[HN Gopher] Intel can't grow profits in a global chip shortage
       ___________________________________________________________________
        
       Intel can't grow profits in a global chip shortage
        
       Author : mellosouls
       Score  : 76 points
       Date   : 2022-05-15 07:57 UTC (2 days ago)
        
 (HTM) web link (theconversation.com)
 (TXT) w3m dump (theconversation.com)
        
       | lacker wrote:
       | The big question in semiconductors is what will happen to the
       | China-Taiwan situation. China has repeatedly stated that they
       | intend to reunify with Taiwan by 2049 for the 100th anniversary
       | of their communist party. I think they will probably try. If
       | there's fighting then there's a good chance that TSMC ends up
       | destroyed. Refugees can flee, physical plants can be destroyed.
       | 
       | So if TSMC is destroyed, what happens to everyone downstream who
       | depends on semiconductors? We probably end up both delaying
       | products for years and giving Intel boatloads of money thinking
       | "I sure hope they can scale up their only-three-years-behind
       | technology quickly."
       | 
       | So we should subsidize Intel to keep improving their currently-
       | uncompetitive technology. This isn't the same as most "we should
       | make things in America" complaints, it's a contingency plan for a
       | specific, reasonably likely intense disruption to the world of
       | technology.
        
         | User23 wrote:
         | > This isn't the same as most "we should make things in
         | America" complaints
         | 
         | How is it any different? There is a strategic argument for
         | onshoring pretty much anything that isn't utterly frivolous
         | like fidget spinners and such. Look how effectively Europe's
         | need for energy has undermined the Russia sanctions. The Ruble
         | is stronger than it was before the invasion!
         | 
         | It's nice not to be vulnerable to foreign embargoes of food or
         | energy, just to name a couple important strategically important
         | things besides semiconductors.
        
           | bsder wrote:
           | > There is a strategic argument for onshoring pretty much
           | anything that isn't utterly frivolous
           | 
           | I would probably adjust that to "onshore anything that takes
           | longer than <insert number of years> to spin up".
           | 
           | You can spin up funiture factories in a year or less. You
           | probably don't need them onshored. A steel mill probably
           | takes 3-5 years. You probably should have a local
           | alternative. You can't spin up ASML in less than 10 years.
           | There _definitely_ should be a local ASML alternative.
        
           | mywittyname wrote:
           | > anything that isn't utterly frivolous like fidget spinners
           | and such.
           | 
           | This frivolity is exactly what countries need to do if they
           | want to manufacture at the level China is. Fidget spinners
           | were built as a way of scaling up the manufacturing of very
           | high-tolerance bearings, and selling them in the USA for $5
           | helped ensure that every American involved in manufacturing
           | understood just how adept China had become.
        
         | ant6n wrote:
         | > We probably end up both delaying products for years and
         | giving Intel boatloads of money thinking "I sure hope they can
         | scale up their only-three-years-behind technology quickly."
         | 
         | It's weird, five years ago they were two years ahead of
         | everybody.
        
         | bagacrap wrote:
         | Isn't tsmc building fabs in Arizona and Japan?
         | 
         | I don't think China will invade Taiwan but what do I know. Is
         | it really worth the risk of being cut off from international
         | trade and banking the way Russia has been? If China invades and
         | there's an international embargo of Chinese goods,
         | semiconductors are but one small part of the havoc that would
         | ensue.
        
       | [deleted]
        
       | hristov wrote:
       | It is amazing how much incorrect analysis this global chip
       | shortage has brought about. The situation with intel is complex
       | but I will bring out the simplest error in this analysis.
       | 
       | Chips are not like oil, or steel or wheat. A chip shortage is a
       | very different beast than an oil or wheat or iron ore or copper
       | shortage.
       | 
       | Lets say that there are 500 different chips in a device. This is
       | not an exaggeration. If you are short of chip #203 you cannot
       | throw an extra couple of pieces of chip #205 instead. These chips
       | are different and the exact ones are needed. Furthermore, many of
       | these chips are made using different processes in different fabs,
       | so you cannot slow down manufacture of chip #205 to make some
       | extra ones of chip #203.
       | 
       | So that is the first thing to keep in mind in terms of the chip
       | shortage. Currently the chips that are in shortage are mostly
       | things intel does not make. To the best of my knowledge chips in
       | shortage are power electronics, power discrete, power management
       | ics, networking ics and industrial/auto/medical grade
       | microcontrollers. If someone had updates to this list, please
       | comment below.
       | 
       | The thing about the chip shortage is, that if there is a shortage
       | in something you do not make, it is not necessarily a good thing.
       | That may mean that your client will make fewer devices because
       | they do not have that chip #203, and you will be able to sell
       | them fewer of your chip #205.
       | 
       | Of course intel has some very serious issues but this chip
       | shortage argument is just wrong.
        
         | bobajeff wrote:
         | The chips used Raspberry Pi's.
        
           | hristov wrote:
           | The great rasppberry pi shortage is probably caused by
           | shortages of power electronics and networking chips.
        
             | karmicthreat wrote:
             | If that was the case the compute modules would be
             | unaffected. You can't get even those right now either.
        
               | akiselev wrote:
               | The compute modules only has a 5V input, which it must
               | convert to the voltages used by the CPU, RAM,
               | peripherals, etc. using aforementioned power ICs. A
               | modern CPU like the BCM2711 usually has several different
               | voltage domains that must be supplied by the PCB
               | designer, ranging from 1.2v to 3.3v.
        
               | somebodythere wrote:
               | There is a fab space shortage. The cost to manufacture
               | goes up and so only the highest volume, highest margin
               | chips get made.
        
         | mjevans wrote:
         | An analogy that might work for most people:
         | 
         | Cars?
         | 
         | Intel is one of the manufacturers of engines, but they only
         | make the literal engine block, maybe some pistons too. However
         | cars have all those other tubes, wires, and side bits in the
         | engine compartment and in the hidden parts of the body.
         | 
         | It's not the engine, but the specially sized and specially
         | rated tubes around the engine. Those parts that everyone
         | thought were dirt cheep, so people stopped making enough of
         | them.
        
           | missedthecue wrote:
           | This is pretty good and helped me understand.
        
       | incomingpain wrote:
       | Haven't checked Intel's stock in quite some time. I am familiar
       | with their RISC-V moves and big future plays.
       | 
       | Market Cap 180 billion sounds great.
       | 
       | PE ratio of 7.3...
       | 
       | WOW. People are heavily predicting major crash on intel. Very
       | nice dividend as well... so they aren't attracting people?
       | 
       | 15 billion/year into R&D is pretty comfy.
       | 
       | Gain on Sale of Security 6,823million
       | 
       | Good and increasing EPS, consistently beating estimates.
       | 
       | total assets are going up very well.
       | 
       | total debt is going up and is a bit high.
       | 
       | Their financials look good. I dont see why their PE ratio would
       | be sooooooo low.
       | 
       | 0.06% % of Shares Held by All Insider
       | 
       | Oh. Intel is probably just skittering by, and it's really the
       | everything bubble that's the problem? Might make sense.
       | 
       | I think the bigger reality? They label their assets as 168
       | billion and their market cap is 180 billion? Can we talk about
       | bankruptcy?
        
         | mywittyname wrote:
         | Intel isn't successful in the fields that "the market" thinks
         | are the future.
         | 
         | ARM is slowly chiseling away at their market share on the
         | general purpose end of the spectrum. It's pretty clear that
         | Apple intends to move completely away from Intel as some point
         | in the near future.
         | 
         | Nvidia has heavily outpaced them in the AI computing space.
         | Data centers are filling up with racks of five-figure Nvidia
         | cards. Intel was never competitive in the gaming sector, so
         | there's no evidence to suggest they could ever catch up.
         | 
         | Even in their home turf of legacy PC chips, there is strong
         | competition from AMD.
         | 
         | I can see why people aren't expecting huge growth from Intel in
         | the future. There isn't an obvious growth market that they are
         | primed to take.
        
         | specialp wrote:
         | It is the same reason companies predicted to have large growth
         | have higher PE multiples. A PE of 6 indicates that the market
         | does not believe Intel will be able to keep this level of
         | earnings in the future.
         | 
         | Here are some of the factors:                  * Getting beat
         | in manufacturing by TSMC        * Competition in X86
         | infrastructure from AMD        * Centralization of the
         | lucrative server market into a few very large players that are
         | fabricating their own ARM based chips (IE AWS gravitron)
         | * X86 no longer having the same moat as ARM mobile domination
         | has made many major libraries,languages and frameworks work
         | just as well with ARM.        * Recent track record of failing
         | to respond to such challenges in a competitive way
         | 
         | Of course they could turn this around and keep making insane
         | profits, but that is what the market is thinking at the moment.
        
       | whatshisface wrote:
       | These analyses always focus on M&A, outsourcing, and that kind of
       | business stuff while completely ignoring the decades of
       | disgruntled engineers that left Intel to its present fate. Intel
       | engineering was mismanaged for years and now they are paying the
       | price.
        
         | pjmlp wrote:
         | Because that is what matters when it comes down to money, and
         | Intel has plenty of it to burn, and pattents, regardless of ARM
         | and AMD groupies wish for.
        
         | CoastalCoder wrote:
         | That occasionally gets mentioned here [0]
         | 
         | [0] https://www.thelayoff.com/intel
        
         | fakeslimshady wrote:
        
         | duped wrote:
         | > ignoring the decades of disgruntled engineers that left Intel
         | to its present fate
         | 
         | Not to mention the layoffs of thousands of the most senior and
         | experienced staff. Talk about cutting off your nose to spite
         | your face.
        
           | booi wrote:
           | A lot of people look at R&D and investment in things like
           | fabs and process as the way forward but I feel like what you
           | mentioned is the main problem.
           | 
           | Intel has been leaking and practically ejecting their best
           | and most experienced talent to "maintain profitability". The
           | brain drain will be their biggest problem and courting the
           | best talent takes a lot of time and isn't something you can
           | necessarily throw a bunch of money at.
        
             | duped wrote:
             | Anecdotally they are deepening their bench right now, but
             | it's hard to make up for the mistakes of the past decade.
             | 
             | Recruiting however is great for a company like Intel today,
             | because of the ongoing tech crash it's getting really hard
             | to get good people to join riskier companies. Intel is big,
             | stable, rich, and too big to fail.
        
               | whatshisface wrote:
               | Intel also has a reputation for translating its success
               | in good times to layoffs for individual engineers... so
               | what does that imply about your risks at Intel in bad
               | times?
        
               | brewdad wrote:
               | The largest of those layoffs happened during Intel's
               | years in the wilderness when Finance guys ran the
               | company. Engineers are back in the executive leadership
               | now, so hopefully they understand the folly of those past
               | actions.
        
       | UncleOxidant wrote:
       | Isn't this because Intel under-invested in R&D over the last
       | several years and Gelsinger is (rightly, it seems) saying he
       | needs to invest a bunch of money to catch up?
        
         | mfer wrote:
         | It's not just R&D. They are opening their chip making
         | facilities to the designs of others and increasing their
         | ability to produce chips. All of that takes capital investments
         | and it's a new line of business. Much of this isn't R&D but
         | about building out capacity and processes for this new area.
        
         | ldiracdelta wrote:
         | I don't think they under-invested with sheer magnitude of
         | money. The money is plentiful at Intel. It seems like they need
         | better leadership, which hopefully they have in Gelsinger.
        
         | Traster wrote:
         | It wasn't under-investment, it was lack of focus. They spent
         | their time running after new growth opportunities at the cost
         | of their core business. They wanted to do IoT (low power
         | they're not particularly good at and the margins are awful), 5G
         | (they had some success here) and autonomous driving (some
         | success but still comparatively tiny). Meanwhile their core
         | business started to fail.
        
       | sylware wrote:
       | This is stategic. Making money out of it is optional (like
       | defence).
        
         | ska wrote:
         | It's arguably strategic to have domestic capacity, sure. It
         | doesn't have to be Intel.
         | 
         | Giving a company even the vague belief, let alone the
         | certainty, that it won't be allowed to fail is a stunningly bad
         | idea.
        
           | lacker wrote:
           | Who else can it be besides Intel? I don't think it even needs
           | to be "domestic", per se, it just needs to be in a country
           | that isn't extremely likely to be invaded by China.
        
             | Symmetry wrote:
             | IBM had bleeding edge fabs not too long ago and is still
             | involved in the research if not the mass production side.
        
             | bee_rider wrote:
             | Hmm. I think it depends on the application. Defense isn't
             | HPC, right? They can probably get by on 22nm or so for most
             | applications, so GlobalFoundries might be able to handle
             | it.
             | 
             | Or, heck, Texas Instruments might be able to handle some
             | chips (obviously they aren't cutting edge on the digital
             | logic process node side, but they so all the funky analog
             | stuff and they'll keep making a design for, like, a
             | bazillion years, which may be appealing to the military).
        
       | lvl102 wrote:
       | I was bullish on Intel all of last year but I think it's
       | effectively dead money until 2024-25. Between AMD and Apple,
       | Intel is so far behind. Their GPU launch is also an indication
       | that they are very disorganized.
        
         | Melatonic wrote:
         | Profits are still decently high and they have the capital to
         | basically subsidize their own chips (as they have done in the
         | past) to keep their market up.
        
       | thunderbird120 wrote:
       | I swear HN's discussions on anything Intel related are always
       | bottom of the barrel. They've been very clear about their
       | messaging over the past few years. They are currently spending
       | large amounts of money on capital expenditures to ensure future
       | competitiveness and that eats into profits. The lack of increased
       | profits during this current chip shortage is not a surprise to
       | anyone paying attention nor is it indicative of anything
       | particularly catastrophic for Intel.
       | 
       | From Reuters
       | 
       | >Intel Corp expects its profit margin to drop this year and then
       | be steady for several years as it invests in new technologies and
       | factories to meet rising chip demand, but added it forecasts
       | climbs from 2025.
        
         | mhh__ wrote:
         | Hackernews and reddit discourse seems to desperately want to
         | believe the Intel vs. AMD, blue versus red, style narrative.
         | 
         | Maybe Intel deserve it, I don't know, but it's silly to think
         | these companies are your team.
        
         | mbesto wrote:
         | Agreed.
         | 
         | > They are currently spending large amounts of money on capital
         | expenditures to ensure future competitiveness and that eats
         | into profits.
         | 
         | Which is precisely why understanding more than just an Income
         | Statement (i.e. Earnings) is important to understanding how
         | much companies "make".
         | 
         | Hilariously this article was published in Jan. Intel just
         | (April) recorded its highest quarterly earnings ($8B).
         | 
         | https://www.intc.com/news-events/press-releases/detail/1541/...
         | 
         | Financial media is such a trash-heap.
        
         | jchw wrote:
         | Not seeing the bottom of the barrel discussion you're referring
         | to, in fact someone else already pointed this out. However, I
         | really feel like this viewpoint is too charitable still. Sure,
         | they are definitely investing in R&D to stay competitive, and
         | that has eaten into profits. What exactly does that say about
         | their corporate strategy before recently? If you really put two
         | and two together, it's hard to come up with anything but the
         | most cynical answer: they cut R&D too short and maximized short
         | term profits like crazy.
         | 
         | I don't feel like it's any more reasonable to take Intel's own
         | rhetoric at face value any more than NVIDIA or AMDs. They're
         | all trying to paint the best picture for investors.
         | 
         | Plus, none of this really discounts the valid points from the
         | article either...
        
           | thunderbird120 wrote:
           | >What exactly does that say about their corporate strategy
           | before recently?
           | 
           | I get the impression that people think that Intel's
           | stagnation after 14nm was due to complacency and the desire
           | to avoid taking risks. That is literally the exact opposite
           | of the truth because almost all of their problems with the
           | 10nm node stemmed from it being far too ambitious. It
           | incorporated a large number of extremely cutting edge
           | technologies which were leaps ahead of anything else being
           | attempted at the time. This over-ambition lead to nearly half
           | a decade being wasted because, as it turns out, they were a
           | bridge too far. If Intel had been able to pull off what they
           | originally intended with 10nm when they intended it they
           | would have been absurdly far ahead of all of their
           | competition but unfortunately that choice actually resulted
           | in them falling behind.
        
             | Symmetry wrote:
             | Word on the street is also that the 14nm death march
             | resulted in a lot of engineers taking early retirement
             | which left them in a worse position to pursue 10nm.
        
               | Sakos wrote:
               | From what I've heard, that was Intel's doing. They
               | intentionally pushed older engineers into early
               | retirement to save money.
        
               | AlexandrB wrote:
               | "These geese lay nice, gold eggs but cost too much to
               | feed. Let's get rid of them."
        
               | xadhominemx wrote:
               | Well the old guard were the ones who screwed up 14nm, so
               | were they really the geese?
        
             | wtallis wrote:
             | The _first_ half of their post-14nm stagnation was because
             | they were overly ambitious for 10nm. But the second half of
             | that era was because of their hubris, denial that things
             | weren 't going to plan, and inability to adjust plans. They
             | eventually admitted defeat (to some extent) and back-ported
             | one of their 10nm designs to 14nm as a stopgap, but they
             | started that effort at least two years later than they
             | should have.
        
             | jchw wrote:
             | I'm not denying most of that, but it feels extremely one-
             | sided. I feel like I'm reading Intel investor relations
             | right now. I am not suggesting Intel was _not_ working on
             | cutting edge technology, but so were other companies, and
             | some of them succeeded where Intel failed. Meanwhile, Intel
             | had multiple business units with similar issues, especially
             | their modem business, and I doubt the postmortem said
             | "Oops, we were too ambitious!" Bullshit. They had
             | organizational issues and complacency. I'm sure 10nm was
             | plagued with _many_ problems that weren't complacency too.
             | That's part of the table stakes when you are in the
             | business of defying physics.
             | 
             | The financials tell a different story.
        
               | xadhominemx wrote:
               | Intel's process technology lead was the core of their
               | strategy and explains 95% of what's gone wrong. The 5G
               | modem design was an irrelevant sideshow that had no
               | impact on 10nm.
        
               | jchw wrote:
               | I'm not suggesting the same exact thing happened, but
               | it's hard to believe there weren't some overarching
               | management issues going on, and it seems likely they
               | contributed to problems further down the line. A couple
               | blunders could've been a fluke, but I think we're past
               | the "it could've been a fluke" stage.
               | 
               | Of course, this is all pure conjecture, but nobody can
               | really be all that sure. I'm sure even people at Intel
               | have differing opinions about what was wrong.
        
             | bee_rider wrote:
             | In this case, we'd expect them to have gotten some R&D out
             | of those overambitious failures, right? So we should hope
             | to see some really snappy progress in post-10nm nodes?
        
             | Melatonic wrote:
             | People forget that around the 14nm timeline Intel was
             | completely DOMINATING in terms of performance. And this was
             | not THAT long ago. Will be interesting to see where
             | everything is in 2 years
        
         | Sakos wrote:
         | > They've been very clear about their messaging over the past
         | few years
         | 
         | They were very clear about "finally" shipping 10nm every year
         | for half a decade. Their messaging doesn't mean squat. I'm not
         | sure why there are still people who believe everything Intel
         | says.
        
         | wtallis wrote:
         | > nor is it indicative of anything particularly catastrophic
         | for Intel.
         | 
         | Well, it's indicative of the slow-moving catastrophe that was
         | their 10nm farce. Intel is spending a lot of money to recover
         | from that, because they need to make drastic changes to regain
         | their dominant position. If they weren't sacrificing profits in
         | a big way right now, the most reasonable expectation for their
         | future would be an IBM-style slow decline from relevance.
        
         | etempleton wrote:
         | Intel stumbled pretty hard, but they seem to have self-righted.
         | The fact that their stumble didn't really cost them all that
         | much is a testiment to the company.
        
         | scarface74 wrote:
         | There "messaging" can be anything they want. By missing mobile,
         | they are stuck just competing in the PC space which is
         | minuscule compared to mobile.
         | 
         | There are about 280 million PCs sold in a year.
         | 
         | https://www.gartner.com/en/newsroom/press-releases/2021-01-1...
         | 
         | Apple alone will be selling that many ARM chips in a year
         | between phones, tablets, computers, set top boxes, monitors
         | (the latest displays have the same processors that are in the
         | iPhone 11), etc.
         | 
         | Apple is only 15% of the phone market. All of the major cloud
         | providers are trying to move to ARM wherever possible.
         | 
         | The world is moving toward more power efficient chips.
         | Something Intel can't do.
        
         | sidewndr46 wrote:
         | The reason why this comes up is Intel historically as a company
         | built it's market dominance on it's manufacturing processes.
         | This in turn lead to profitability.
         | 
         | I'll use Intel's advertised sizes for processes below, but keep
         | in mind that a smaller number just represents a new
         | manufacturing process. Not that actual size.
         | 
         | Intel switched to a FinFET process with its "22nm node" in
         | 2011, then a few years later in 2014 switched to a "14nm node"
         | that is also FinFET. That was effectively the last profitable
         | manufacturing innovation for Intel. A "10nm node" certainly
         | exists, but is practically a black hole of money when you
         | consider the time invested on it and just how far behind they
         | are at this point.
         | 
         | The only concrete thing Intel did to address this was to just
         | rename all their process nodes to be smaller. That's basically
         | it. A few years from now is a full decade that Intel will have
         | spent without actually introducing a new profitable
         | manufacturing process. You can make all the press releases you
         | want about how it'll be profitable "one day", it doesn't change
         | the fact that Intel can't really seem to design new
         | manufacturing processes.
         | 
         | Intel effectively watched the manufacturing technology move
         | past them and shrugged. The proposed solution to this is to
         | spend several more years doing basically the same thing, but
         | this time they'll hope they get it right. This is magical
         | thinking.
        
           | phkahler wrote:
           | And they renamed 10nm to Intel 7, but it is not EUV. Both
           | TSMC and Samsung have moved to EUV, and until Intel does as
           | well they are going to remain behind. All that money spent is
           | nice, but until they start taking delivery of tons of
           | equipment from ASML it's not going to help them at the
           | leading edge.
        
             | selectodude wrote:
             | EUV is a tool, not a process. TSMC N5 isn't 100 percent EUV
             | either. Intel can hit similar feature sizes with Intel 7 as
             | TSMC can but it requires more steps, hitting their margins
             | and lowering their yields. The chips that come out of the
             | other end are equivalent though.
        
               | avs733 wrote:
               | > EUV is a tool, not a process.
               | 
               | It's kinda both. To be clear, EUV directly refers to a
               | specific type of lithography equipment, ones using
               | extreme UV light sources. However, those changes come
               | with a lot of changes in larger process flow that are all
               | inter-related.
               | 
               | The change in EUV means smaller lithography lines, and
               | also means needing photo resist, etching, cleaning, etc.
               | - many other process steps, that support that size
               | change. Add in that now, with EUV lithography, you are
               | operating lithography under vacuum and its a _huge
               | challenge_. Suddenly you have to have vacuum ready
               | materials.
               | 
               | One of Intel's mid 2010 wins was getting immersion litho
               | to work better than peers - similar thing just wet wafers
               | rather than vacuum wafers.
               | 
               | EUV is a tool/technology, one used only on critical
               | layers where that precision matters (e.g., gate
               | patterning). But the larger (entire) manufacturing
               | process has to be designed to enable the use of that
               | tool/technology.
        
             | ENOTTY wrote:
             | EUV is coming with the Intel 4 process node. Intel is also
             | the lead customer for ASML's High-NA EUV, which is supposed
             | to be the next generation EUV.
        
             | bcrl wrote:
             | Leading edge processes are not where the shortage exists --
             | it's trailing process nodes that are used heavily for
             | support chips and automotive. Support chips like voltage
             | regulators sure as hell don't need a 5nm or 7nm process,
             | but they are critical components to any piece of
             | electronics being able to ship. Older processes are ideal
             | for these needs because they are very well characterized /
             | understood, making them excellent for chips with an analog
             | component. And older processes were cheap until demand
             | exceeded supply.
             | 
             | Edit: and Intel doesn't and won't play into the market for
             | support chips. There's no way in hell that they can support
             | Intel's required profit margins.
        
               | picture wrote:
               | To add on: Older processes also have lower static current
               | consumption due to less leakage from bigger features.
               | They are quantitatively better in many applications for
               | low power or high precision.
        
           | Melatonic wrote:
           | I don't think the average user or custom cares all that much
           | about what node they are actually on. Yes, of course battery
           | life and efficiency matters. But if Intel can make some
           | decent incremental improvements I just don't see them
           | completely going away.
           | 
           | AMD and Intel have been trading the throne for years and
           | every single time everyone says one of them is about to die.
           | Yet here we are.
        
           | guelo wrote:
           | I wouldn't say they shrugged, they tried but this stuff is
           | hard. It was an engineering failure. Though engineering
           | failures are often caused by organizational failures.
        
             | sidewndr46 wrote:
             | Not just engineering. I listened to an earning's call once.
             | The CFO or someone in that area was claiming that "14nm was
             | the most profitable process ever!". My thought was "well
             | yes, it's also the most long lived process. I'd hope you
             | haven't been operating at a loss for all these years"
        
         | mfer wrote:
         | There is a balance a business needs to keep. Under spend on
         | your future (e.g., R&D) and you'll have higher profits. Until
         | you don't have something great to sell in a few years. It's
         | short term. Over spend on the future and you won't have money
         | for your share holders which they won't like.
         | 
         | Intel is expanding what they do (i.e. fabing chips for others).
         | This is a business opportunity that wan't overly visible a few
         | years ago. Global economics have changed and that presents a
         | new opportunity they are positioned for and jumping on.
         | 
         | They also under invested in R&D. Many companies do and go
         | through cycles of it. They are playing some catch up. But, they
         | seem to be serious about it which is good in many respects.
         | 
         | If you're a short term share holder you might not like it
         | because there are lower short term profits. If you're a long
         | term share holder you might like it because they'll have a more
         | diverse portfolio and better future product (and sales)
         | potential.
        
           | scarface74 wrote:
           | Fabing for others has been visible for decades. Apple tried
           | to get Intel to fab its ARM processors in 2007. But Intel
           | thought that the margins were too small.
        
         | [deleted]
        
         | colinmhayes wrote:
         | Also, it's really not like Intel is doing badly profit wise.
         | They made $20 billion last year. That is 125% of AMDs entire
         | revenue and 75% of nvda's. All this talk of growth opportunity
         | for nvda/amd seems to ignore that the pretty much best case
         | scenario for them is to become what intel already is
         | profitability wise.
        
           | knotofvipers wrote:
           | They also only have a P/E of 7.3 with a 3.3% dividend yield.
        
             | whatshisface wrote:
             | That's stock market language for low expected growth in a
             | company that is doing OK now but doesn't look good in the
             | future.
        
           | scarface74 wrote:
           | More like 11.2 billion in free cash flow
           | 
           | https://www.intc.com/news-events/press-
           | releases/detail/1522/...
        
       | carlycue wrote:
       | Intel is done. Gelsinger can do his best to rally the troops but
       | it's too late to catch up with Apple Silicon. The M1 came out in
       | 2020 and Intel is still unable to match it. The M2 is coming this
       | year, leaving Intel ever further behind.
        
         | mugivarra69 wrote:
        
           | malfist wrote:
           | Apparently not benchmarks
        
         | ejb999 wrote:
         | then again, not everyone runs on a mac, and won't be anytime
         | soon.
        
           | xwdv wrote:
           | Doesn't matter.
        
             | ejb999 wrote:
             | right, because the millions of computers in corporate
             | America running windows are all just going to be thrown out
             | and converted to m1/m2 macs.
             | 
             | I prefer mac, and use them everyday, but the prediction of
             | the death of intel are premature. They don't need to be
             | faster than M1s or M2s, they just need to be at least as
             | fast, or faster than what people need them to be to surf
             | the web, create spreadsheets and power points and run all
             | that legacy enterprise software that only runs on windows.
             | 
             | Macs are better, but they are much more expensive on
             | average; were I work (mega-corp), I can order a new windows
             | machine whenever I want - if I need to get or upgrade my
             | mac, it needs to be justified and approved two levels up
             | from me, and really only developers and some graphics folks
             | ever get approval - and my company probably buys/replaces
             | 30K-40K machines every year 99% of which are running
             | windows on intel.
        
               | [deleted]
        
         | dboreham wrote:
         | I'm so old I've seen many of these cycles where some new CPU
         | blew everything else away and everyone said the competitors
         | were done. Most of these "competitor-killer" CPUs are not even
         | remembered today (HP PA-7000 anyone?)
        
           | pram wrote:
           | PA-RISC will be remembered forever in the hearts of many:
           | 
           | https://youtu.be/VLTh4uVJduI
        
           | scarface74 wrote:
           | The difference is their competitors neither had the volume or
           | the margins to stay competitive. Mobile is much larger than
           | desktop/server.
        
           | sophacles wrote:
           | Intel even did it to themselves. Itanium was supposed to be
           | an x86 killer iirc.
        
             | booi wrote:
             | Itanium didn't work but not only because of hardware. They
             | didn't invest nearly enough in developer relations,
             | compiler tech, contributions to other compilers and working
             | with Microsoft to ensure a good landing spot for their
             | tech.
             | 
             | That and huge die sizes which in turn resulted in high
             | prices just didn't make it competitive considering all the
             | other stuff.
        
           | madengr wrote:
        
         | Remnant44 wrote:
         | It's extremely possible for a product to be strictly dominated
         | by another on technical merits and still be successful.
         | 
         | "Intel is done" because Apple produced a great chip focuses on
         | only one small (albeit very important!) part of the puzzle.
        
         | intricatedetail wrote:
         | I hate Apple, but every time I run something resource intensive
         | on my laptop and it starts to sound like a plane going to take
         | off I go to Apple.com and hover over Check out button. Once
         | there is a reliable way to run Linux on M1/2 I'll switch.
        
           | tails4e wrote:
           | If you run msoffice apps on a mac you'll be burning cpu like
           | no ones business. I've a 2019 macbook pro 16, fans rev up
           | regularly as excel (or power point, or word..) is using 100%
           | cpu. The mac window manager process is a hog also. Honestly I
           | switched to mac for work assuming "it just works" , but
           | unfortunately it does not. M1 are likely better, but not
           | overly impressed on the SW side.
        
           | scarface74 wrote:
           | Why do you think that Linux would run as fast or efficiently
           | on an M1 Mac as an operating system that was designed from
           | the ground up to run well on it?
        
             | didibus wrote:
             | I don't think it's about running faster, clearly OP wants
             | to use Linux over MacOS, same for me. For dev work Linux is
             | still king, and I happen to also personally prefer the KDE
             | UX over MacOS.
             | 
             | So while Mac laptops are great hardware wise, it doesn't
             | run the software I want, so that's why I'm still buying
             | laptops made for Windows.
        
               | pjmlp wrote:
               | Except when dev work means anything related to graphics
               | programming, than the king is naked.
        
               | marcosdumay wrote:
               | > graphics programming
               | 
               | You mean as in Vulcan and games, or rendering? Linux is
               | your best choice unless you are using some Windows first
               | framework like Unity. (AFAIK there is no OS X first one.)
        
               | pjmlp wrote:
               | That answer only reveals the lack of knowledge of the
               | state of the art in GUI and 3D graphics tooling in
               | general.
               | 
               | To your information all relevant middleware supports
               | Metal, like Unity and Unreal.
               | 
               | Isn't great that the "best choice" needs to rely on
               | workarounds like Proton, and Electron apps, and gets zero
               | ports from Android/Linux.
        
               | sorry_outta_gas wrote:
               | I'm not so sure about that I work in graphics and we're
               | 99% linux
        
               | pjmlp wrote:
               | Welcome to the 1% of the desktop market in games and
               | graphics, the market worthy of a king.
        
               | marcosdumay wrote:
               | Hum... You know you don't need to program on the same
               | platform that your game will run, right? (I still don't
               | know what you mean by "graphics", since it's not games.)
               | 
               | Otherwise creating a mobile game would be pretty insane.
        
             | lvl102 wrote:
             | For devs, MacOS is still pia. Asahi is still far behind. I
             | just don't get why Apple wouldn't embrace Linux. Who's
             | stopping that from happening now that Jobs is gone?
        
               | scarface74 wrote:
               | What benefit does Apple get by "embracing Linux"?
               | 
               | And more "devs" are using Macs than Linux so it must not
               | be too bad. That's not even to mention that Android
               | developers are saying Macs are fasted for development
               | than x86 PCs and of course iOS developers are using Macs.
               | 
               | What benefit is there in "embracing Linux" for Apple?
               | Better software? Better hardware support? Popularity?
        
       | namelessoracle wrote:
       | Intel got MBA'ed just like most American companies. Will be
       | interesting if/when it will happen to Apple.
        
         | xadhominemx wrote:
         | Intel's woes were caused by poor engineering decisions. Apple
         | has been run by MBAs for 10 years and is more successful than
         | ever.
        
           | MichaelZuo wrote:
           | No, Apple's top leadership are all operations people or
           | engineers, plus general counsel. The fact that some spent 2
           | years at an mba school doesn't make them forget their 4 years
           | of industrial engineering/operations/supply chain undergrad.
           | 
           | Way different from most people who get MBAs.
        
       | jonplackett wrote:
       | Question: why is it that Intel can't just poach a bunch of the
       | best TSMC engineers and catch up that way?
       | 
       | Is it a lack of knowledge how to do this manufacturing? Or is it
       | more like a skills shortage of engineers to do the actual
       | manufacturing?
       | 
       | Where exactly is it in the process that they can't compete, and
       | why is it so hard to catch up, given their virtually infinite R&D
       | budget.
        
       ___________________________________________________________________
       (page generated 2022-05-17 23:02 UTC)