The Intel analyst meeting last week reads like an absolute train wreck with INTC stock dropping 5%+ the very next day. Since I work in the fabless semiconductor ecosystem during the day I was not able to listen to it live like the other pundits. Nor am I as easily fooled by Power Point slides. I did however review the materials and would like to comment on current Intel CEO Brian K’s coming legacy. One thing I can tell you is that it will not be “Speak softly and carry a big stick” because Brian is speaking very loudly and carrying a very small stick by comparison. My bet is that Brian’s legacy will also be the shortest Intel CEO legacy thus far, absolutely.
“We seemed to have lost our way,” Andy Bryant, Intel chairman of the board said.
“We were in denial on tablets. It put us in a hole and we had to catch up.”
Brian M. Krzanich
EDUCATION: B.A. San Jose State University
Paul S. Otellini
EDUCATION: MBA, University of California-Berkeley
Craig R. Barrett
EDUCATION: Ph.D., Stanford University,
Andrew S. Grove
EDUCATION: Ph.D., University of California-Berkeley
Gordon E. Moore
EDUCATION: Ph.D., California Institute of Technology
Robert N. Noyce
EDUCATION: Ph.D., Massachusetts Institute of Technology
First I would like you to remember the 14nm fiasco. I wrote on August 1[SUP]st[/SUP] of this year Intel 14nm would be delayed. I put a question mark in the title so I would not get sued even though I knew it was true. 14nm process move-in had been delayed and Intel was not truthful about it. On August 24[SUP]th[/SUP] Paul McLellan attended the SEMI Silicon Valley luncheon and wrote “Intel 14nm really is delayed” as it was discussed openly. Unfortunately Brian K continued the ruse at the Intel Developers Forum a month later looking us in the eye and saying 14nm was NOT delayed. He even showed a 14nm based laptop which we were not allowed to touch. On the quarterly conference call a month later Brian finally fessed up to the delay. Paul wrote about it in “Yes Intel 14nm really is delayed and they lost $600M on Mobile”. So either Brian did not know 14nm had been delayed or he was not honest about it, I’m not sure which is worse for a CEO with 30+ years of manufacturing experience.
Second let me weigh in on the Intel as a foundry proposition. I had serious doubts when Samsung announced that they were entering the foundry business 6+ years ago. Being a foundry is very customer centric and that was not Samsung but they lucked out getting Apple. Apple first used the ASIC model and relied on Samsung for everything after the initial design. Apple has since become one of the largest fabless semiconductor companies and has the ability to manufacture wherever they choose (for 20nm Apple has moved to TSMC).
Samsung started the foundry business at 90nm then 65nm, 45nm, 32nm, 28nm, 20nm with very little customer traction other than Apple. But during that time Samsung learned the foundry business, developed a design enablement ecosystem second only to TSMC, allowed customers into the process development cycle, and at 14nm Samsung will become the number two foundry in the world, absolutely.
So why does anybody think that Intel can do it any faster than Samsung? Personally I don’t think Brian K. has the cahonas to make it in the foundry business. This is an absolute cut throat industry with no customer loyalty whatsoever. It is all about collaboration, price, and technology on each and every node and only being good at one out of three will not make it.
The top fabless semiconductor companies are currently straddling TSMC and Samsung at 14nm to get the best pricing and delivery. 10nm collaboration is already underway and let me tell you it is VERY intimate and there will be NO process secrets left unexposed. So you have to ask yourself: Does Intel really want to be the third big dog eating out of the same bowl?
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