Russ Fischer of Seeking Alpha fame just posted another article on Intel which, for a change, I agree wholeheartedly with except of course the part where he comments on the fabless semiconductor ecosystem, something he knows nothing about. But other than that it is definitely worth a read because as investments go Intel is certainly in a strong position.
Like me, Russ is a semiconductor professional although he is retired. Unlike me, Russ invests in the stocks he writes about which, in my opinion, is a questionable practice. Yes there is a disclaimer at the end but unfortunately blogs are quoted and cut/pasted all over the internet and the disclaimer does not follow.
According to Russ, we can ignore the non-mobile Intel Custom Foundry business (Altera etc…) as a growth driver which I agree with. Russ does however suggest that Intel could be a player in the mobile foundry business but of course that did not happen at 14nm. Given the problems Intel has had with 14nm yield on internal products it is not surprising the big fabless companies skipped it. You also have to ask yourself: Will one of the big SoC companies hand over designs to one of their fiercest competitors? Intel may not be a competitor for smartphone SoCs but tablets are another story completely (Core M and Cherry Trail). Flooding the SoC channel with 40 million “contra revenue” Bay Trails did not help either (scorched earth).
Russ also states that TSMC 20nm is all Apple with very little or no wafers going to all other customers. This is a complete Fischer Fabrication. CES will be filled with 20nm silicon from both TSMC and Samsung. I also noticed that the 64-bit SoCs being launched at CES this week use ARM Cortex A57/53 cores versus doing their own ARM implementation like Apple. Even the latest QCOM Snapdragon uses ARM versus their in-house Krait core which begs the question: Why?
Here is the funniest part of the article cut and pasted so the humor is not lost:
Intel: 2015 And Beyond:The non-Intel finfet business represented by TSMC and Glo Fo is in a serious state of confusion. The latest news is that Glo Fo will be delayed a couple of quarters on 14nm and that Apple is scurrying to figure out a solution. Glo Fo denies the delay.
Russ is the only one in a serious state of confusion here. This was a “rumor” and not “news” of course and it has since been debunked. Check the comments section of this blog:
I have exactly zero direct knowledge of whether TSMC or Glo Fo will ever deliver finfet-based products in production volumes. I do know that neither company is delivering finfets today. We are down to the “fish or cut bait” time on non-Intel finfets. If TSMC and Glo Fo really can’t get a finfet process working pretty soon, Apple and others (under the new, “All customers for foundry” policy at Intel) will have no choice but to get involved with Intel.
This could be the ultimate solution to the smartphone problem; Intel gets it through the foundry.
Smartphone problem indeed. The funny thing is that when I read his articles they track with what I hear from the Intel PR machine and even the Intel executive staff. Seriously, Russ should come with an “Intel Inside” label. Here are some other famous quotes for perspective:
“Trigate? We are on our second generation, no one has figured that out, they aren’t going to figure that out.” Paul Otellini, Intel CEO, 12/2012
“TSMC’s recent announcement it will serve just one flavor of 20 nm process technology is an admission of failure. The Taiwan fab giant apparently cannot make at its next major node the kind of 3-D transistors needed to mitigate leakage current.” Mark Bohr, Senior Fellow at Intel Corporation, 4/2012
“We’re going to introduce FinFET after the 20-nanometer planar. We’ve been working on FinFET for more than 10 years. We’re quite confident that we will have a robust FinFET technology.” Dr. Morris Chang, TSMC Chairman, 4/2012
To be clear: TSMC, Samsung, and GF are delivering risk production FinFET wafers today with volume production scheduled to start in Q2 2015. Fabless heavyweights Apple and QCOM are driving this effort at all three foundries so I have no doubt it will happen, absolutely.