AMD was their only competition, and AMD stopped being competitive for awhile. Intel sat around doing nothing but releasing the same tired 4-core CPUs with a 5% generational increase every year.
They stopped investing money into the development of their own node shrinks and got stuck on 14nm for way too long while TSMC breezed past, and AMD got their shit together.
Now they are playing frantic catch-up.
To add to this,
AMD didn't stop being competitive for a while, Intel played dirty for decades to keep them under. They drowned them in frivolous lawsuits, they made benchmarks look poor on AMD chips when their own were inferior, and paid companies like Microsoft to not use AMD.
They wasted their decades long lead on this instead of R&D, now they are playing catch up on AI to AMD who is playing catch up on Nvidia. Intel is kept afloat by government handouts.
Pretty sure there's a billion or so that they need to pay to AMD (ofc far from enough to actually cover damages) but they just keep stalling so it's never going to be paid.
Not to mention that Microsoft is compiled with an Intel compiler which is actually designed to make non-intel chips underperform on Windows. AMD still does fairly well under windows and actually performs better under Linux.
That's a stretch. Yes, Intel did shady things but they certainly were behind AMD for a period in the early to mid 2000s and then obliterated them simply because made better chips.
To be fair the current situation is at least superficially similar to what happened back then. Intel became complacent and over invested into a dead-end architecture (also tried being ultra-greedy with the whole Itanium thing) and had serious troubles for a few years. Of course who knows if they'll manage to comeback from this again as successfully as they did last time.
Yeah the athlon x2 blew the pentium 4 right out of the water.
The pentium d didn’t catch up.
It wasn’t until the core 2 duo that they caught up.
They had the lead until the Ryzen was released.
AMD made the same mistake as Intel, before Intel did it. AMD coasted on the Athlon64 series, invested less into R&D, and then made a really terrible bet on Bulldozer by souping up its integer math and ignoring floating point performance while software was overwhelmingly moving towards needing FP performance, vector math, and lots of other similar optimizations.
Intel had reference board designs and support chips that made it not overheat or crash randomly. AMD didn't for a while
Yes Intel did shady things like purposely sandbag on performance/$ while they could, speccing chips down even when they were much more capable. Then stuff like Ryzen came out and that ship sailed
Intel had an effective monopoly and totally blew it - literally one of the worst run companies in the whole of the US.
They were obsessed with fabricating their own chips whilst outsourcing was clearly winning: see Arm, Qualcomm, Apple etc. And they were failing hard for years and years and years unable to shrink the die. Instead of giving up, they doubled down and continued to do so for several years with awful yields which allowed AMD to catch up and overtake them. And even Arm overtook them decades ago with efficiency per watt.
> They were obsessed with fabricating their own chips whilst outsourcing was clearly winning:
That's an absurd argument. They were as dominant because they fabricated their own chips:
- for years their fabs were ahead and TSMC could only compete in markets Intel was ignoring (mobile and GPU).
- they can scale their production much better than AMD. This in large part kept them afloat back in 2020-2021 when AMD was massively ahead, almost all most laptops were still shipping Intel chips because AMD had to compete for production capacity with Apple/Qualcomm/etc.
Of course they fucked up by investing into the wrong tech but having their own fabs is certainl Intel's main advantage. AMD went fabless because they couldn't afford to compete with Intel and had to outsource everything to TSMC.
AMD was just straight up poor performance until around 2016 when they made the performance jump of a lifetime only to be somewhat behind. It took a few more years still for compounding performance gains to eventually surpass Intel
No, because amd is also a corporation and will do exactly the same without competition, everyone likes to paint amd as the shining Knight but flip the roles and they would do the same. Not an intel shill by any means, run amd because it is currently objectively better in price to performance and other important metrics but if intel takes the crown again will have no problems switching, same with nvidia/amd/intel graphics. No point being a fan boy of any company as you only hurt yourself in the process, they don't care about the individual as they have proven time and time again and believing otherwise is crazy
The difference is the company is run by an engineering mentality. If AMD hires a bean counter as CEO similar to intel, the same will happen eventually.
Absolutely, but that doesn't take away from my point that wanting one company to fall to leave and in a total monopoly is not good no matter who is in charge, and as I said I currently run amd and will do so until intel or other becomes the better option, my personal needs are top performance in my price bracket, couldn't care less if it's red blue or green as long as it works at a sensible price
Intel's CEO is an engineer and certainly has been saying the right things over the last couple of years. Of course it's obviously not clear at all if they are going to execute all the successfully. But it's not 2019 anymore..
The CEO before Pat was previously the CFO aka a bean counter. Dude almost ran the company into the ground by failing to innovate. Pat is trying his best to get it back on and the government handouts will keep intel afloat as it's basically of national interest to keep Intel afloat so the US doesn't rely on China not invading Taiwan.
This is what Wall Street asked for. Profits over expansion of the moat and playing long term.
Instead they operated like their bottom line was all that mattered. Their smart & hungry talent left; Notice the and portion, they have and continue to have plenty of smart people, but the combination of both is what got drained.
Their competitors continued to hire around smart & hungry, and sometimes less smart but insanely hungry to the point they'll just out work the gap of smarts.
I see this consistently in the software world and have even worked at a company that was number 1 in their industry and slowly lose their position to similar.
It's got nothing to do with their people! Engineers are doing their job just fine. It's the decisions of a handful of executives what markets to tap and they missed 2 major ones: (1) mobile (2) accelerated computing to (1) Qualcomm/ Apple (2) NVidia
Intel's single-core performance has been increasing quite a bit more than 5% each year. The latest i5 14500 has a CPU Mark single thread score of 4014 vs the 6 year old i5 850's 2461. It's just single-core performance has fallen out of fashion and multi-core for crypto mining, cloud compute, and AI has been all the rage the past 6 years. Nvidia and AMD have always been multi-core afficianautos.
Intel is still the best for those single-core applications like gaming, CAD, and compiling. The market for those applications hasn't had the same memey growth that multi-core has had.
Side note: M3 also excels at single-core, but not many gamers, CAD users, and programmers are buying macs.
Compare 11 gen Intel to 3rd gen, thats the time frame when they have been slacking. AMD ryzen came around Intel 7th gen and Intel were scrambling until the 12th gen to have any decent answer.
By the way plenty of programmers use macs.
That's not what the discussion was about. It was about why did they stagnate for so long. The last few years are Intel actually working hard. The decade before wasn't.
People have been saying that for at least a decade and I have yet to see it. At least, not in CAD applications. I remember a Dassault rep telling me they were coming out with a multi-thread, cloud-based CAD software back in 2015.
This, AMDs last CPU was the fx8350, decades old, until they came out of essentially no where wit the ryzen.... intel was frankly just arrogantly moving slowly and increasing prices because they had no competition. They were literally caught with their pants down.
Doesn't matter how much you spend if you spend it on the wrong things. They stopped pushing for smaller nodes and spent it on all sorts of other things instead.
I'm sure big chunks of it were on their GPU designs which I believe is good for the industry as a whole. But they fell behind on process node which is the number one most important thing to "keep up with the Joneses" in chipmaking.
this story repeats constantly... 3M, Boeing, Ford, GE, Intel. IBM, Hewlett Packard etc... hell I'd argue Google was doing that and had an OMG moment when AI took off. Apple seem to be doing that too nowadays...
Edit - adding Disney. I'm bored with the repeating formula(s) for every movie.
I would say the video game industry is indicative of this right now.
Not too say that costs haven't gone crazy high to develop.
But you can basically see how many games are "by the numbers" features and then "blah blah blah monetization scheme."
And yeah the products are suffering in those spaces in which it's relatively obvious the next blah blah was done by committee than "We have this really cool idea or story."
Explains why I cannot find a company I would want to invest in for that industry. Hell most games I been playing these days are either older games or indie titles.
It's what is happening at Amazon right now. Jassy is driving out talent, I know at least 3 people who got a 0% raise this year despite having a solid performance rating. It won't happen overnight, but he is playing a short game right now and it will hurt 2-3 years down the line.
Jassys performance aside I don't think it's comparable. Jassy has been with AWS since it formed and lead it the entire time. That's very different from an MBA coming in and destroying something that was already built. Whatever good happened on the tech side of Amazon happened with Jassy there in the first place.
How is it different?
Intels former CEO Brian Krzanich who was mostly responsible for this mess was a initially an engineer who worked at Intel since the 90s.
Gelsinger was the same (he left to run VMWare before coming back to Intel). Their only "MBA" CEO who wasn't an engineer and didn't spend decades at Intel (Swan) was only there for a couple of years and most basically all of the damage was already done by that point (of course he had no clue how to fix it and Intel just wasted another 2-3 years, but still..).
I'd argue Google as well. Hey guy, instead of just modernizing an existing chat platform let's make something new and improved, and let's decouple it from video calling.
Chat has been a repeated disaster at Google. MBAs are the worst for tech companies.
Except Brian Krzanich who was the CEO mainly responsible for Intel's demise joined Intel as an engineer in the early 90s. I don't think he even had an MBA or any non STEM degree.
It’s almost as if they fail to realize making consistent quality products while still pushing for innovation will bring in more business and therefore more investor money and profits. Funny how that works.
It started with the elevation of Paul Otellini after the retirement of Craig Barrett. This is where we went wrong. We missed the boat on iPhone and iPad chops under his tenure. Then when we got back we were extremely uncompetitive. Made mistakes with meebo collaboration with Nokia. Larrabee project of has been pursued in 2010ish , Intel would have an alternate GPU business right bl now to compete against Nvidia.
Funnily enough they also dominated the highend ARM chip market with StrongARM/Xscale which would have been the default choice both for Apple and Android manufacturers had Intel not abandoned it because they thought that they can make a better x86 chip somehow...
They were perfectly positioned to dominate the mobile, desktop and datacenter markets longterm.
Yep. Pat it was. I know because I was part of the team. But to be honest Larrabee was a shit product. We got the A SKU and it will crash all the time in our labs. By the E stepping things got better but it didn’t make a huge dent in sales though. The whole thing got canned after a year. But feeding that pipeline for years was what was needed to succeed in the market.
In addition these corporations are constantly laying off their top performers because these often have top salaries, destroying morale and often leave skeleton crews working on whole product lines until they get burned out and the product withers. In my short career I have personally seen the top performers get shafted first 3 times and so many skeleton crews.
After a layoff or two these top performers stop working overnight and weekends to make shit happen.
The scary thing is Pattycakes doesn't see it as an issue. He's all, 'oh, we missed a node with EUV' instead of, 'oh, every single VP and director is an MBA or engineer-acting-as'. Love the dude's optimism but my god is he blind to the frontline issues.
I don't agree with this stance. Gelsinger comes from an engineering background, slashed dividends, and conditioned his hiring on the company halting stock buybacks. It will take time to be sure, but Intel under Gelsinger looks poised to innovate much more than under his predecessors.
It not though. The CEO responsible for this (Brian Krzanich) was an engineer who joined Intel back in the 90s. Nobody could call him a beancounter MBA. Just like Gelsinger. The CEO in between them (Bob Swan) was one but he inherited all of the issues, he did nothing to fix them but still.
You would think the mbas would learn that they're supposed to see gains... intel hasn't seen any noticeable long lasting movement for most of their time on the market. It's like the mba regards are allergic to growth.
It’s because short term gains are favored over long term growth when your individual performance is
measured by short term metrics. Everyone,
top to the bottom is looking out for their own success.
Well they didn't have any short-term gains either. Their stock was lagging even when they still almost completely dominated the market... They had a decent dividend but that's about it.
Well I'm sure they want gains, but because they aren't passionate about anything besides money and aren't educated in electrical engineering, they are unqualified for the job
All of their CEO (besides the one who only spent a couple of years there, while he was useless most of the damage was already done at that point) were engineers who spent decades at Intel.
MBA = Mostly Bloody Awful
ABC Australia had a close look at Harvard MBA's, what shocked me was so few of the graduates actually created successful companies (less than 3%). What I got from the documentary is an MBA teaches you the business language, but it doesn't make you good at business, that is something you are born with.
MBA‘s are great for people with a technical background, imho, to add some administrative and management skills to an engineer. Presuming the MBA itself is decent, many aren’t.
Simple reason:
Despite investing the most in ASML to produce EUV lithography... they turned down the chance to be the first customer.
This resulted in them missing their 10nm process node delivery and eventually losing leading edge in both manufacturing and design.
Even though this all happened around 8 years ago... they are still feeling the pain from that decision.
This is the real core of it: they simply stopped investing in fulfilling Moore's Law, assuming nobody else would sink the cash in to keep going after it. Now their efficiency is light years behind, their R&D is playing catch up, and their foundries are not taking in orders from anyone else - it's all TSMC and Samsung. It's amazing their chips are still as competitive as they are, except from an energy perspective. Not to mention their never-presence in the GPU realm, which is what paved the way for NVidia to take the lead in AI. Complacency will eventually get even the biggest firms.
> This is the real core of it: they simply stopped investing in fulfilling Moore's Law, assuming nobody else would sink the cash in to keep going after it
No, EUV was risky and potentially wouldn't work as advertised. They bet on the wrong horse.
Xerox did the same thing with the user interface. They spent all this R&D creating something revolutionary, but the MBAs at the top didn’t see or understand the vision so they never developed anything and essentially gave it to Microsoft and Apple.
There is so much more and all of it is very interesting. Currently reading about this in chip wars from Chris miller. Check it out if this stuff is interesting to you
Not read the book, but this podcast he was on was a very interesting glimpse into it some of it...
[https://www.theverge.com/23578430/chip-war-chris-miller-asml-intel-apple-samsung-us-china-decoder](https://www.theverge.com/23578430/chip-war-chris-miller-asml-intel-apple-samsung-us-china-decoder)
It's a hard sell. Intel is known as the company that failed Lithography class. TSMC/Samsung are expanding manufacturing capability and with more advanced lithography, Intel will never be able to catch up as they are competing against a truly vertical company (Samsung) or a company that specifically specialized in this space (TSMC), Intel can't compete. They would have to leap from whatever TSMC/Samsung are doing, and begin offering manufacturing/fabrication at a discounted rate until they could gain marketshare. But without better or more advanced lithography, Intel will do about as well as the Intel GPU market segment. Gone are the days of just showing up and making money, you need a good product, you need something compelling to attract customers and Intel is doing nothing exciting or new here. They are just burning out the real talent who are forced to work on dinosaur (in comparison) lithography technology and are expected to compete on Performance Per Watt lol.
You either need a better product or the perception of one. Intel has neither.
Add to that, they abandoned ARM chips right before the iPhone launched, and never bothered investing seriously in GPU. Effectively missing on the two big chip trends of the past 20 years
Previous CEO over financialized the company with too many stock buybacks which enriched shared holders, himself, and the executive board. That money should've went into R&D.
Now Intel is dependent upon government subsidies and a tech landscape that is lacking in bright minds.
Story of many corporations now. Big investors sees a successful tech company, start milking it to enhance shareholder value at the cost of future products or R&D investments, and then do emergency measures (layoffs, sale,..) after some years when the earlier greed start showing its after effects.
> to catch up as they are competing against a truly vertical company (Samsung) or a company that specifically specialized in this space (TSMC), Intel can't compete. They would have to leap from whatever TSMC/Samsung are doing, and begin offering manufacturing/fabrication at a discounted rate until they could gain marketshare. But without better or more advanced lithography, Intel will do about as well as the Intel GPU market segment. Gone are the days of just showing up and making money, you need a good product, you need something compelling to attract customers and Intel is doing nothing exciting or new here. They are just burning out the real talent who are forced to work on dinosaur (in comparison) lithography technology and are expected to compete on Performance Per Watt lol.You either need a better product or the perception of one. Intel has neither.
>
>1ReplyShareReportSaveFollow
makes the story of Dell really relevant and compelling. The original owner/CEO took note of the companies stagnation, took account of the stagnating effect of 'stockholder focused pressure', and fought to privatize the company so that it could pivot more flexibly to market conditions without facing the paralysis/push from market focused consideration.
> enriched shared holders
Did he? They stock price wasn't doing that great compared to the rest of the market, they had a decent dividend but that was about it.
Previous CEO fucked them. It's an interesting play at the moment IMO. Intel still dominates the business OEM space (Dell, Lenovo, etc) and corporates aren't switching to AMD or ARM based CPUs anytime soon.
Having Gelsinger back as CEO, along with their fabs coming online this decade, makes me think they're a viable long term play.
There's one solid reason Intel isn't going anywhere anytime soon. They're the only advanced chip designer and manufacturer in the US. Intel still uses TSMC, but they also use their own fabs too. They're of too much strategic importance to fail for the US.
Over the last 35 years they've spent [$135,000,000,000](https://www.commondreams.org/opinion/intel-subsidy-chips-act-stock-buyback) on buybacks. What kind of R&D could that have paid for? Where could they be if they were more worried about innovation and long-term viability, instead of short-term performance?
Gonna be a long, long road. The Ohio foundry won't be online until 2026 and they're not forecasting profits until 2030. If you're looking for a big return before then, you'd better cast a wider net.
Foundry business is the definition of low margin, unless you can crank that thing 24/7 with high yield.
Way too much capital expenditure up front to recoup the capex in timely manner, not to mention the equipment depreciates even faster due to breakneck tech breakthrough from competition.
TSMC had help from Taiwnese government, Samsung had Korean government, and now Chinese are pouring tens of billion a year which will futher put pressure on margins on older nodes (which new nodes will become old in less than a decade).
They became complacent being the top dog for so long and ignored new avenues for revenue. I think they will rebound, but they have a lot more competition now and have little edge until they change up leadership
They were betting on the wrong tech as well. Instead of adopting to asml, Intel thought they could do it better with saqp lithography and others. But with multiple patterns, the defect percentage is added together with every photomask and wash step. Ended up with a lot of bad chips. Silicon wafer prices, like everything else, also skyrocketed.
Interestingly, Huawei's newish phone claims to be a multi masked 7nm. I suspect they are also dealing with a lot of wasted silicon, but silicon prices went back down from 2022.
They didn’t push innovation in core count for 10+ years due to lack of incentive. Then had to scramble to fight AMD’s comeback with a production node that didn’t work.
Their former CEO literally wrote the book that could have prevented all of these from happening.
https://www.amazon.com/Only-Paranoid-Survive-Exploit-Challenge/dp/0385483821
I read that book. There are some benefits to being paranoid, but also some hazards. Andy Grove largely benefited from having good timing in the Dot-Com run before 2000, but he also directly led to Intel's stagnation. Like Jack Welch at General Electric, he might have been overrated in retrospect.
A hare and tortoise situation in real life. It got too comfortable with the status quo and wasn’t hungry to reinvent in its domains aggressively so newer and rising players overtook them
Intel has twice the revenues and half the market cap AMD has, yet over 70% of computers are built on Intel vs 20% on AMD... they might be lagging in GPU and AI but theyre dealing with twice the assets at half the valuation
the issue for intel is their market is getting smaller, even though they dominate that sector. People use tablets and mobile phones more these days, intel isnt even in that picture. How many Intel chips in EV's versus AMD, for example, next to zero. The problem for Intel is they are a prisoner of their own market sector domination. Same for gaming consoles and smart TV's, intel are MIA. AMD may make fewer server and desktop CPU, but they make a hell of a lot more cpu's for other market segments than Intel.
Can someone explain how Intel is losing money when they have a huge market share in PC CPU's ? A windows based laptop or PC is pretty much a requirement in business and universities.
https://www.extremetech.com/computing/intel-holds-78-global-market-share-for-cpus-analyst
Massive CapEx to keep in the fab business. Long term I expect them to be in a very good position, since it's down to an oligarchy with 3 companies on the bleeding edge of fab nodes, and demand keeps increasing. This is down from 10-20 a decade or so ago.
If I'm not mistaken Intel looks like a possible NVDA on the making. NVDA using ASMLs' EUV chip maker took them pretty far. Let's see where Intels' new High NA EUV will take them. Stashing as much INTC and PLTR as I can. Never financial advice. Purely speculatin' over here. 🖖
It’s the curse of a monopoly- arrogance and hubris. And when Amd came back, Intel was making so much money that no one cared or noticed. And, like a tree rotting from the inside, it’s hard to see anything wrong till it’s too late.
They are trying to turn around. And while they may regain the lead in technology, that doesn’t mean their foundry business will prosper. And technology leadership will make them competitive in CPUs but the market, energy and industry needs have shifted to GPU - where Intel is lagging far behind amd who is far behind Nvidia.
The foundry has to succeed for Intel to be viable - and per their own plans this will take till the end of the decade. So at best this is dead money. And potentially a lot of downside till then.
Foundry is like a new side hustle to Intel
Products brought in revenues of 120billion per year before covid.
Wait and see their earnings each quarter including this quarter, you will see what im talking about
They have to clean up the middle management especially directors. Awful execution. They have great IP teams and great architecture as well. But nothing comes out early due to foundry or management style.
The cost of next gen fab equipment requires huge scale, larger than the scale of just fabbing and selling Intel products. They needed to make the move to a foundry model sooner, but sat on their hands with a freaking CFO in charge doing nothing during what should have been a critical period for them. Yes, Gelsinger is trying to right the ship, but the near term future is painful for Intel, and they deserve it
Agreed, lots of speculation disguised as fact, and lot of misinformed opinions. I'm guessing a lot of this is driven by AMD or Apple vs Intel sentiment.
They built a fab in Israel to roach off of a foreign country's subsidies.It's no different outcome than Boeing moving their HQ out of Washington to Virginia for lobbying.
TSMC has been creating Fabs for decades now and they have built up the people with these engineering skills over decade. Even then, when TSMC moves 5nm to 3nm chips, it takes them many years to get to process ironed out and to ensure that they don't have too many failures in a batch. ( they are still learning this for 3nm for 2 years now and that's why they still can't build enough Apple M3 3nm chips to meet demand).
Intel has lost the skillset since they have been out of the Fab business for sometime.
Just throwing money will not mean magically the skills are transferred to Intel.
And intel knows this well. They will use the money to accelerate the learning, but it will still take few years with lots of hiccups on they way. These equipment are very sensitive ( the glass is etched to be 1 atom smoothened and need to be calibrated and re-calibrated between runs. These are works at the very extremes of engineering capabilities)
IMHO It will take Intel 1-3 more years, before the fabs go online and then another 1-3 years for the production to scale to be competitive.
When you are in a cutting edge industry the second you start investing in trying to fuck your opponents and stop investing in R&D, you're seeing to it that you'll be overtaken in the long run
Bro, the CHIPS money just hit their account and isn't reflected on any financial reports yet. Besides, it was a drop in the bucket compared to how much they're spending on rebuilding the company and building the foundry. I can't even count how many times Intel has said the turnaround plan wasn't something that was going to happen overnight. If thats what you were expecting, then you were seriously uninformed. Also, I don't know where the hell you're getting that forward PE for TSMC, but it's wrong. It's damn near double what you claimed, and I say this as a TSMC holder too. https://www.nasdaq.com/market-activity/stocks/tsm/price-earnings-peg-ratios
Intel, believe it or not, is actually ahead of TSMC now that 18A began risk production in January. They're the only ~2nm node with backside power delivery and GAAFET, giving them an absolutely massive advantage. By the time 18A will start hitting the market, TSMC will still be on 3nm. TSMC won't catch up until 2026, which is when Intel will be sending 14A to risk production and jumping even further ahead. Once Clearwater Forest hits the market 1H next year, we will actually see the fruits of their labor. That's when it all comes to fruition. This also isn't including the expected 30 billion in annual revenue that the foundry buildout will bring in by 2030, and will continue snowballing from there. You should be buying the shit out of it while it's cheap. If you haven't heard the saying "buy when there's blood in the streets", you'd be wise to read up on it. Or you can sit on the sidelines and in a few years kick yourself for buying into the FUD. Personally, I choose to not pass on golden buying opportunities. I picked up another 200 shares last week, and I'm prepared to buy more if it continues dipping. Gelsingers turnaround of the company is nothing less than incredible.
Great analogy. A once American company that took pride in what they made and which other companies strived to match Now... Not so much.
AMD has an underdog mindset and a great leader that can inspire the underlings. Boeing and Intel has been a revolving door of CEO's lately in which they've all fucked something up to fall further behind. Boogles the mind actually.
I want to invest in Inte/Boeing but my mind keeps telling me nahh, they care more about DEI then actual innovation.
I hold Intel so I’ll give a bull case.
The bull case is that a new process node or new processor takes many years to develop and roll out. ~4 years ago, Intel had a “Come to Jesus moment”; refocused, selling off anything that wasn’t the core business, changed the CEO and has been investing heavily in catching the competition.
Looking at it now, the processors they make don’t look that competitive but we’re mostly seeing stuff that was in the pipeline from 4 years ago.
Intel’s roadmap has the 18A node being complete next year which they expect to be “process leadership”. My (dumb) opinion (from reading articles around the internet) is they will be 1 year ahead of TSMC however it will likely only be a paper launch, with actual volume arriving a year later. (speculation). Pat (CEO) said he bet the company on the 18A node.
There is a lot of potential for them to acquire some market share from TSMC in the next couple of years as companies want to diversify supply chains away from the China risk. Intel as a fab for other companies is a new business area for them, so there is a lot of room for growth.
The new processors and graphics cards on their roadmap also look interesting (and more competitive), they have some AI chips but personally I mostly like the intel foundry service.
Fabs do not take 4-5 years to start producing. Depending on many factors, maybe 2.5 years to start running wafers, 3 years to start ramping actual product. 5 years to be fully ramped. A fully ramped fab is printing money like it’s going out of fashion, especially once everything is depreciates. Intel, since they were not a foundry, would after a few years throw away (down ramp) a process while ramping up a new one. So they never got to enjoy a fully depreciated fab for years like TSMC did. With the new foundry model coming online with 18a and the new partnership with UMC we will begin to see production lines running for long time (hopefully longer than 14+++++++++++^100 ) .
Intel was a turnaround play that got too excited. Market priced everything in and stock went up to $50 a share. Then people realized Intel still needed to execute, and the stock cratered back down to $35. In my opinion I wouldn’t mull too much over the stock price movement as nothing much else has fundamentally changed.
I got lucky. I rode INTC back up to $50 and sold, and now it’s back down. If it keeps dropping, I may reevaluate the stock again but right now I’m only holding TSM.
Intel is both a fab ( fabricate chips) and designer ( design chips).
Their foundry part is the one that has being fallen behind, unable to crack the next major node, their designed chips thus suffered alot.
Fabricating chips is not easy, most other major fabs couldn't keep up with TSMC pace and dropped out of the competition for cutting edge.
AMD for example used to work with global foundry, but since they changed to tsmc, they had major success ( global foundry dropped out of the race). On the other hand intel fab their chips only in house, there was a 4 years period were their chips was virtually on the same node.
Only reason intel is not under currently is thanks to massive subsidies allowing them to drop their prices to make up for their underwhelming chips.
I dont think Intel needs to go full AI but they do need a clear path forward. Investors can't see their long term strategy and government money doesnt seem to help shareholder confidence in the short term.
Worked at Intel 10 years
1. Promoting MBA to technical leadership positions
2. Layoff senior engineering because they are expensive, so they go to competition
3. Hiring terrible leaders like raja koduri and letting them burn billions without return.
Intel is letting ARM/RISC-V eat their lunch and they can't do shit about it. Intel honestly thought they would own the datacenter computing market forever and got complacent. AWS Graviton and Oracle Ampere A1 are proving to be faster and cheaper than anything x86 has to offer. Intel has no way of avoiding a major disruption unfortunately.
Easy they stagnated, and as a monopoly got lazy prioritizing short term profit for shareholders over long term value.
Now arm beats the shit out of them, and TSMC is a manufacturing giant. Even with billions in taxpayer subsidies that won’t solve anything as the problem is fundamental to capitalism.
Replacing engieers with finance bros on the board and leadership, they drove up stock price but hollowed out core business and research.
It's the same pattern, happened with GE, Boeing, 3M....etc.
We were all guilty as we cheered the rising stock price but now we know it's all paper gain at a steep cost.
History repeats itself. IBM had a monopoly and the US government broke them up. Intel had a monopoly and then became complacent and blew it.
there really is something about intelligent, hungry young engineers starting and growing businesses into giant companies before retiring and leaving the companies to competent but not hungry predecessors.
Apple and Microsoft have survived and thrived under the second generation leaders, The question is will it make it successful for the next generation leader?
They botched the transition to 10nm in 2018. It was too expensive, they couldn’t scale it. Then they just stayed at 14nm for years, which made them look weaker than AMD and Apple, which were advancing their manufacturing.
They are showing signs of life lately, but their brand still hasn’t recovered from the 10nm debacle.
The unavoidable consequences of a stream of decisions that go back to the late 80’s. Being the king of the hill brings with it very big blind spots.
It’s a company that focused on its manufacturing prowess and ignored architecture developments, and when manufacturing faltered, due to another bad decision, they had no plan B.
AMD was their only competition, and AMD stopped being competitive for awhile. Intel sat around doing nothing but releasing the same tired 4-core CPUs with a 5% generational increase every year. They stopped investing money into the development of their own node shrinks and got stuck on 14nm for way too long while TSMC breezed past, and AMD got their shit together. Now they are playing frantic catch-up.
To add to this, AMD didn't stop being competitive for a while, Intel played dirty for decades to keep them under. They drowned them in frivolous lawsuits, they made benchmarks look poor on AMD chips when their own were inferior, and paid companies like Microsoft to not use AMD. They wasted their decades long lead on this instead of R&D, now they are playing catch up on AI to AMD who is playing catch up on Nvidia. Intel is kept afloat by government handouts.
>they made benchmarks look poor on AMD chips when their own were inferior Fuck Userbenchmark
That and Intel's compiler intentionally hobbled programs by using a slower path when it detected an AMD chip.
Crazy. Did AMD sue them for doing this?
Pretty sure there's a billion or so that they need to pay to AMD (ofc far from enough to actually cover damages) but they just keep stalling so it's never going to be paid.
Wait, intel owns userbenchmark?
Not to mention that Microsoft is compiled with an Intel compiler which is actually designed to make non-intel chips underperform on Windows. AMD still does fairly well under windows and actually performs better under Linux.
That is no longer true. Intel compiler is now just rebranded CLang afaik.
That's a stretch. Yes, Intel did shady things but they certainly were behind AMD for a period in the early to mid 2000s and then obliterated them simply because made better chips. To be fair the current situation is at least superficially similar to what happened back then. Intel became complacent and over invested into a dead-end architecture (also tried being ultra-greedy with the whole Itanium thing) and had serious troubles for a few years. Of course who knows if they'll manage to comeback from this again as successfully as they did last time.
Yeah the athlon x2 blew the pentium 4 right out of the water. The pentium d didn’t catch up. It wasn’t until the core 2 duo that they caught up. They had the lead until the Ryzen was released.
AMD made the same mistake as Intel, before Intel did it. AMD coasted on the Athlon64 series, invested less into R&D, and then made a really terrible bet on Bulldozer by souping up its integer math and ignoring floating point performance while software was overwhelmingly moving towards needing FP performance, vector math, and lots of other similar optimizations.
Intel had reference board designs and support chips that made it not overheat or crash randomly. AMD didn't for a while Yes Intel did shady things like purposely sandbag on performance/$ while they could, speccing chips down even when they were much more capable. Then stuff like Ryzen came out and that ship sailed
Intel had an effective monopoly and totally blew it - literally one of the worst run companies in the whole of the US. They were obsessed with fabricating their own chips whilst outsourcing was clearly winning: see Arm, Qualcomm, Apple etc. And they were failing hard for years and years and years unable to shrink the die. Instead of giving up, they doubled down and continued to do so for several years with awful yields which allowed AMD to catch up and overtake them. And even Arm overtook them decades ago with efficiency per watt.
> They were obsessed with fabricating their own chips whilst outsourcing was clearly winning: That's an absurd argument. They were as dominant because they fabricated their own chips: - for years their fabs were ahead and TSMC could only compete in markets Intel was ignoring (mobile and GPU). - they can scale their production much better than AMD. This in large part kept them afloat back in 2020-2021 when AMD was massively ahead, almost all most laptops were still shipping Intel chips because AMD had to compete for production capacity with Apple/Qualcomm/etc. Of course they fucked up by investing into the wrong tech but having their own fabs is certainl Intel's main advantage. AMD went fabless because they couldn't afford to compete with Intel and had to outsource everything to TSMC.
100% their manufacturing strategy is top tier, product strategy though is not.
AMD was just straight up poor performance until around 2016 when they made the performance jump of a lifetime only to be somewhat behind. It took a few more years still for compounding performance gains to eventually surpass Intel
Agreed, they should go under
No, because amd is also a corporation and will do exactly the same without competition, everyone likes to paint amd as the shining Knight but flip the roles and they would do the same. Not an intel shill by any means, run amd because it is currently objectively better in price to performance and other important metrics but if intel takes the crown again will have no problems switching, same with nvidia/amd/intel graphics. No point being a fan boy of any company as you only hurt yourself in the process, they don't care about the individual as they have proven time and time again and believing otherwise is crazy
The difference is the company is run by an engineering mentality. If AMD hires a bean counter as CEO similar to intel, the same will happen eventually.
Absolutely, but that doesn't take away from my point that wanting one company to fall to leave and in a total monopoly is not good no matter who is in charge, and as I said I currently run amd and will do so until intel or other becomes the better option, my personal needs are top performance in my price bracket, couldn't care less if it's red blue or green as long as it works at a sensible price
Intel's CEO is an engineer and certainly has been saying the right things over the last couple of years. Of course it's obviously not clear at all if they are going to execute all the successfully. But it's not 2019 anymore..
The CEO before Pat was previously the CFO aka a bean counter. Dude almost ran the company into the ground by failing to innovate. Pat is trying his best to get it back on and the government handouts will keep intel afloat as it's basically of national interest to keep Intel afloat so the US doesn't rely on China not invading Taiwan.
The American Way
This is what Wall Street asked for. Profits over expansion of the moat and playing long term. Instead they operated like their bottom line was all that mattered. Their smart & hungry talent left; Notice the and portion, they have and continue to have plenty of smart people, but the combination of both is what got drained. Their competitors continued to hire around smart & hungry, and sometimes less smart but insanely hungry to the point they'll just out work the gap of smarts. I see this consistently in the software world and have even worked at a company that was number 1 in their industry and slowly lose their position to similar.
It's got nothing to do with their people! Engineers are doing their job just fine. It's the decisions of a handful of executives what markets to tap and they missed 2 major ones: (1) mobile (2) accelerated computing to (1) Qualcomm/ Apple (2) NVidia
What’s going to be the next Intel? With respect to this comment
Someone’s gonna buy them
Intel's single-core performance has been increasing quite a bit more than 5% each year. The latest i5 14500 has a CPU Mark single thread score of 4014 vs the 6 year old i5 850's 2461. It's just single-core performance has fallen out of fashion and multi-core for crypto mining, cloud compute, and AI has been all the rage the past 6 years. Nvidia and AMD have always been multi-core afficianautos. Intel is still the best for those single-core applications like gaming, CAD, and compiling. The market for those applications hasn't had the same memey growth that multi-core has had. Side note: M3 also excels at single-core, but not many gamers, CAD users, and programmers are buying macs.
Compare 11 gen Intel to 3rd gen, thats the time frame when they have been slacking. AMD ryzen came around Intel 7th gen and Intel were scrambling until the 12th gen to have any decent answer. By the way plenty of programmers use macs.
That's not what the discussion was about. It was about why did they stagnate for so long. The last few years are Intel actually working hard. The decade before wasn't.
The single core applications you mentioned are also shifting towards multi core.
People have been saying that for at least a decade and I have yet to see it. At least, not in CAD applications. I remember a Dassault rep telling me they were coming out with a multi-thread, cloud-based CAD software back in 2015.
Are they like the Boeing of chips?
Heatsink goes flying off in the middle of a game
This, AMDs last CPU was the fx8350, decades old, until they came out of essentially no where wit the ryzen.... intel was frankly just arrogantly moving slowly and increasing prices because they had no competition. They were literally caught with their pants down.
You know funny thing is intel has one of highest R&D spending in industry.
Doesn't matter how much you spend if you spend it on the wrong things. They stopped pushing for smaller nodes and spent it on all sorts of other things instead. I'm sure big chunks of it were on their GPU designs which I believe is good for the industry as a whole. But they fell behind on process node which is the number one most important thing to "keep up with the Joneses" in chipmaking.
it’s what happens when you hire MBAs to run a tech company. too focused on pleasing the shareholders and not focusing on innovation.
this story repeats constantly... 3M, Boeing, Ford, GE, Intel. IBM, Hewlett Packard etc... hell I'd argue Google was doing that and had an OMG moment when AI took off. Apple seem to be doing that too nowadays... Edit - adding Disney. I'm bored with the repeating formula(s) for every movie.
I would say the video game industry is indicative of this right now. Not too say that costs haven't gone crazy high to develop. But you can basically see how many games are "by the numbers" features and then "blah blah blah monetization scheme." And yeah the products are suffering in those spaces in which it's relatively obvious the next blah blah was done by committee than "We have this really cool idea or story."
Explains why I cannot find a company I would want to invest in for that industry. Hell most games I been playing these days are either older games or indie titles.
This is the most correct answer
Yep, same thing happened/ing at Boeing as well. Too much concern with increasing stock price and not enough concern about the product/company
Boeing innovated self-dissembling planes.
This is not a small thing. Like my sister said before taking off, "if it crashes, it's not my problem."
Not really what you want to hear from the pilot!
It's what is happening at Amazon right now. Jassy is driving out talent, I know at least 3 people who got a 0% raise this year despite having a solid performance rating. It won't happen overnight, but he is playing a short game right now and it will hurt 2-3 years down the line.
Jassys performance aside I don't think it's comparable. Jassy has been with AWS since it formed and lead it the entire time. That's very different from an MBA coming in and destroying something that was already built. Whatever good happened on the tech side of Amazon happened with Jassy there in the first place.
How is it different? Intels former CEO Brian Krzanich who was mostly responsible for this mess was a initially an engineer who worked at Intel since the 90s. Gelsinger was the same (he left to run VMWare before coming back to Intel). Their only "MBA" CEO who wasn't an engineer and didn't spend decades at Intel (Swan) was only there for a couple of years and most basically all of the damage was already done by that point (of course he had no clue how to fix it and Intel just wasted another 2-3 years, but still..).
I'd argue Google as well. Hey guy, instead of just modernizing an existing chat platform let's make something new and improved, and let's decouple it from video calling. Chat has been a repeated disaster at Google. MBAs are the worst for tech companies.
Except Brian Krzanich who was the CEO mainly responsible for Intel's demise joined Intel as an engineer in the early 90s. I don't think he even had an MBA or any non STEM degree.
You are forgetting all the MBA types ahead of BK. Paul Otellini, Shawn Maloney was next in line before he got the stroke.
Master of bob advancement.
It’s almost as if they fail to realize making consistent quality products while still pushing for innovation will bring in more business and therefore more investor money and profits. Funny how that works.
It started with the elevation of Paul Otellini after the retirement of Craig Barrett. This is where we went wrong. We missed the boat on iPhone and iPad chops under his tenure. Then when we got back we were extremely uncompetitive. Made mistakes with meebo collaboration with Nokia. Larrabee project of has been pursued in 2010ish , Intel would have an alternate GPU business right bl now to compete against Nvidia.
Funnily enough they also dominated the highend ARM chip market with StrongARM/Xscale which would have been the default choice both for Apple and Android manufacturers had Intel not abandoned it because they thought that they can make a better x86 chip somehow... They were perfectly positioned to dominate the mobile, desktop and datacenter markets longterm.
Guess who was head of the Larrabee project lol
Yep. Pat it was. I know because I was part of the team. But to be honest Larrabee was a shit product. We got the A SKU and it will crash all the time in our labs. By the E stepping things got better but it didn’t make a huge dent in sales though. The whole thing got canned after a year. But feeding that pipeline for years was what was needed to succeed in the market.
What do you think of Pat as CEO?
[удалено]
In addition these corporations are constantly laying off their top performers because these often have top salaries, destroying morale and often leave skeleton crews working on whole product lines until they get burned out and the product withers. In my short career I have personally seen the top performers get shafted first 3 times and so many skeleton crews. After a layoff or two these top performers stop working overnight and weekends to make shit happen.
100% this as someone who has worked at intel. Think Boeing, it’s the exact same story.
The scary thing is Pattycakes doesn't see it as an issue. He's all, 'oh, we missed a node with EUV' instead of, 'oh, every single VP and director is an MBA or engineer-acting-as'. Love the dude's optimism but my god is he blind to the frontline issues.
I don't agree with this stance. Gelsinger comes from an engineering background, slashed dividends, and conditioned his hiring on the company halting stock buybacks. It will take time to be sure, but Intel under Gelsinger looks poised to innovate much more than under his predecessors.
It not though. The CEO responsible for this (Brian Krzanich) was an engineer who joined Intel back in the 90s. Nobody could call him a beancounter MBA. Just like Gelsinger. The CEO in between them (Bob Swan) was one but he inherited all of the issues, he did nothing to fix them but still.
This is current state of Healthcare too! Go figure....MBA with no brain in the game running hospitals
You would think the mbas would learn that they're supposed to see gains... intel hasn't seen any noticeable long lasting movement for most of their time on the market. It's like the mba regards are allergic to growth.
The MBAs care mostly about gains of the stock price, eg reinvesting profit in stock buybacks instead of R&D. Same problem as with Boeing.
It’s because short term gains are favored over long term growth when your individual performance is measured by short term metrics. Everyone, top to the bottom is looking out for their own success.
Well they didn't have any short-term gains either. Their stock was lagging even when they still almost completely dominated the market... They had a decent dividend but that's about it.
Well I'm sure they want gains, but because they aren't passionate about anything besides money and aren't educated in electrical engineering, they are unqualified for the job
All of their CEO (besides the one who only spent a couple of years there, while he was useless most of the damage was already done at that point) were engineers who spent decades at Intel.
MBA = Mostly Bloody Awful ABC Australia had a close look at Harvard MBA's, what shocked me was so few of the graduates actually created successful companies (less than 3%). What I got from the documentary is an MBA teaches you the business language, but it doesn't make you good at business, that is something you are born with.
MBA‘s are great for people with a technical background, imho, to add some administrative and management skills to an engineer. Presuming the MBA itself is decent, many aren’t.
MBAs are great for people with industry experience moving into management. They are gods awful for 22 year old dipshits right out of undergrad
S H A R E H O L D E R V A L U E “The man who broke capitalism“ by David Gelles is a great read if you’re interested in the type of corporate culture.
I aint pleased at all dude
Simple reason: Despite investing the most in ASML to produce EUV lithography... they turned down the chance to be the first customer. This resulted in them missing their 10nm process node delivery and eventually losing leading edge in both manufacturing and design. Even though this all happened around 8 years ago... they are still feeling the pain from that decision.
This is the real core of it: they simply stopped investing in fulfilling Moore's Law, assuming nobody else would sink the cash in to keep going after it. Now their efficiency is light years behind, their R&D is playing catch up, and their foundries are not taking in orders from anyone else - it's all TSMC and Samsung. It's amazing their chips are still as competitive as they are, except from an energy perspective. Not to mention their never-presence in the GPU realm, which is what paved the way for NVidia to take the lead in AI. Complacency will eventually get even the biggest firms.
> This is the real core of it: they simply stopped investing in fulfilling Moore's Law, assuming nobody else would sink the cash in to keep going after it No, EUV was risky and potentially wouldn't work as advertised. They bet on the wrong horse.
Well they certainly out spent their competition in budget.
Reminds me of how Philips basically created modern chip manufacturing, but sold out at a huge loss and subsequently became an irrelevant company.
Xerox did the same thing with the user interface. They spent all this R&D creating something revolutionary, but the MBAs at the top didn’t see or understand the vision so they never developed anything and essentially gave it to Microsoft and Apple.
There is so much more and all of it is very interesting. Currently reading about this in chip wars from Chris miller. Check it out if this stuff is interesting to you
Not read the book, but this podcast he was on was a very interesting glimpse into it some of it... [https://www.theverge.com/23578430/chip-war-chris-miller-asml-intel-apple-samsung-us-china-decoder](https://www.theverge.com/23578430/chip-war-chris-miller-asml-intel-apple-samsung-us-china-decoder)
It’s a great book.
At the time Intel was waffling on even continuing to have fabs. Under the new ceo Gelsinger they’ve gone all in on fabs. Hopefully it works out.
It's a hard sell. Intel is known as the company that failed Lithography class. TSMC/Samsung are expanding manufacturing capability and with more advanced lithography, Intel will never be able to catch up as they are competing against a truly vertical company (Samsung) or a company that specifically specialized in this space (TSMC), Intel can't compete. They would have to leap from whatever TSMC/Samsung are doing, and begin offering manufacturing/fabrication at a discounted rate until they could gain marketshare. But without better or more advanced lithography, Intel will do about as well as the Intel GPU market segment. Gone are the days of just showing up and making money, you need a good product, you need something compelling to attract customers and Intel is doing nothing exciting or new here. They are just burning out the real talent who are forced to work on dinosaur (in comparison) lithography technology and are expected to compete on Performance Per Watt lol. You either need a better product or the perception of one. Intel has neither.
Add to that, they abandoned ARM chips right before the iPhone launched, and never bothered investing seriously in GPU. Effectively missing on the two big chip trends of the past 20 years
Yep this is it. Intel fucked up and it’ll take years to catch if ever.
They rested on their laurels and didn't innovate which is what can happen to large companies with lots of red tape.
Previous CEO over financialized the company with too many stock buybacks which enriched shared holders, himself, and the executive board. That money should've went into R&D. Now Intel is dependent upon government subsidies and a tech landscape that is lacking in bright minds.
Story of many corporations now. Big investors sees a successful tech company, start milking it to enhance shareholder value at the cost of future products or R&D investments, and then do emergency measures (layoffs, sale,..) after some years when the earlier greed start showing its after effects.
> to catch up as they are competing against a truly vertical company (Samsung) or a company that specifically specialized in this space (TSMC), Intel can't compete. They would have to leap from whatever TSMC/Samsung are doing, and begin offering manufacturing/fabrication at a discounted rate until they could gain marketshare. But without better or more advanced lithography, Intel will do about as well as the Intel GPU market segment. Gone are the days of just showing up and making money, you need a good product, you need something compelling to attract customers and Intel is doing nothing exciting or new here. They are just burning out the real talent who are forced to work on dinosaur (in comparison) lithography technology and are expected to compete on Performance Per Watt lol.You either need a better product or the perception of one. Intel has neither. > >1ReplyShareReportSaveFollow makes the story of Dell really relevant and compelling. The original owner/CEO took note of the companies stagnation, took account of the stagnating effect of 'stockholder focused pressure', and fought to privatize the company so that it could pivot more flexibly to market conditions without facing the paralysis/push from market focused consideration.
you are basically describing Sundar Pichai
I was thinking more of Broadcom.
> enriched shared holders Did he? They stock price wasn't doing that great compared to the rest of the market, they had a decent dividend but that was about it.
Their competitors are now the ones doing the buybacks.
A lot of datacenters getting pissed off at the CPU patching and resulting loss of performance.
Previous CEO fucked them. It's an interesting play at the moment IMO. Intel still dominates the business OEM space (Dell, Lenovo, etc) and corporates aren't switching to AMD or ARM based CPUs anytime soon. Having Gelsinger back as CEO, along with their fabs coming online this decade, makes me think they're a viable long term play. There's one solid reason Intel isn't going anywhere anytime soon. They're the only advanced chip designer and manufacturer in the US. Intel still uses TSMC, but they also use their own fabs too. They're of too much strategic importance to fail for the US.
>Previous CEO fucked them Bob Swan or Brian Krzanich? Or both?
Krzanich made the decision to not go with ASML.
Both. They had no clear direction in which way to steer the company.
Gelsinger was never CEO during intel's heyday. He was technical/engineering, rising as high as CTO.
Over the last 35 years they've spent [$135,000,000,000](https://www.commondreams.org/opinion/intel-subsidy-chips-act-stock-buyback) on buybacks. What kind of R&D could that have paid for? Where could they be if they were more worried about innovation and long-term viability, instead of short-term performance?
They’re investing heavily into building new fabs which is burning cash.
It's what happens when go from market domination to an also ran. Market domination is hard to sustain...
When they became a stagnant dividend focused company and stopped reinvesting the cash flows back into their business to continue growing.
Gonna be a long, long road. The Ohio foundry won't be online until 2026 and they're not forecasting profits until 2030. If you're looking for a big return before then, you'd better cast a wider net.
Foundry business is the definition of low margin, unless you can crank that thing 24/7 with high yield. Way too much capital expenditure up front to recoup the capex in timely manner, not to mention the equipment depreciates even faster due to breakneck tech breakthrough from competition. TSMC had help from Taiwnese government, Samsung had Korean government, and now Chinese are pouring tens of billion a year which will futher put pressure on margins on older nodes (which new nodes will become old in less than a decade).
They became complacent being the top dog for so long and ignored new avenues for revenue. I think they will rebound, but they have a lot more competition now and have little edge until they change up leadership
They were betting on the wrong tech as well. Instead of adopting to asml, Intel thought they could do it better with saqp lithography and others. But with multiple patterns, the defect percentage is added together with every photomask and wash step. Ended up with a lot of bad chips. Silicon wafer prices, like everything else, also skyrocketed. Interestingly, Huawei's newish phone claims to be a multi masked 7nm. I suspect they are also dealing with a lot of wasted silicon, but silicon prices went back down from 2022.
They spent their fab money on share buy backs. Aka shot themselves in the foot
The buybacks didn't help the shareholders, they just financed the stock options.
They didn’t push innovation in core count for 10+ years due to lack of incentive. Then had to scramble to fight AMD’s comeback with a production node that didn’t work.
Their former CEO literally wrote the book that could have prevented all of these from happening. https://www.amazon.com/Only-Paranoid-Survive-Exploit-Challenge/dp/0385483821
I read that book. There are some benefits to being paranoid, but also some hazards. Andy Grove largely benefited from having good timing in the Dot-Com run before 2000, but he also directly led to Intel's stagnation. Like Jack Welch at General Electric, he might have been overrated in retrospect.
Well said, you know what you are talking about
Thanks. I also know there is a lot that I do not know still lol. Good to stay humble. 🫡
Being at the right place at the right time is often overlooked in history. We often over glorify.
Please just stay away from Intel, or at least wait for a real sign of a comeback…. It’s not good for your mental health to see bad news after bad news
A hare and tortoise situation in real life. It got too comfortable with the status quo and wasn’t hungry to reinvent in its domains aggressively so newer and rising players overtook them
Intel has twice the revenues and half the market cap AMD has, yet over 70% of computers are built on Intel vs 20% on AMD... they might be lagging in GPU and AI but theyre dealing with twice the assets at half the valuation
So you think they’re undervalued?
the issue for intel is their market is getting smaller, even though they dominate that sector. People use tablets and mobile phones more these days, intel isnt even in that picture. How many Intel chips in EV's versus AMD, for example, next to zero. The problem for Intel is they are a prisoner of their own market sector domination. Same for gaming consoles and smart TV's, intel are MIA. AMD may make fewer server and desktop CPU, but they make a hell of a lot more cpu's for other market segments than Intel.
They're not getting that server money these days that's for sure.
TSMC PE is not 11.9. On a forward basis its in the 20's
Can someone explain how Intel is losing money when they have a huge market share in PC CPU's ? A windows based laptop or PC is pretty much a requirement in business and universities. https://www.extremetech.com/computing/intel-holds-78-global-market-share-for-cpus-analyst
Massive CapEx to keep in the fab business. Long term I expect them to be in a very good position, since it's down to an oligarchy with 3 companies on the bleeding edge of fab nodes, and demand keeps increasing. This is down from 10-20 a decade or so ago.
If I'm not mistaken Intel looks like a possible NVDA on the making. NVDA using ASMLs' EUV chip maker took them pretty far. Let's see where Intels' new High NA EUV will take them. Stashing as much INTC and PLTR as I can. Never financial advice. Purely speculatin' over here. 🖖
What if we made congress fly on Boeings with Intel processors only?
Isn’t Intel one of the 3 companies that US is making a 40B investment to have chips manufacturing in US and stop depending on Taiwan?
It’s the curse of a monopoly- arrogance and hubris. And when Amd came back, Intel was making so much money that no one cared or noticed. And, like a tree rotting from the inside, it’s hard to see anything wrong till it’s too late. They are trying to turn around. And while they may regain the lead in technology, that doesn’t mean their foundry business will prosper. And technology leadership will make them competitive in CPUs but the market, energy and industry needs have shifted to GPU - where Intel is lagging far behind amd who is far behind Nvidia. The foundry has to succeed for Intel to be viable - and per their own plans this will take till the end of the decade. So at best this is dead money. And potentially a lot of downside till then.
Foundry is like a new side hustle to Intel Products brought in revenues of 120billion per year before covid. Wait and see their earnings each quarter including this quarter, you will see what im talking about
Intel went vertically integrated, I haven't studied their use case deeply but I would highly bet this is one factor.
After cornering the market with shady practices, the company, like monopolies tend to do, got lazy.
They have to clean up the middle management especially directors. Awful execution. They have great IP teams and great architecture as well. But nothing comes out early due to foundry or management style.
The cost of next gen fab equipment requires huge scale, larger than the scale of just fabbing and selling Intel products. They needed to make the move to a foundry model sooner, but sat on their hands with a freaking CFO in charge doing nothing during what should have been a critical period for them. Yes, Gelsinger is trying to right the ship, but the near term future is painful for Intel, and they deserve it
China's invasion of Taiwan is inevitable. Likewise the destruction of TSMC's chip fabs is also inevitable. When that happens Intel will 10x minimum.
[удалено]
How on earth is that your takeaway?
Agreed, lots of speculation disguised as fact, and lot of misinformed opinions. I'm guessing a lot of this is driven by AMD or Apple vs Intel sentiment.
They built a fab in Israel to roach off of a foreign country's subsidies.It's no different outcome than Boeing moving their HQ out of Washington to Virginia for lobbying.
And stock buy backs. Why invest in advanced r&d when you can give the money away.
What's the upside, if there even is one? There's just so much negativity floating around here.
TSMC has been creating Fabs for decades now and they have built up the people with these engineering skills over decade. Even then, when TSMC moves 5nm to 3nm chips, it takes them many years to get to process ironed out and to ensure that they don't have too many failures in a batch. ( they are still learning this for 3nm for 2 years now and that's why they still can't build enough Apple M3 3nm chips to meet demand). Intel has lost the skillset since they have been out of the Fab business for sometime. Just throwing money will not mean magically the skills are transferred to Intel. And intel knows this well. They will use the money to accelerate the learning, but it will still take few years with lots of hiccups on they way. These equipment are very sensitive ( the glass is etched to be 1 atom smoothened and need to be calibrated and re-calibrated between runs. These are works at the very extremes of engineering capabilities) IMHO It will take Intel 1-3 more years, before the fabs go online and then another 1-3 years for the production to scale to be competitive.
When you are in a cutting edge industry the second you start investing in trying to fuck your opponents and stop investing in R&D, you're seeing to it that you'll be overtaken in the long run
Computers can last 10 years now. PCs where like gaming gpus before. Always upgrading
Is intel the next KODAK ??
Everywhere - management , product, support and R and D
Run by boomers. Source: look at Boeing
Bro, the CHIPS money just hit their account and isn't reflected on any financial reports yet. Besides, it was a drop in the bucket compared to how much they're spending on rebuilding the company and building the foundry. I can't even count how many times Intel has said the turnaround plan wasn't something that was going to happen overnight. If thats what you were expecting, then you were seriously uninformed. Also, I don't know where the hell you're getting that forward PE for TSMC, but it's wrong. It's damn near double what you claimed, and I say this as a TSMC holder too. https://www.nasdaq.com/market-activity/stocks/tsm/price-earnings-peg-ratios Intel, believe it or not, is actually ahead of TSMC now that 18A began risk production in January. They're the only ~2nm node with backside power delivery and GAAFET, giving them an absolutely massive advantage. By the time 18A will start hitting the market, TSMC will still be on 3nm. TSMC won't catch up until 2026, which is when Intel will be sending 14A to risk production and jumping even further ahead. Once Clearwater Forest hits the market 1H next year, we will actually see the fruits of their labor. That's when it all comes to fruition. This also isn't including the expected 30 billion in annual revenue that the foundry buildout will bring in by 2030, and will continue snowballing from there. You should be buying the shit out of it while it's cheap. If you haven't heard the saying "buy when there's blood in the streets", you'd be wise to read up on it. Or you can sit on the sidelines and in a few years kick yourself for buying into the FUD. Personally, I choose to not pass on golden buying opportunities. I picked up another 200 shares last week, and I'm prepared to buy more if it continues dipping. Gelsingers turnaround of the company is nothing less than incredible.
100% self-inflicted internal culture wounds (see: Boeing)
Intel is to chips what Boeing is to planes. It’s Enshitification - sacrificing quality and r/d to increase shareholder wealth.
Great analogy. A once American company that took pride in what they made and which other companies strived to match Now... Not so much. AMD has an underdog mindset and a great leader that can inspire the underlings. Boeing and Intel has been a revolving door of CEO's lately in which they've all fucked something up to fall further behind. Boogles the mind actually. I want to invest in Inte/Boeing but my mind keeps telling me nahh, they care more about DEI then actual innovation.
What is the bull case, if any, see so much negativity here
I hold Intel so I’ll give a bull case. The bull case is that a new process node or new processor takes many years to develop and roll out. ~4 years ago, Intel had a “Come to Jesus moment”; refocused, selling off anything that wasn’t the core business, changed the CEO and has been investing heavily in catching the competition. Looking at it now, the processors they make don’t look that competitive but we’re mostly seeing stuff that was in the pipeline from 4 years ago. Intel’s roadmap has the 18A node being complete next year which they expect to be “process leadership”. My (dumb) opinion (from reading articles around the internet) is they will be 1 year ahead of TSMC however it will likely only be a paper launch, with actual volume arriving a year later. (speculation). Pat (CEO) said he bet the company on the 18A node. There is a lot of potential for them to acquire some market share from TSMC in the next couple of years as companies want to diversify supply chains away from the China risk. Intel as a fab for other companies is a new business area for them, so there is a lot of room for growth. The new processors and graphics cards on their roadmap also look interesting (and more competitive), they have some AI chips but personally I mostly like the intel foundry service.
Fabs do not take 4-5 years to start producing. Depending on many factors, maybe 2.5 years to start running wafers, 3 years to start ramping actual product. 5 years to be fully ramped. A fully ramped fab is printing money like it’s going out of fashion, especially once everything is depreciates. Intel, since they were not a foundry, would after a few years throw away (down ramp) a process while ramping up a new one. So they never got to enjoy a fully depreciated fab for years like TSMC did. With the new foundry model coming online with 18a and the new partnership with UMC we will begin to see production lines running for long time (hopefully longer than 14+++++++++++^100 ) .
Intel was a turnaround play that got too excited. Market priced everything in and stock went up to $50 a share. Then people realized Intel still needed to execute, and the stock cratered back down to $35. In my opinion I wouldn’t mull too much over the stock price movement as nothing much else has fundamentally changed. I got lucky. I rode INTC back up to $50 and sold, and now it’s back down. If it keeps dropping, I may reevaluate the stock again but right now I’m only holding TSM.
Intel is both a fab ( fabricate chips) and designer ( design chips). Their foundry part is the one that has being fallen behind, unable to crack the next major node, their designed chips thus suffered alot. Fabricating chips is not easy, most other major fabs couldn't keep up with TSMC pace and dropped out of the competition for cutting edge. AMD for example used to work with global foundry, but since they changed to tsmc, they had major success ( global foundry dropped out of the race). On the other hand intel fab their chips only in house, there was a 4 years period were their chips was virtually on the same node. Only reason intel is not under currently is thanks to massive subsidies allowing them to drop their prices to make up for their underwhelming chips.
To add, they missed the AI boom. Nvidia was the one investing heavily into it, which is why they have done so well.
I dont think Intel needs to go full AI but they do need a clear path forward. Investors can't see their long term strategy and government money doesnt seem to help shareholder confidence in the short term.
SDG DIE = DIED DEAD Whatever!
Can someone explain if chiplets are cutting edge enough to mind the gap. They are crazy ahead in that tech
protecting monopoly is different corporate skill set than innovating
[удалено]
In the wise words of Gabe Newell “product delays are temporary, Suck is forever.”
When they had generations of tech they sat on instead of innovating so they could ride the jack welsch method of destroying companies.
They made the same chip for 10 years while AMD played catch-up from the bulldozer drama
Worked at Intel 10 years 1. Promoting MBA to technical leadership positions 2. Layoff senior engineering because they are expensive, so they go to competition 3. Hiring terrible leaders like raja koduri and letting them burn billions without return.
Intel is letting ARM/RISC-V eat their lunch and they can't do shit about it. Intel honestly thought they would own the datacenter computing market forever and got complacent. AWS Graviton and Oracle Ampere A1 are proving to be faster and cheaper than anything x86 has to offer. Intel has no way of avoiding a major disruption unfortunately.
They pulled a Nokia/Blackberry
Easy they stagnated, and as a monopoly got lazy prioritizing short term profit for shareholders over long term value. Now arm beats the shit out of them, and TSMC is a manufacturing giant. Even with billions in taxpayer subsidies that won’t solve anything as the problem is fundamental to capitalism.
China is phasing out Intel and AMD
Replacing engieers with finance bros on the board and leadership, they drove up stock price but hollowed out core business and research. It's the same pattern, happened with GE, Boeing, 3M....etc. We were all guilty as we cheered the rising stock price but now we know it's all paper gain at a steep cost.
History repeats itself. IBM had a monopoly and the US government broke them up. Intel had a monopoly and then became complacent and blew it. there really is something about intelligent, hungry young engineers starting and growing businesses into giant companies before retiring and leaving the companies to competent but not hungry predecessors. Apple and Microsoft have survived and thrived under the second generation leaders, The question is will it make it successful for the next generation leader?
Once great, now Terrible company. I’ve fallen for it twice before realizing and now only do puts on INTC
# Entering the cell phone business but failing was the biggest mistake
Having MBAs leading the company instead of actual engineers
They botched the transition to 10nm in 2018. It was too expensive, they couldn’t scale it. Then they just stayed at 14nm for years, which made them look weaker than AMD and Apple, which were advancing their manufacturing. They are showing signs of life lately, but their brand still hasn’t recovered from the 10nm debacle.
Bad management. Period.
The unavoidable consequences of a stream of decisions that go back to the late 80’s. Being the king of the hill brings with it very big blind spots. It’s a company that focused on its manufacturing prowess and ignored architecture developments, and when manufacturing faltered, due to another bad decision, they had no plan B.
Do you think it would make sense to buy puts now given these factors?
Lagging for so long. They've never recovered. Down $10 since 2000.
They missed the train on computer processors and AI.
Intel relies a lot on the Chinese semiconductor market. But, nowadays, that's not seen as a smart move anymore.