What Gelsinger Can Do To Unscrew Intel

A little more than a week ago, Intel announced that Pat Gelsinger, its former chief technology officer and former manager of the predecessor of its Data Center Group as well as the current chief executive officer at server virtualization juggernaut VMware, would be returning to the world’s biggest chip maker to be its CEO and to take on the task of rescuing the company from itself and its competition.

Intel reports its earnings tomorrow, on January 21, and is expected to give an update on its delayed 7 nanometer chip making processes for future Xeon server CPUs and future Xe GPUs and its beleaguered but now in production 10 nanometer technologies for its current Xeon server CPUs. There is a possibility that outgoing CEO Bob Swan will talk about Intel’s plans to farm out chip making to rivals Taiwan Semiconductor Manufacturing Corp and Samsung Electronics, the other two foundries that can actually deliver 7 nanometer and 5 nanometer processes for those who design chips and do not have the wherewithal to have their own foundries. That would be everybody but Intel and Samsung in the entire world right now, by the way. And maybe not either in the long run.

Gelsinger takes the helm at Intel on February 15, and that does not give us very much time to play armchair quarterback with some ideas about what Gelsinger should and should not do once he takes control of Intel. We think that Peak Intel happened a few quarters ago, but that the company will be throwing off enough cash to have plenty of operating room to make some big changes in the coming weeks and months. It remains to be seen how daring Gelsinger can be – or will be, given his three decades of experience as an engineer and top executive at the chip maker.

Before we get into all of that, it is probably helpful to remember that Intel has faced some pretty tough times in the past, and came through them and ended up stronger because of it. The best example is Intel getting out of the DRAM memory business in the mid-1980s. Intel had been a DRAM memory maker since 1970 – it was the first supplier of this technology in fact – and went public in 1971 in part due to its strength in this business, which was as important to Intel as its microprocessor business. Intel had dominant market share in DRAM in the 1970s, but by the 1980s, the Japanese memory makers ramped up DRAM production and lowered the pricing boom. Many companies were driven out of business between 1984 and 1986. It just kept getting worse, but Intel had effectively decided to exit the DRAM business already because its fabs invested in a manufacturing technology aimed more at microprocessors than memory. So by the time Andy Grove, one of Intel’s founders, took over as CEO in 1987, DRAM didn’t really matter to Intel so much anyway. It was an easy decision based on the numbers, but not easy emotionally for Intel, which thought of itself as a memory maker that also did logic.

The market made the decision for Intel, based on its performance against what was perhaps unfair competition – certainly overwhelming competition – but it was Grove who helped give Intel its new identity as a CPU designer and manufacturer. The turnaround was quick, all things considered, but that had more to do with the burgeoning PC market in the late 1980s than it did anything else. It didn’t hurt either Intel or Microsoft that IBM didn’t take its own PC business very seriously and gave control to these two companies before it really understood what it was doing. (Remember that idea for the analysis below.)

The key thing for Gelsinger to do – and that Intel’s founders and managers did successfully many decades ago – is to honestly and brutally assess what is key to Intel’s future and what is not. Grove may have said that “only the paranoid survive” as a way to motivate Intel to focus on competition, but as Intel’s might in the datacenter has grown, its paranoia has kicked into overdrive and it has been a bit acquisitive without being as focused as it needs to be. This happens to all big companies that create mini monopolies, as IBM and Microsoft have done before Intel.

Such an assessment as we are suggesting that Gelsinger do would start with the obvious: Intel is not the top notch chip fab that it once was.

Since its inception, Intel has been as much a manufacturer as it has been a chip designer and marketing organization. Serious lags in Intel’s chip manufacturing processes – the 10 nanometer process is four years late if you want to be generous to Intel, and its 7 nanometer process now looks like it will be at least a year and a half to two years behind TSMC and Samsung. This foundry business eats an enormous amount of money, but ironically, Intel is not spending enough on it. In the September quarter last year, Intel’s top brass said that it expected to spend somewhere between $14.2 billion and $14.5 billion in 2020 on capital expenses, the vast majority of which is for its foundries. Through September, in an effort to prop up its share price and therefore the wealth of its biggest shareholders and its key executives who get big chunks of shares as part of their compensation, Intel shelled out $14.2 billion in cash for share buybacks against $10.4 billion in capital expenses.

Throwing money at problems does not always solve them, but not throwing money at problems, or even good running businesses, creates problems in the long run. By contrast, TSMC recently announced that it would be spending $28 billion to build out factories to support 7 nanometer, 5 nanometer, and 3 nanometer chip manufacturing in 2021. That’s a little less than twice what Intel is spending, and the good news is that Intel has been able to rake in the cash all those years because what it can charge for a chip to an end user in a device is a lot higher than what TSMC can charge to a customer who in turn will sell it to device makers. Intel will make around $70 billion selling chips in 2020 against that $14.5 billion in foundry investments, not all of which will be used in the manufacturing for that year of course. TSMC will make maybe somewhere around $52 billion against $28 billion in foundry investments in 2021 and again, most of TSMC’s chip sales are not against its most advanced nodes. But its most profitable ones probably are. But the run rates of chip revenues versus capital outlay are illustrative.

Intel’s strategy of the past decade or so works – right up to the moment that it doesn’t. Now Intel has promised to keep Wall Street happy with share buybacks at a time when it should have spent years perfecting its chip etching processes and building the foundries to compete with TSMC and Samsung. We have no idea what Intel did wrong to get into its 10 nanometer bind, but the cost will be coming home to roost now, and we shall see if Intel can pull the rabbit out of the hat with 7 nanometer and 5 nanometer processes.

Maybe what Intel really needs to do is spin off the foundry completely. Maybe that is what the United States government and what the chip industry in the United States needs, too. Or, maybe it is too late for that.

Back when IBM went up on the rocks in the early 1990s and Lou Gerstner came in from American Express to be Big Blue’s first non-IBM CEO, he must have looked around and saw a company that was more messed up than either Wall Street or Main Street thought, and the only thing he could do was to hold it all together and pivot. The IBM pivot was to stop protecting its server businesses and open itself up as a supplier of systems software and services for all platforms, IBM or otherwise, and through the magic of an outsourcing boom and then the dot-com boom that drove a slew of services into large enterprises, Gerstner got lucky. IBM ended up financially engineering itself into a hole, much as Intel has done in past years, and has sold off too many businesses to list and is trying to re-invent itself with its Red Hat acquisition.

A foundry spinoff could work, and a lot depends on the pricing that Intel would get from the spinoff to make Intel’s chips. If it is too high, then the remaining Intel would not show huge profits, and make it too low and the foundry could not, either. But in the current economic and political climate, we believe that there is some interest in having a truly indigenous and open foundry in the United States as a counter balance to TSMC and Samsung. It really depends on how much competition we want, how much control we want, and how much risk we are willing to take with only two advanced foundries if Intel decides to drop back and punt like GlobalFoundries did in August 2018 when it spiked its 7 nanometer development efforts.

This is one very real possible pivot for Gelsinger to steer. The US government is plenty nervous about not having advanced chip making inside the country, and it might even be willing to help fund the creation of an indigenous foundry operation based on Intel’s fabs as the foundation. Intel and others have been courting a $25 billion investment from Uncle Sam since last year, but this would be more than providing matching funds for companies who build a fab in the United States. The SEMATECH consortium was formed in the late 1980s and funded for over five years with $500 million, which is about $1.14 billion in 2020 dollars, to do the fundamental research to create the equipment that makes chips. What we are talking about would be a much bigger investment for an indigenous foundry, and we think that TSMC and Samsung could also get help in putting their foundries here, too. Ditto for Europe. There is no good reason that Europe should also not have some capability for advanced chip manufacturing. Having said all of that, it is not really the job of the US government to explicitly help corporations fix their problems. This has to be a big enough national security risk to warrant the investment, and we are not qualified to make that call. We don’t know who is, either.

The other option is more of a nuclear one, and it is to do what AMD and IBM did: Sell off the foundries directly and walk away. There are only two potential buyers, TSMC and Samsung, unless the investors in GlobalFoundries have a lot of money sitting around and they think they can use Intel’s foundry operations as a means to get back into the advanced process game. None of these options seem likely to us.

Here is another crazy pivot for Gelsinger to consider. There are rumors that Intel is going back into the Arm client and server chip market. Why not go all the way and try to outbid Nvidia for Arm Holdings? (We told you it was crazy.) We think the odds for this pivot are very, very low indeed. Intel would probably have more antitrust issues buying Arm Holdings than Nvidia is now having in the United Kingdom and China, and a bid by Intel might actually improve Nvidia’s chances of closing the deal.

Intel could go in the exact opposite direction, and that would be to build its own public cloud. Look at it from Intel’s point of view. The top eight buyers of its chips are all tails wagging the CPU manufacturing dog, and each and every one of them has some sort of plan to introduce Arm servers into its infrastructure. If the hyperscalers and public clouds are thinking vertically, and at some point they are going to represent maybe 65 percent of shipments, and if the OEMs are going to be under increasing pressure because of the static or dwindling compute capacity needs of their customers, then maybe Intel should be thinking vertically, too. That would mean becoming a server manufacturer for realsies, not just for special bid deals, and using those servers in its own infrastructure cloud.

The trouble with this Intel pivot is that the investment to build a public cloud on the order of that put together by the Super 8 would be absolutely ginormous. And for the X86 workloads the big clouds need to support for their customers, those big clouds might be driven right into the waiting arms of AMD.

Building a public cloud from scratch would take tens and tens and tens of billions of dollars. Intel can get its CPUs and network ASICs on the cheap (provided its fab spinoff doesn’t gouge it on the prices) but it can’t bend metal, or buy memory, or buy flash (now that it has sold off its flash business) any cheaper than an ODM operating at volume. Building a public cloud is a very tough business in 2021. And people now expect more than just the raw infrastructure services that Intel could probably provide well with an acquisition or two. Intel could not build the vertical systems and application software that AWS, Microsoft, and Google have done and that Alibaba, Baidu, and Tencent are doing to varying degrees.

There is a higher probability that Facebook will start offering cloud services based on its technology stack, and that seems like pretty miniscule chance at that. If we were running Facebook’s infrastructure, we might consider it as a way to lower costs for IT for the Facebook app. But that would be a ten year plan and it might come to nothing because AWS is creating a modern, complete platform and Google and Microsoft are trying to do the same.

The lesson of these thought experiments above is that sometimes, you cannot buy or sell your way out of your problems. You have to dig in, figure out who you are and who you want to be, and get on with that. This is how IBM, Microsoft, and Apple have all successfully done their pivots, and to a lesser extent, how Hewlett Packard Enterprise and Dell have stayed relevant if not precisely hugely profitable. (Someone has to build systems and sell them, and we thank you for that.) The trick is to not emulate the past in the strategy. HP (when it didn’t have the E but it did have PCs and printers) and Dell had Big Blue envy after Gerstner did his pivot for IBM to software and services. They bought all kinds of businesses that they then sold off. Dell did it again buying EMC and is now apparently trying to spinout VMware to unlock its potential value on Wall Street.

If Gelsinger does intend to stay in both the compute engine design and manufacturing businesses, we have some suggestions. First, decide if Intel is going to be one or the other or both as it has been historically. If both, then stop blowing cash on share buybacks and actually invest heavily in the fab business. As we come to the end of Moore’s Law as we have known it, this is a harder pivot but one that can be done with advanced packaging. Just like someone has to make the servers, someone has to make the CPUs, GPUs, FPGAs, and so on. Offload some manufacturing in the short term to TSMC and Samsung to get things back in order, but get a process and packaging roadmap together and drive it.

Also, Intel needs to stop buying its way out of problems and also rationalize its compute engines. Intel has a lot of competing and overlapping products that can be used as accelerators that offload work from CPUs as well as CPUs that onload this work. Pick a single strategy that makes sense: CPUs only do X, Y, and Z serial work and all acceleration gets done on A, B, and C devices always and linked to the CPUs in absolutely consistent ways. Make this easy. Or at least easier. Nvidia is going to do that, particularly if it launches its own Arm CPUs, as we expect it will. IBM confused customers for decades because it refused to say which of its servers should be used when, and when asked by customers which one they should buy, the attitude was, “Well, how much money you got?”

Don’t just explain that Intel has a lot of compute engines in terms of capability and style. Show system architects how to use them best, and when and where. And also show customers what engines not to use for specific workloads and situations. This information is just as valuable. And if some of these engines are not really panning out, spike ‘em. Write ‘em off. No one will remember it any more than they do Intel’s DRAM from the 1970s and 1980s. Well, unless they are history buffs like us.

One last thing. If nothing seems to be working, change the conditions of the game entirely. Open source the X86 instruction set and the Core and Xeon chip designs and let all hell break loose. . . . That’s not really a business plan, though. That is the true nuclear option for Intel, and one that only makes sense if it is committed to having the world class manufacturing operation it once had. Remember: Someone has to make the chips, and it might as well be Intel one third of the time.

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4 Comments

  1. Intel must:
    1. Ditch the x86/x64 chaotic, buggy, power eating, costly, and faulty by design architecture, and come up with a new and open one that is snappy, low-powered, lightweight, and less costly, to be used in a System on a Chip. It’s like replicating the ARM model, but with twists of its own.

    2. Outsource chip manufacturing to TSMC, Samsung and etc. Buy their share, or whatever, just abandon that sinking ship.

    3. Do not get lured into cloud business. Do not compete with itself, by competing with its own potential customers. Do not enter IAAS cloud market. Try to form alliances instead, or let the open hardware shape the market ahead.

  2. Having competed directly with Intel industrially through the 1990’s and having monitored intensely now for two additional decades, which is still directly competitive on law and policy fronts, the house of cards monopoly built requires moral and structural reconfiguration that is not a shoring up or retrofit.

    Financially Intel monopoly mass is unsustainable lacking cost optimization in line with revenue potential and current generation that has nothing to do with design manufacturer but a continued reduction in unnecessary costs, margin drag and the continued elimination of financial leaks that have robbed the enterprise of capital supporting plant, production, equipment, construction, research, development and brain trust.

    Similar to AMD 35% annual gross revenue sacrifice supporting bundle deal sales close incentive, reclaiming Intel bundle deal averaging $40 billion annually over the prior decade is the surest method to increase both enterprise s gross revenue overall for enterprise valuation and into future investment.

    Sustainable business dictates that give-away-in-sales-package and the unnecessary costs of production go.

    Intel reports earning today will certainly be invented. “Throwing off cash”, how about letting fewer components out the door for nothing in sales package. Or eliminating that production cost speaks a lot about area optimized dice that rely on Intel mask shop incredible in-house competitive cost advantage.

    Pursuant update on lithography advance Intel has successfully harvested 14/12nm and 193 quad patterned immersion at a similar competitive cost : price / margin to TSMC 7 nm that has nothing to do with physical component performance. This strategy of trailing one node for learning waiting leap frog is not cost competitive trailing at two nodes behind where channel inventory data places Intel 10 nm at 20% of current production and I’ll throw in another + 10% that worldwide channel inventory currently does not see. I thoroughly expect Intel to will remain a harvesting follower trailing one node behind for learning to look out for inordinate factor cost increase, node to node, while aiming to leap frog and most likely in packaging. By trailing one node Intel benefits competitively on back half of run production cost : price / margin while fabrication competitors shoulder the brunt of next factor cost increases. To do this means 10 nm production at Intel must be peak volume production capable now.

    The trick is for Intel to cost and profit optimize every time competitors attempt to profit maximize ramping on a more costly new node. There after Intel does what Intel always does when ramping a new node, by following other’s learning and the initial factor cost increase, copy what works for Intel and leave the garbage behind. This may not necessarily be innovative in terms of volume production but on Intel volume keeps the operation close enough to leap frog technically when that opportunity arises.

    It’s really just good ole Intel doing what Intel has always done best, borrowing. Plus Intel is a platform business and this conversation neglects those aspects of Intel’s core business essential to systems integration.

    This analyst anticipates + 10% volume from what can’t be seen in channel now is Xeon Ice Lake where any lack of 10 nm Xeon volume looses a critical cost : price / margin contributor essential for shoring up enterprise financial structure. If Xeon + 10% on Core 20% of current production means by 2021 end of year 2/3rds of all Intel production is 10 nm. Where without 10 nm volume, Intel Xeon product line price support pulling up all of Core gross margin, Intel’s flagging monopoly house of cards comes tumbling down. Something 14 nm Scalable kibble even if for keeping customer enterprise information tech and the business of compute, as it exists today humming along, cannot shore up Intel by category product line gross margin without that Xeon price support.

    Considering Intel’s 10 nm manufacturing plan we’ve seen Big fin Tiger Lake quad, now so said on CPU specification + 39% base, + 7% all core, + 14% max frequency boost with power range less 20% to + 40% higher frequency and the soon anticipated octa implementation. In incremental steps Big fin frequency appears to have improved as much as 30% over Small fin Ice Lake 10 nm where at Ice Lake U up to 4.1 GHz i7 is not produced on channel view however maxes at 3.9 GHz. All about a good layup and always has been.

    Average weekly ramp suggests improvement; over the production runs to date Comet Lake U + 20% per week, Ice Lake U + 17% per week, and TL quad + 37% per week except in the 15th week of supply Big fin Tiger channel volume is just 60% of Small fin Ice in the same supply week. Quad + power + area appear to be Intel’s recipe for bringing a well laid-up 10 nm component to market. In relation Ice lake U range 15 to 28W supply volume over the next 10 weeks everyone will know if Tiger Lake quad range 12 to 28W can ramp.

    Pursuant Xeon, at 14 nm there is no doubt Intel on yield assessment Intel can produce a 16 core part in very high yield. Where fortunately, for most commercial data applications CPU max frequency wanting system stability and power optimization on utilization is not the top check box; stability, price and cost of power for core/thread optimized applications is, and for applications effectiveness across the entire commercial market 18C processors or less still make up 83% of all Intel production and 45% of all AMD production. Specific to Intel speaks for the need of area optimized mask sets, or disaggregate you chose.

    Intel Scalable Skylake, Cascade lake and CL refresh full run by core grade;

    4C = 8.13%
    6C = 4.77%
    8C = 23.76%
    10C = 9.69%
    12C = 15.17%
    14C = 4.89%
    16C = 9.81%
    18C = 6.6%
    20C = 4.93%
    22C = 1.42%
    24C = 4.06%
    26C = 2.05%
    28C = 4.71%

    AMD Epycs all inclusive

    8C = 19.35%
    12C = 0.67%
    16C = 25.46%
    24C = 16.43%
    32C = 34.01%
    48C = 0.52%
    64C = 3.55%

    For Epyc Rome only;

    8C = 14.51%
    12C = 3.39%
    16C = 15.67%
    24C = 11.88%
    32C = 31.92%
    48C = 2.93%
    64C = 19.71%

    Specific commercial dGPU, salvaging Scalable lakes from data processing to dGPU accelerated compute cluster is the largest secondary market refurbishing opportunity ever to come along in the history of compute. At 300 million units deployed total available market, everyone’s got their eye on this including innovation replacements to dGPU accelerated compute.

    On farming out, Intel fabrication and production operation is optimized to secure Intel margin that is not TSMC or Samsung margin. Albeit there is the competitive producer margin squeeze. Disablement has never been cost competitive for Intel and since 22 nm places a drag on margin. You can’t be good at producing a many cores component only to disable it for down bin offerings and the full product line card.

    At Tiger Lake and for specific Scalable components Intel appears to have recognized this reengaging the mask shop for area optimized designs. AMD is in a similar situation with APUs where the cost of Renoir disablement for down bin availability, 4/2 cores from an 8C die, is prohibitive on the cost of disablement on the overall loss of full run margin. This has been one of the reasons Intel contracts out bottom of the product stack and legacy node components. Personally I think we will see less of this rather than more. The only reason for Intel to contract fabrication is associated with loss of capacity resulting from a total revenue loss, financial leaks in the enterprise, occurring the last decade and escalating in the prior year. One can see the amount of low core and high core count Scalable lakes bundled into sales package and shipped but not as revenue units.

    “Think Intel peak happened a few years ago?” On channel supply volume data Intel production peaked between January 2018 and September 2019 at approximately 856 M units annual primarily Xeon is now down into 350 M unit range. The majority of said Xeon volume escaped as sales close in bundle deal and through 2020 as down bin low core count components. Bundle deal revenue recognition, where few recognized said Xeon revenue down the supply chain that if recognized, and paid taxes on, would have more than covered the price of before now addressing Intel’s current capacity conundrum making that issue moot. Which gets back to not throwing off cash, but preserving capital for enterprise investment.

    “But as Intel’s might in the datacenter has grown, its paranoia has kicked into overdrive and it has been a bit acquisitive without being as focused as it needs to be”, which should be focused on sustainability of the entity over tying, bridging and loosing production values. On acquisitive, Intel divisions need to stand on their own balance sheets because DCG’s ability to subsidize all operating divisions escaped out the back door. This analyst firmly believes Intel acquisitions going forward need be focused on the core of the business which is design fabrication and component product manufacturing that is not lateral or soft beyond tools vertical to the need of the enterprise, and since down channel Intel already maintains distribution sales tentacles any Intel acquisition should be focused on materials science, manufacturing tools development, packaging is a big movement now and associated research. Not to monopolize the upstream tool chain but to assure equipment deployed in Intel manufacturing facilities works in unison with Intel design tools and Intel design methodology. Intel fabrication process and Intel tools cannot be separated which appears partially responsible for the at 10 nm difficulties. Getting rid of Intel fabrication and/or refocus on foundries resolves none of the Intel core business issues simply extenuates them creating more issues because Intel tools and design fabrication process are so tightly coupled.

    Intel Annual R&D as % stated revenue and % change in the value of PE&C net

    1993 = 10.93% = base
    1994 = 9.64% = + 34.31%
    1995 = 8.00% = + 39.20%
    1996 = 8.67% = + 13.60%
    1997 = 9.36% = + 25.67%
    1998 = 9.55% = + 8.84%
    1999 = 10.59% = + 0.91%
    2000 = 11.55% = + 28.15%
    2001 = 14.30% = + 20.70%
    2002 = 15.07% = – 1.51%
    2003 = 14.47% = – 6.65%
    2004 = 13.97% = – 5.36%
    2005 = 13.25% = + 8.52%
    2006 = 16.60% = + 2.87%
    2007 = 15.03% = – 3.89%
    2008 = 15.22% = +3.70%
    2009 = 16.09% = – 1.82%
    2010 = 15.43% = + 3.91%
    2011 = 13.92% = + 32.00%
    2012 = 19.04% = + 18.44%
    2013 = 19.91% = + 12.31%
    2014 = 20.65% = + 5.76%
    2015 = 21.91% = – 4.15%
    2016 = 21.45% = + 13.54%
    2017 = 20.87% = + 13.65%
    2018 = 19.12% = + 19.14%
    2019 = 18.57% = + 13.09%

    Intel Plant, Equipment and Construction Y/Y % contribution or decline and % of revenue;

    1993 = base
    1994 = 25.54% and 11.90%
    1995 = 28.16% and 12.99%
    1996= 11.97% and 4.87%
    1997 = 20.43% and 8.69%
    1998 = 8.12% and 3.59%
    1999 = 0.90% and 0.36%
    2000 = 21.97% and 9.78%
    2001 = 17.15% and 11.71%
    2002 = – 1.54% and – 1.02%
    2003 = – 7.12% and – 3.93%
    2004 = – 5.66% and – 2.61%
    2005 = 7.85% and 3.46%
    2006 = 2.79% and 1.39%
    2007 = – 4.04% and – 1.79%
    2008 = 3.57% and 1.67%
    2009 = – 1.85% and – 0.91%
    2010 = 3.77% and 1.58%
    2011 = 24.24% and 9.55%
    2012 = 15.57% and 8.17%
    2013 = 10.96% and 6.46%
    2014 = 5.45% and 3.24%
    2015 = – 4.33% and – 2.94%
    2016 = 11.92% and 7.26%
    2017 = 12.01% and 7.87%
    2018 = 16.06% and 11.10%
    2019 = 11.57% and 8.91%

    So what happen? Since 2016 Intel is investing in plant, equipment and production but in what category and where, and how do acquisitions within PE&C line item contribute to design, process and the overall manufacturing core and whole platform competencies? It‘s time for Intel to invest in the core business design, process, and manufacturing similar to 1995, early 2000’s and 2011. On all that product revenue that snuck out the back door, places Intel implementing CEOs 9 month, 18 month, 3 year within 5 year plan on an accelerated basis that, in my opinion, focuses on the core of the business that is not other enterprise’s business. God ole Intel only procures from other sources to get a look inside. And while there are cost efficiencies matching product and process, that’s Intel’s business ultimately. And if Intel foundry is part of that solution a federated fabrication cluster divested from its product divisions opens up a potential Intel fabs will produce other than Intel volumes they will never walk away from. Choosing in addition to Intel and working with customers on what Intel manufacturing can produce profitability within sustainable frameworks.

    Certainly Intel customers in hyper scale, cloud and other businesses of compute benefit from Intel vertical platform focus to some degree today and can Intel extend from their own derivatives to produce the wholly unique and original designs of others? Of course they can, tightly coupled with Intel component and within platform solutions.

    Pursuant Cloud, well Intel has a cloud, it’s called Intel Cloud. Where just like Intel fabs, Intel cloud is closely coupled to produce Intel design on Intel tools so in my mind, anything else diverts that resource from its core intent and Intel’s core business.

    “The key thing for Gelsinger to do – and that Intel’s founders and managers did successfully many decades ago – is to honestly and brutally assess what is key to Intel’s future and what is not”. Where Intel is so bound up and tightly coupled with itself the only answer is to stick Intel. Sell off the fabs and Intel will go broke.

    Modifying the manufacturing relationship under a federated operating structure enables individual fabs to do what they know works within the overall Intel volume envelope. “You have to dig in.”

    Yea, its all been about construction, outfitting and getting back to work.

    Mike Bruzzone, Camp Marketing

  3. That’s an excellent opinion article!

    Intel stick to manufacturing claim: National Supply chain safety reasons only. That’s why TSMC and Samsung are evaluating the possibility to get local footprint.

    Intel entering public cloud: I would only add the ‘all hyperscalers are doing their own CPU/DPU/AI chips these days anyway’ so time for action is running out

    Intel buying ARM?! : train de-trailing sound/mind explodes! 🙂 Since we are living in the Intel outsourcing CPUs to TSMC world, why not!

  4. There is no way in the metaphysical or quantum physical universe that x86/x64 can ever be made in such a way as to compete with ARM in terms of IPC per watt. And Intel nor AMD has shown for a decade that they can innovate x86/x64 as fast as ARM can for their ISA.

    So…Intel…for what it is worth. ( Local spot of price of 2 increasingly copper less pennies )

    1: Ditch all the foundries. Now. Either sell them for what you can to GloFlo or write them down. Walk away. Quickly. By the end of the year 2021. Go with a combo of TSMC, Samsung and GloFlo.

    2: Create a ten year plan to phase out of x86/x64. The time has come to pull down the curtain on that architecture and let it die as so many other architectures that have come and gone after they have outlived their usefulness for a future that never sleeps and demands changes and progress that those archs can no longer promise nor give.

    3: RISC is your game now. Pick one. Either join the OpenPOWER foundation and drive further innovation with that Arch and ISA or….

    Join the RISC-V Org, outright buy SiFive and Canonical to get Ubuntu and turn yourself into an IBM and become a turnkey, integrated Platform Solution Provider.

    4: Forget ARM. You made the mistake of letting that go decades ago. So did AMD. Let AMD go down the drain as the sole remaining, big, hot iron x86/x64 arch designers. Once x86/x64 hits 3nm, it’s over. If anyone can even get there at scale needed to be profitable.

    OpenPOWER, or RISC-V and a combo of your efforts in FPGAs such as Altera and your Neuromorphic efforts could make quite the compelling story leading into the 2030’s.

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