[HN Gopher] For its big comeback, Intel needs to spend money, an...
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For its big comeback, Intel needs to spend money, and it's making
less and less
Author : rntn
Score : 78 points
Date : 2022-10-29 15:15 UTC (2 days ago)
(HTM) web link (www.theregister.com)
(TXT) w3m dump (www.theregister.com)
| v3ss0n wrote:
| It should , I remembered one intel developer posted here that
| intel manager writes tests in big word file.
| prng2021 wrote:
| I don't think the situation is that dire for Intel. AMD was in a
| much worse competitive position not that many years ago.
|
| An industry wide slowdown will affect all companies mentioned in
| the article. Intel has over $25B cash on hand and history has
| shown investors are willing to let companies (ie Uber) lose many
| billions every quarter for a long term return.
|
| AMD and Intel have been flip flopping on who creates the best
| cpus for decades. I'm sure that has been the result of a mix of
| great engineering talent as well as luck during R&D. I have no
| doubt this battle is going to continue for many more decades.
| hericium wrote:
| intel went down, back to their 2014 price with, what looked
| like, one corrupted board after another.
|
| The comment my "about" quotes resembles investors' emotions
| rather well. And markets are - at least currently - not very
| reasonable.
|
| Also: AMD and RISC-V.
| Avlin67 wrote:
| x86 is the way to go and will be the best at least for the 10
| next years... intel needs some time but I dont worry
| xiphias2 wrote:
| I switched to M1 laptop from Windows when it came out and I'm
| not planning to go back.
|
| I'm waiting for the next TSMC process node for my next laptop
| purchase.
| lloydatkinson wrote:
| Did you not try Windows on M1?
| UncleOxidant wrote:
| Not sure how you can say 'x86 is the way to go' for the next 10
| years given how much progress Apple has made with it's M*
| processors over the last few years. Sure, Apple keeps all of
| it's processors to itself, but if they were able to do this
| over a few years, others surely will be able to as well.
| uri4 wrote:
| Come back to where? Are CPUs gold mine? It is saturated and
| highly competitive market. Maybe they achieve leadership again in
| performance or some other metrics, but how would that turn into
| profits?
| theturtletalks wrote:
| Maybe they should go all in on RISC-V or another open-source
| instruction set and get ahead of what's going to be the future
| of chips in the long run.
| monocasa wrote:
| This is what I've been saying for a while would happen about when
| AMD ended up on TSMC 5nm if Intel was still sitting on Intel 7
| (nee Intel 10nm++++++). They'd immediately lose that high margin
| data center money and no longer be able to keep the lights on for
| litho R&D exactly when they need it most to come back.
| brookst wrote:
| Intel's in trouble, but they will have no difficulty sourcing the
| cash for any investments that promise to reverse the trend. The
| terms might be better or worse, but it's not like Gelsinger is
| going to have a great plan that just needs $20B and it just sits
| on a shelf because the investment can't be sourced.
| tenpies wrote:
| Agree.
|
| One perspective that I'm amazed hasn't become obvious to
| mainstream yet is that there are a growing number of private
| companies where are functionally extensions of the US
| government. Everyone knows about the US military-industrial
| complex, but they haven't clued in that the complex has grown
| and companies like Intel fall under that umbrella now. The
| CHIPS Act should have been a huge clue to anyone paying
| attention.
|
| As long as the US government stands, regardless of who is in
| office and what letter is next to their name, Intel will not
| ever fail.
| reducesuffering wrote:
| Intel may not ever fail, but that sure doesn't mean
| shareholders will reap any rewards. Boeing won't fail either,
| but has been losing huge chunks of money every quarter for 2
| years now.
| UncleOxidant wrote:
| Intel should probably think about reducing the dividend and
| focusing on plowing that money into investment in their
| business for a while.
| pavlov wrote:
| That would destroy the stock price, and executives get paid
| largely in stock.
| brookst wrote:
| Precisely this. As an executive, it is better to pay
| dividends and have the company borrow if needed.
| kypro wrote:
| Not agreeing or disagreeing, but have you seen the stock
| recently? Surely at some point you have to ask if it makes
| stop prioritising the stock price and investors, and
| instead focus on the long-term sustainability of the
| company?
| pavlov wrote:
| I've been watching both Intel and Meta stock with
| interest. They're in a fairly similar situation. The
| reason why Intel trades at a P/E of 15 while Meta is
| hovering around 10 must be mostly the dividend. The
| market doesn't trust Zuck but it still has some trust in
| Gelsinger to somehow balance the dividend with the
| massive fab investments.
|
| If Intel gives up on the dividend, they could be down
| another 30-40% to Meta-like P/E levels.
| rossmohax wrote:
| Meta is doing buybacks, which is just another form of
| dividend, so in that regard they are not that different.
| dnadler wrote:
| It would just be a question as to whether the
| reinvestment would be expected to yield a high enough
| return. Theoretically, at least, if the dividend is being
| repurposed for investment _and_ the market believes that
| that reinvestment will drive enought growth, then the
| stock price could stay flat or even go up. Especially in
| the current environment where there aren 't many good
| places to invest capital.
|
| I'd think that scenario is fairly unlikely though, and in
| any situation where the dividend goes away volatility
| will certainly go up.
| parenthesis wrote:
| But Intel would presumably be investing the forgone
| dividends in something that looks better to investors
| than the metaverse moneypit.
| scarface74 wrote:
| Not only do the markets not trust Zuckerberg. But since
| he still has a controlling stake in the company, the
| stock should trade at a steep discount since stockholders
| have no say in the company.
| drowning-secs wrote:
| StillBored wrote:
| Yah, they should have been panicking four years ago. They can
| probably come back, but i'm betting in order to do it, they will
| have to temporary shift their higher margin devices to TSMC's
| more advanced process to keep up or just accept being second
| fiddle for a while. The question is whether all the cuts required
| to do that kill the company as they are forced to exist on the
| low margin devices they have been shunning for the past 15 years.
| bee_rider wrote:
| We better hope they come back. TSMC is a really impressive
| company, but we can't let _one company_ be entirely responsible
| for a part that is require for an advanced economy.
| sounds wrote:
| I model it like a sovereign default risk, only the sovereign
| is a corporation.
| cma wrote:
| ASML is a bigger single point of failure, since they make the
| machine most critical to any modern fab from Intel, TSMC, or
| Samsung.
| bee_rider wrote:
| Sure. Intel and their competition sell directly to
| consumers, so any tech savvy person is at least vaguely
| aware of their relative positions in the market. I'm less
| familiar with ASML (other than the fact that, of course,
| they make that important part) -- haven't looked into
| setting up a fab! Do they have US competition that is
| "pretty close" in the same sense that Intel is to TSMC?
| sct202 wrote:
| ASML bought out their US competition decades ago. Nikon
| and Canon used to be their main competition in
| lithography machines, but both of them fell behind even
| before EUV.
| cma wrote:
| ASML's EUV tech was originally funded by the US (EUV LLC,
| joint industry/government collaboration from the late
| 90s), and that is why the US can still impose export
| restrictions on ASML to China.
| depereo wrote:
| No one else produces the equipment that supports this
| production process.
| tboughen wrote:
| You mean like ASML already is? They are the only manufacturer
| of EUV lithography equipment for fabs.
|
| https://analyticsindiamag.com/is-asml-the-most-important-
| tec...
| bee_rider wrote:
| Yep, they are another good example.
|
| Intel is really not _that_ far behind TSMC in the grand
| scheme of things, though, so it would be good to hang on to
| them before the situation is totally hopeless.
|
| I'm not aware, at least, of any US competition to ASML.
| bcrl wrote:
| Except that Intel currently fabs ASICs for roughly 0% of
| the cell phone market. TSMC has a massive lead on that
| front. Intel selling off StrongARM 16 years ago was
| massively shortsighted.
| retskrad wrote:
| AMD and Intel make gasoline cars. Their tech is outdated. I am
| honestly surprised that they have their current market cap. it
| should be much lower for both.
| aqfamnzc wrote:
| Are you referrinng to their silicon processes, or their IP?
| mort96 wrote:
| AMD doesn't even have a process do they? So it's presumably
| about x86_64 and associated IP.
| wyldfire wrote:
| At the high end, Apple isn't in this market. ARM designs don't
| really compete well (yet). Graviton3 is great value but it does
| not unseat EPYC or even Xeon for raw performance.
| scarface74 wrote:
| Most servers don't need raw performance from a single chip
| they can do their workloads by horizontally scaling.
| [deleted]
| hedora wrote:
| Is there any market segment they are currently competitive in?
|
| I can't think of one.
|
| Even in their darkest days, AMD was winning the "$100-300 desktop
| with an integrated GPU" segment by a large price-performance
| margin (vs Atom processors).
| DaniFong wrote:
| intel is ahead on the top end of the consumer market with its
| latest gen of processors, in single threaded up to reasonably
| multithreaded. usually a single thread is pacing for games,
| even simulations, though it shouldn't be. it's hard to
| parallelize
| gloryjulio wrote:
| New intel cpu is competitive in gaming, but with the sacrifice
| of the power. And amd still has the counter play with 3d cache
| version which crushes intel on every metric. So yeah..
| supertrope wrote:
| Mindshare. No one got fired for buying
| IBM/Microsoft/Cisco/Intel/AWS.
| Tsarbomb wrote:
| I've seen this in action professionally and it drove me up
| the wall.
|
| At a previous job I had to spec out some hardware procurement
| on the order of a million dollars over two years, and all of
| my compute was based around AMD EPYC. The amount of fighting
| and arguing that this resulted in was wild. These were all
| still supermicro boxes, still from the same trusted vendor we
| were using, but I had to spell out many times that we were
| basically getting double the compute for what we would have
| got otherwise.
|
| Worst part was when the first shipment arrived and nothing
| booted and worked and turned it out be a bad batch of drives
| from micron that had bad controllers, the same ignoramus used
| it as a "I told you so" moment, even though the vendor
| confirmed it was a micron issue and immediately shipped over
| replacements.
| shrubble wrote:
| They have some very low power but decent performance cpus like
| the Pentium Silver N6000 series, but I don't know if they view
| them as good for lowend NUC like machines.
|
| I would certainly be interested in buying some, just not in the
| form of the lowend laptops they are currently in.
| wmf wrote:
| Intel is leading in lower-end desktop CPUs like the 12100,
| 12400, and 13600K.
| PartiallyTyped wrote:
| They win absolute performance on Desktop CPUs but lose on perf-
| per-watt. An argument could be made for AMD's 5800x3d in
| gaming, but when paired with a 4090, the intel CPUs take the
| lead.
| fshbbdssbbgdd wrote:
| > when paired with a 4090, the intel CPUs take the lead
|
| Crypto mining is out, but enterprising gamers can now defray
| their costs by operating a steam turbine with waste heat.
| Shared404 wrote:
| Or making an impromptu campfire!
| pishpash wrote:
| > They win absolute performance on Desktop CPUs but lose on
| perf-per-watt.
|
| How is that possible? They have better thermal design or
| something?
| adgjlsfhk1 wrote:
| no, they just require bigger coolers.
| PartiallyTyped wrote:
| Intel allows the CPUs to draw significantly more power than
| AMD does.
|
| These are about the most reliable benchmarks you can find
| on the internet:
|
| https://youtu.be/todoXi1Y-PI?t=342
| pishpash wrote:
| What's preventing AMD from allowing the same?
| briffle wrote:
| right, pair your $400 CPU with a $1400 video card, and man,
| look how fast it is for graphics applications!
| formerly_proven wrote:
| AMD has a huge gaping pricing hole between AM4 and anything
| AM5, which makes Intel 13th gen rather more attractive. And
| the 5800X3D is actually faster than the AM5 parts in some
| titles iirc
| PartiallyTyped wrote:
| Here is the catch; when Intel and AMD presented their
| slides, nobody could disclose information about the
| Lovelace performance, and therefore all comparisons were
| made using a 3090ti, and in that scenario, even in Intel's
| own graphs, the 5800x3d was actually performing very well;
| so much so that they were playing coy with its performance;
|
| https://www.rockpapershotgun.com/intel-announce-13th-gen-
| rap...
| thrillgore wrote:
| Four words: Too big to fail.
|
| Dark days ahead for Intel.
| uni_rule wrote:
| The dark times were 2012-17, only just recently in the past 3
| years have they gotten off their ass in price to performance.
| They are now steadily improving.
| [deleted]
| Ericson2314 wrote:
| This is why it's crazy the Fed is trying to tank the economy the
| same time Congress is trying to do a CHIPS act. Crazy!
|
| If you are trying to do industrial policy you want to run the
| economy _hot_ , more demand means less need to subsidize, and all
| the administrative and conflict-of-interest headaches that come
| with that.
| vanviegen wrote:
| It seems perfectly reasonable to do both. One may want to cool
| the economy as a whole to fight inflation, while boosting the
| local semiconductor industry to gain some digital independence.
| pertymcpert wrote:
| Some things are more important than the CHIPS act.
| Vt71fcAqt7 wrote:
| Demand is largley irrelivant here as these fabs will not be
| opening in the short term. As long as rates drop when the fabs
| are _completed_ it will be fine. Besides DoD have almost
| ulimited funding, and they want this. Remeber the $10B they
| gave to MS for those useless helmets?
| silisili wrote:
| Controlling persistent high inflation is way more important to
| the nation than homegrown chips right now.
| PaulHoule wrote:
| Hard to say.
|
| I am seeing the service economy wracked by a failure to
| invest in people, process and technology. Go to a restaurant,
| hair salon, pharmacy, or attempt to ride the bus (the one I
| ride in the morning has been canceled) and it is right in
| front of you.
|
| I know just enough process science to be dangerous, but
| something I see in all of these cases is very long queues
| which themselves become a source of disruption and chaos.
| People seem to think that being willing to wait in line is a
| sign of maturity, but it is reduced to practice people seem
| to almost universally not understand that your doctor can't
| see more patients by making them wait longer.
|
| I was at a Dunkin Donuts the other day and rather shocked
| that, because of a lack of hash browns, the kitchen was
| unable to serve _any_ customers waiting in the drive through
| for almost 30 minutes.
|
| The anti-inflationist would say the problem is that people
| have money in their pockets to order hash browns that the
| restaurant can't serve and if we crashed the economy hard
| enough demand would collapse below supply. My fear is that,
| without the capital being there to invest in people, process
| and technology, supply will collapse and we'll be stuck with
| an economy where "nothing works" but the level of demand
| keeps dropping.
| supertrope wrote:
| Customers are generally more forgiving of long lines and
| quality decrease than price increases.
|
| The value of time is subjective and often not purely
| rationally weighed. People will run a red light to save 35
| sec. but then lay on their couch for two hours.
| thriftwy wrote:
| I remember two decades of Intel having unrivaled smallest fab
| process and AMD always having larger, hotter chips. To see Intel
| lagging behind is so unnatural.
| scarface74 wrote:
| Any public company can get money to fund investments. Netflix has
| been borrowing money for a decade until recently to fund content
| at junk bond rates. Intel could probably get much better deals
| RachelF wrote:
| Intel has been doing the opposite - borrowing money and using
| profits to do $70B in share buybacks.
|
| The executives get better short term returns on this than by
| spending money on R&D.
| hedgehog wrote:
| Tough situation to navigate out of. They lost the process lead,
| now TSMC in particular does so much more volume that Intel is at
| a significant scale disadvantage (makes it harder to catch up).
| The margins in the historically lucrative server business are
| under threat as Xeon has to compete with hyperscalers' in-house
| chips as well as credible alternatives from AMD. Moore's law is
| over so the big performance jumps that justified rapid PC refresh
| cycles are gone. They have trouble entering new markets
| themselves and their M&A track record is poor. It seems very
| possible that Intel will never return to the strong position they
| enjoyed ten years ago.
| ajross wrote:
| I think that's largely true, but it's also worth pointing out
| that "Moore's law is over" means that they don't have much
| "catching up" to do. The truth is that all semiconductor
| vendors are heading for a future where they're selling an
| undifferentiated commodity product.
|
| Sure, Intel isn't going to be able to sell Xeons for $1k a pop
| in a future where anyone can go get their chips fabbed at TSMC.
| But neither is TSMC going to be able to command the margins
| they do right now if Apple and NVIDIA know they can trot right
| over to Intel to get a better deal.
|
| To me, the story here is much more "maturing industry is losing
| its margins" than it is a two-way horse race.
| disordinary wrote:
| The differentiator in the server space comes in power
| management and thermals, all things that AMD does better than
| intel. AMD also has better yields and better margins because
| of their chiplet design philosophy.
|
| ARM also has a significant thermal and power edge.
|
| Intel is chasing the top, but actually they should be
| thinking about efficiency.
| Vt71fcAqt7 wrote:
| >The truth is that all semiconductor vendors are heading for
| a future where they're selling an undifferentiated commodity
| product.
|
| This is what I'm hoping for as well. But there are huge
| upfront costs (>20b). This will limit the number of potential
| players.
| Night_Thastus wrote:
| Compare to pre-pandemic/crypto bubble figures (a couple years
| back) and then maybe there's something worth talking about.
|
| All of tech was in a nonsense bubble because of the pandemic and
| crypto. Now that it's over(ish), things are going back to normal.
| cpach wrote:
| The innovator's dilemma, right?
| wmf wrote:
| Not really IMO. Intel's established product lines are plenty
| profitable... or they would be if Intel wasn't failing to
| deliver the basics.
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