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The Final Nail in Intel’s Coffin?

hist78 said:
Considering the revenue, profit, and technology strength, Intel is a product company, not a service company. Intel needs a lot innovative and attractive products to justify its value. IMO, building Intel Foundry Service is putting Intel's precious time, money, and management attention on the wrong place. There are many companies who own no fab but doing very well with their unique product offerings. Most of them are competing directly against Intel.

Pat Gelsinger became Intel's CEO on February 15, 2021. Here I compare the market caps between February 16 or 17, 2021 and May 29, 2024 among several key semiconductor players.

View attachment 1965
Click to expand...
Fabless really has its benefits.
 
hist78 said:
Considering the revenue, profit, and technology strength, Intel is a product company, not a service company. Intel needs a lot innovative and attractive products to justify its value. IMO, building Intel Foundry Service is putting Intel's precious time, money, and management attention on the wrong place. There are many companies who own no fab but doing very well with their unique product offerings. Most of them are competing directly against Intel.

Pat Gelsinger became Intel's CEO on February 15, 2021. Here I compare the market caps between February 16 or 17, 2021 and May 29, 2024 among several key semiconductor players.

View attachment 1966
Click to expand...
Do you think Intel should have just shut down the fabs and focused on product design?
 
osnium said:
Do you think Intel should have just shut down the fabs and focused on product design?
Click to expand...
I don't. Intel is one of perhaps four companies on the planet who can build and operate leading edge fabs. I can't think of one Intel chip product that is best in class. Due to the likelihood that Intel x86 CPU revenue will get reduced by internal designs at the big cloud companies, China being restricted from US technology for the foreseeable future, continued AMD innovation that exceeds Intel's, and Microsoft supporting Arm-based solutions for Windows, Intel CPU revenue is unlikely to grow. Intel does not seem to have an Arm-based strategy, a RISC-V strategy, or a strategy to develop a new ground-up CPU architecture. Intel's best future, IMO, is to compete with TSMC and Samsung in fabrication. Unlike many others here, I think IFS is Intel's best long-term future plan.
 
osnium said:
Do you think Intel should have just shut down the fabs and focused on product design?
Click to expand...

Intel doesn't need to shut down its manufacturing division. Intel just needs to split itself into two truly independent companies with one in product design (a fabless) and the other one in manufacturing (a foundry). This is the best chance to allow one of them or both of them to flourish or survive. To force both of them to stay under the same roof in one company may end up killing both of them.

A right business model decides a business' eventual outcome. We can blame a lot of Intel's problems to some bad decisions Intel made and some bad CEOs Intel hired. But fundamentally it's the wrong business model that lead to those wrong decisions and selecting those wrong Intel CEOs.
 
Last edited:
There was a great presentation by Intel yesterday at investor conference. Many of the comments made are spot on.
1) Michelle would ALWAYS want to use TSMC for some products. options and competition are good. (IMO we will see why before the end of 2024, maybe next week)
2) Intel Fabs in the past were focused on fast transition to new technology and having extra capacity for growth. That was great for its leading products but is not cost effective (he was spot on.... I can give specific examples)
3) Intel needs to transition and ramp and add customers before becoming a profitable manufacturing company.

So the question is whether Intel can be a leader in technology and cost effective at manufacturing and foundry. There is a backup plan if it doesn't work out.... but it is not pretty.

The other question is "what is the competitive advantage of having internal fabs vs strong partnerships with suppliers?" Intel made a decision circa 2020.... and then made a new decision in 2021. Someday we will find which was the correct decision
 
MKWVentures said:
There was a great presentation by Intel yesterday at investor conference. Many of the comments made are spot on.
1) Michelle would ALWAYS want to use TSMC for some products. options and competition are good. (IMO we will see why before the end of 2024, maybe next week)
2) Intel Fabs in the past were focused on fast transition to new technology and having extra capacity for growth. That was great for its leading products but is not cost effective (he was spot on.... I can give specific examples)
3) Intel needs to transition and ramp and add customers before becoming a profitable manufacturing company.

So the question is whether Intel can be a leader in technology and cost effective at manufacturing and foundry. There is a backup plan if it doesn't work out.... but it is not pretty.

The other question is "what is the competitive advantage of having internal fabs vs strong partnerships with suppliers?" Intel made a decision circa 2020.... and then made a new decision in 2021. Someday we will find which was the correct decision
Click to expand...

Any links? Thanks.
 
MKWVentures said:
There was a great presentation by Intel yesterday at investor conference. Many of the comments made are spot on.
1) Michelle would ALWAYS want to use TSMC for some products. options and competition are good. (IMO we will see why before the end of 2024, maybe next week)
2) Intel Fabs in the past were focused on fast transition to new technology and having extra capacity for growth. That was great for its leading products but is not cost effective (he was spot on.... I can give specific examples)
3) Intel needs to transition and ramp and add customers before becoming a profitable manufacturing company.

So the question is whether Intel can be a leader in technology and cost effective at manufacturing and foundry. There is a backup plan if it doesn't work out.... but it is not pretty.

The other question is "what is the competitive advantage of having internal fabs vs strong partnerships with suppliers?" Intel made a decision circa 2020.... and then made a new decision in 2021. Someday we will find which was the correct decision
Click to expand...
What's the backup plan?
 
hist78 said:
Considering the revenue, profit, and technology strength, Intel is a product company, not a service company. Intel needs a lot innovative and attractive products to justify its value. IMO, building Intel Foundry Service is putting Intel's precious time, money, and management attention on the wrong place. There are many companies who own no fab but doing very well with their unique product offerings. Most of them are competing directly against Intel.

Pat Gelsinger became Intel's CEO on February 15, 2021. Here I compare the market caps between February 16 or 17, 2021 and May 29, 2024 among several key semiconductor players.

View attachment 1966
Click to expand...

Further, is Compound Annual Growth Rate (CAGR) for 1, 2, 3, 5,and 10 years.

CAGR.jpg


At 20 years, TSM CAGR is 16.2%, and INTC is 0.4%.
 
MKWVentures said:
1) Michelle would ALWAYS want to use TSMC for some products. options and competition are good. (IMO we will see why before the end of 2024, maybe next week)
Click to expand...
This is no surprise. Intel has been using TSMC for networking chips (for example, there are others) for over 15 years. Network adapters (NICs) are priced low enough that it's difficult to justify the numerous IP ports to Intel's process, and they are already done and tested for TSMC.
 
Lots of interesting stuff in Goldman Sachs discussion:

“We now have 6 Intel 18A external foundry customers. We've got a lifetime deal value of greater than $15 billion.“

”2/3 of the PCs shipped next year won’t be AI PCs” - Reminder - all Apple and Qualcomm-based PCs will be AI-PCs

“Graviton and other Cloud hyperscalers chips are used for internal workloads, but x86 is a lock-in for external workloads”
 
KevinK said:
Lots of interesting stuff in Goldman Sachs discussion:

“We now have 6 Intel 18A external foundry customers. We've got a lifetime deal value of greater than $15 billion.“
Click to expand...

Given the first announced foundry customer deal was Microsoft, worth $15B, the other 5 customers must be worth $0 ?
 
fansink said:
Given the first announced foundry customer deal was Microsoft, worth $15B, the other 5 customers must be worth $0 ?
Click to expand...
The Microsoft deal is definitely not 15B .... no volume or time was announced. In fact last I heard it wasnt even clear what chip would use Intel.
 
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MKWVentures said:
The Microsoft deal is definitely not 15B .... no volume or time was announced. In fact last I heard it wasnt even clear what chip would use Intel.
Click to expand...

I'm not saying the Microsoft $15B deal is real, I'm saying that's what Pat said on Feb 21, '24, during Intel Foundry Direct Connect

It's likely a MOU at best
 
blueone said:
This is no surprise. Intel has been using TSMC for networking chips (for example, there are others) for over 15 years. Network adapters (NICs) are priced low enough that it's difficult to justify the numerous IP ports to Intel's process, and they are already done and tested for TSMC.
Click to expand...
I believe its a pretty big surprise to some people. TSMC sales to Intel in 2025 will be 10X higher than a couple years ago. Most leading edge Processor silicon will be from TSMC in 2025 (I call leading edge below Intel 7, Sorry Dan :ROFLMAO: ). Intel's most competitive PC processors in 2025 may be 100% TSMC. The GM for CCG wants to use TSMC for some tiles long term even when Intel releases 18A, 14A.

Once Intel starts to ramp 18A significantly (2026) we will get a sense of how Intel sales to other companies compare to Intel purchases from TSMC.

This is all good for Intel product group. They have the options and flexibility they need to release multiple products. I think that by the end of 2024, we will see WHY TSMC was a positive gamechanger for Intel
 
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