Oversimplifying dramatically, my concern about Intel's future began in 2005 when a sales and marketing person, Otellini, became CEO. But their problems began earlier than that as the brilliant founders aged, lost interest in the complexities of the total business, then aged out of all participation. Hubris defeated their best intentions, first by moving away from x86 with Itanium then not moving away from x86 with mobile.
Hi Patrick, I do wonder if Andy Grove sowed the seeds of later problems. Reading about the early days of Intel there was a clear tension between Grove, who was all about focus and efficiency, and the teams that were innovating. Faggin left because he couldn't stand it any more for example. When Grove became CEO the focus was on manufacturing leadership and dominating the desktop with the 386 and its descendants. Itanium probably reinforced the idea that 386 was the answer to every question. Perhaps the culture that Grove left was right for the 1990s but wrong for the 2000s.
where "like" means thanks for summarizing. I listened to Ben and Jay's discussion on the Circuit podcast as well. Like them, I'm wondering why INTC didn't cut the dividend earlier, and do layoffs earlier (if they truly were needed), when it really had carte blanche to. Rephrased, another shoe dropped, and I'm wondering if there will yet be more.
I did a media interview with a reporter in the Oregon area today, who was wondering about local employment impact (Intel is about 4% of state employment), and if it was indicative of more layoffs coming in semis. My comment was this announcement was more about Intel than about the semiconductor industry.
Thanks Jon. They've clearly lost the confidence of investors now. As I think Ben and Jay said on the Circuit, if this was any other company, then the CEO would be heading for the door. But Intel isn't 'any other company' and there aren't many other possible CEOs who would stand a chance of leading Intel successfully.
I'm left with the question we've all been asking for a long time. Does Intel in its current form make any sense? Great progress on process and huge investments in leading edge fabs. But are their prospects being held back by being linked (even just at corporate level) to Intel's CPUs and other designs. If I'm Lisa Su do I really want to entrust Zen 5 to Intel? If I'm Jensen do I really want to support the maker of competing graphics and AI accelerators. Maybe Intel's products have to wither for the fabs to prosper?
PS You might enjoy Adam Tooze's - possibly controversial - take on the topic.
btw, I think your question here - would AMD or NVIDIA really entrust fabrication to Intel - is *the* question. I suspect both companies would like to have additional fabrication partners and at times both probably feel like they're leaving money on the table due to fabrication lead times. With that said....would they entrust their IP to IFS as that partner? I do know smart people who think the answer to that question is yes. I'm a little more skeptical. (This is one reason I'm mildly optimistic about Rapidus, though I'll couch that with lots of adjectives like "mildly".)
I wholeheartedly agree with Jay and Ben - Pat shouldn't be fired, but the offenses are such that a board should at least contemplate it, if that makes sense - but the recurrent shoe-dropping is indicative of internal visibility problems that really do need fixing.
Appreciate Adam's take. I do admire what Intel/Pat have been able to pull off, financially, and I thought Claus Aasholm had a good take on that. But the need for financing is driven by diminishing cash flow from product...which gets us back to the priority of solving product....
Thanks for sharing. Here’s the Oregon public media interview. Not quite the language I used - the phrase I used was technology leadership in semiconductor fabrication, but that’s a mouthful
Oversimplifying dramatically, my concern about Intel's future began in 2005 when a sales and marketing person, Otellini, became CEO. But their problems began earlier than that as the brilliant founders aged, lost interest in the complexities of the total business, then aged out of all participation. Hubris defeated their best intentions, first by moving away from x86 with Itanium then not moving away from x86 with mobile.
Hi Patrick, I do wonder if Andy Grove sowed the seeds of later problems. Reading about the early days of Intel there was a clear tension between Grove, who was all about focus and efficiency, and the teams that were innovating. Faggin left because he couldn't stand it any more for example. When Grove became CEO the focus was on manufacturing leadership and dominating the desktop with the 386 and its descendants. Itanium probably reinforced the idea that 386 was the answer to every question. Perhaps the culture that Grove left was right for the 1990s but wrong for the 2000s.
where "like" means thanks for summarizing. I listened to Ben and Jay's discussion on the Circuit podcast as well. Like them, I'm wondering why INTC didn't cut the dividend earlier, and do layoffs earlier (if they truly were needed), when it really had carte blanche to. Rephrased, another shoe dropped, and I'm wondering if there will yet be more.
I did a media interview with a reporter in the Oregon area today, who was wondering about local employment impact (Intel is about 4% of state employment), and if it was indicative of more layoffs coming in semis. My comment was this announcement was more about Intel than about the semiconductor industry.
Thanks Jon. They've clearly lost the confidence of investors now. As I think Ben and Jay said on the Circuit, if this was any other company, then the CEO would be heading for the door. But Intel isn't 'any other company' and there aren't many other possible CEOs who would stand a chance of leading Intel successfully.
I'm left with the question we've all been asking for a long time. Does Intel in its current form make any sense? Great progress on process and huge investments in leading edge fabs. But are their prospects being held back by being linked (even just at corporate level) to Intel's CPUs and other designs. If I'm Lisa Su do I really want to entrust Zen 5 to Intel? If I'm Jensen do I really want to support the maker of competing graphics and AI accelerators. Maybe Intel's products have to wither for the fabs to prosper?
PS You might enjoy Adam Tooze's - possibly controversial - take on the topic.
https://adamtooze.substack.com/p/chartbook-306-nodes-rebar-and-private
btw, I think your question here - would AMD or NVIDIA really entrust fabrication to Intel - is *the* question. I suspect both companies would like to have additional fabrication partners and at times both probably feel like they're leaving money on the table due to fabrication lead times. With that said....would they entrust their IP to IFS as that partner? I do know smart people who think the answer to that question is yes. I'm a little more skeptical. (This is one reason I'm mildly optimistic about Rapidus, though I'll couch that with lots of adjectives like "mildly".)
I wholeheartedly agree with Jay and Ben - Pat shouldn't be fired, but the offenses are such that a board should at least contemplate it, if that makes sense - but the recurrent shoe-dropping is indicative of internal visibility problems that really do need fixing.
Appreciate Adam's take. I do admire what Intel/Pat have been able to pull off, financially, and I thought Claus Aasholm had a good take on that. But the need for financing is driven by diminishing cash flow from product...which gets us back to the priority of solving product....
Thanks for sharing. Here’s the Oregon public media interview. Not quite the language I used - the phrase I used was technology leadership in semiconductor fabrication, but that’s a mouthful
https://www.opb.org/article/2024/08/08/intel-nike-layoffs-oregon-economy/