Intel Bay Trail Fail II

To follow up my Bay Trail Fail blog which predicted that the leading edge Intel 22nm mobile SoC offering would fail, I must admit I was wrong. I did not think Bay Trail would see any traction in the tablet market but, as it turns out, Intel will ship 40M of those parts in 2014. Did you notice I said ship and not sell? Read on………

During the Intel analyst day presentations last week I learned that Intel would GIVE AWAY 40 million Bay Trail SoCs to get traction in the tablet market even though BrianK told us before that Intel would SELL the 40 million parts. Intel called this “Contra Revenue” which is a more pleasant term for a massive $1B+ write-off coming their way. In documenting BrianK’s CEO legacy this definitely goes into the loss column, absolutely. Telling investors they would sell 40 million parts and ending up giving them away? Donald Trump would have “You’re Fired” him on the spot!

In regards to market strategy however, this is a brilliant move. Intel’s idle fabs cost millions of dollars per hour so you might as well make silicon and continue the learning process. If you include Intel’s new fabs, current fab utilization is less than 50%. So let’s make some chips! Who’s going to take free SoCs from Intel? Just about everyone, except Apple I would guess, in hopes that at some point in time Intel will get it right and be a force in the mobile SoC market. Contrary to what I write, even I am rooting for Intel on this one, absolutely. Intel.com is the number one domain that hits SemiWiki so I know they are reading what I have to say, constructive witticism is what it really is.

The other shocking news out of the analyst meeting is that Intel will be releasing a low-end SoC with 3G baseband late in 2014 known as SoFIA. This SoC will integrate the company’s low-end 3G modem with an Atom core and manufacture it using TSMC’s 28nm HPM process. Unfortunately for Intel investors this could be another 40M part giveaway.

Next year QCOM’s low-end Snapdragons, also using TSMC 28nm, will feature integrated Wi-Fi, Bluetooth, GPS, and other cool features. Mediatek is already there (with integrated 3G) and dominating China with it. You can bet that QCOM and MediaTek also have a bit more experience working with TSMC 28nm. Intel will try again in 2015 with a new LTE version of SoFIA… blah blah blah… The future always looks bright at Intel.

It was interesting to see Intel stock rise immediately after analyst day then drop almost 2x the next day. I have no clue as to what INTC will do next but I can assure you it will be interesting to watch!

Wait, did you get that? Intel is using TSMC for low cost SoC manufacturing. Alrighty then……..

Let me be the first to start the “Intel is going fabless rumor”. I predict Intel will split design and manufacturing financially taking the design side to the highest levels of profitability while allowing the manufacturing side to better compete in the foundry business. Hey, after that crazy analyst day anything could happen, believe it.

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