) that TSMC had a chance to clean up*. Intel failed to capitalize on all three trends.

And then product revenue starvation also happened: AMD became resurgent 5 years later, Hyperscalar cloud providers started building their own chips, and the nature of data centers continued shifting more into the "GPU" space.

It was literally a perfect storm (miss new markets + lose ground in established markets), with a lot of the damage being caused by Intel itself.

(Some further discussion on this topic - https://semiwiki.com/forum/threads/...upport-one-leading-edge-fab.20992/#post-74540 )

*I don't think TSMC was "unbeatable" as a foundry until roughly 2020 / 5nm. Intel had plenty of time to react starting in 2011..

 

[DanX]

There is a so-called anchor theory, also known as the big tree theory, in corporate governance. The larger the company expands, the deeper the roots it needs.
In the past, Intel was a foundry in disguise as a CPU maker.
Intel's roots have currently been replaced by TSMC. The new roots have not yet been confirmed. Perhaps Intel can become an excellent design house, as it has experiential advantages in dynamic logic and other areas.
I'm surprised by the entire industry's neglect of dynamic logic.

 

[hist78]

Intel actually did recognize this trend, but took very little action/the wrong actions to support it, and then literally everything went wrong:

View attachment 3320

This chart was made by Intel in 2010 or early 2011, right before (or as) Mobility was really starting to take off, before the serious GPU mining booms (there were a few smaller scale ones before this), and before AI. Intel also failed to read into this that as other fab makers "fell off the leading edge train" (i.e. AMD/GloFo at 14nm) that TSMC had a chance to clean up*. Intel failed to capitalize on all three trends.

And then product revenue starvation also happened: AMD became resurgent 5 years later, Hyperscalar cloud providers started building their own chips, and the nature of data centers continued shifting more into the "GPU" space.

It was literally a perfect storm (miss new markets + lose ground in established markets), with a lot of the damage being caused by Intel itself.

(Some further discussion on this topic - https://semiwiki.com/forum/threads/...upport-one-leading-edge-fab.20992/#post-74540 )

*I don't think TSMC was "unbeatable" as a foundry until roughly 2020 / 5nm. Intel had plenty of time to react starting in 2011..

Do you think Intel got itself into so much trouble today because of too much paranoia or too little?

In my opinion, it was too much paranoia. It caused Intel to walk away from many golden opportunities that ended up benefiting other companies and the entire semiconductor industry greatly.

 

[DanX]

Do you think Intel got itself into so much trouble today because of too much paranoia or too little?

In my opinion, it was too much paranoia. It caused Intel to walk away from many golden opportunities that ended up benefiting other companies and the entire semiconductor industry greatly.

too little.
If Intel were truly in paranoia, they should invest in their core and maintain a lead, rather than gamble in other areas hoping for a miracle.
GPUs and mobile are not their core competencies. If Intel could maintain a lead over TSMC, their valuation would be higher than TSMC's.

What is paranoia? It's the pursuit of absolute dominance even when there is no threat from others.
Paranoia is hard. Pretending to be paranoid is easy.

 

[Xebec]

Do you think Intel got itself into so much trouble today because of too much paranoia or too little?

In my opinion, it was too much paranoia. It caused Intel to walk away from many golden opportunities that ended up benefiting other companies and the entire semiconductor industry greatly.

+1 to DanX above; I'm also very much in the 'too little' camp. In fact, they were the opposite of too paranoid -- they were too complacent during this period.

The word paranoid can sometimes mean "cautious", but Andy Grove's version definitely did not mean that. He (and Moore and friends) bet the company on the Microprocessor in ~ 1984-1987 as they wound down their memory business, which until then had been the cash cow of the company.

If they were "Grove paranoid", they would have ensured destruction of their competitors when they had the capabilities. (think Operation Crush vs. Motorola - Intel could have stopped Zen and Epyc in it's tracks if they were executing properly in the 2016-2020 time range).

 

[benb]

"Semiconductor revenue required to support one leading edge fab" is a fabulous metric, comparing Intel (with tons of revenue in 2011, far from the line drawn on the chart which shows the rightward movement of minimum revenue required from 2011 to 2015, projected). So they had a cushion, but they didn't invest it (paranoid style) in increasing their technology lead. Instead, as we know, they bought stock and paid dividends and tried to boost the stock price artificially. So that puts me in the "not paranoid enough" camp.

I think 18A may eventually be technically better but not commercially impactful enough to sustain Intel. Intel needs to reduce their leading-edge cost per wafer, to compete.

On the horizon there are players with a radically lower cost per wafer, because they can get most of the inputs, the land, the steel and concrete, the electricity, water and some equipment, at cost, from state-owned enterprises, a disruptive competitive advantage. Only the paranoid survive may be true, but cost disruption may trump it.