The Intel Split

https://stratechery.com/2022/the-intel-split/

by feross • 5 years ago

322 179 5 years ago

carlycue• 5 years ago

Intel cannot and will not catch up. The arrival of the M1 chip is analogous to the arrival of the monolith in 2001 A Space Odyssey. It’s efficiency is frankly alien technology.

atty2• 5 years ago

I love my M1, but it is most certainly not alien technology that can’t be replicated, nor does it imply that other foundries/chip designers can’t catch up. In many respects AMD is already very close (on a previous node, no less), and Intels 12th Gen, while very power hungry, is very good in terms of total performance (obviously not competitive on perf/watt, but it was never going to be, because of the node difference).

criddell• 5 years ago

Are you saying that AMD is very close in perf/watt? If so, that's pretty cool.

tomjen32• 5 years ago

You can get better performance than an M1, but you are not getting anything else with the performance and battery life. Except maybe the M2.

If you want an actual ultra portable, you are getting a Mac.

donkarma• 5 years ago

if my understanding is correct then M1 was a one time boost due to the massive decoder and on chip RAM, it's not going to be constantly getting faster

selectodude• 5 years ago

The M1 also has old cores from the A14. The A15 isn't hugely faster than the A14 but it clocks faster and has other efficiency tweaks. Clock for clock, the M1 is slower than the iPhone 13 Pro.

foobiekr2• 5 years ago

That’s basically it. Apple went big because the target process allowed it. To someone out of the ASIC industry, it is a set of interestingly scaled but pedestrian design choices coupled with some exaggeration (realizable memory bandwidth per core on the Max is a fraction of what you’d expect based on Apple’s aggregate memory bandwidth claim for the processor as a whole) and a very serious investment in performance/watt (legacy of the phone use case).

The Max has barely any improvement core-wise than the first M1. It’s going to be interesting to see what the real next generation looks like.

GeekyBear4• 5 years ago

one time boost

That's not what you would expect if you look at the graph of six years of year-over-year SPEC performance gains on iPhone cores. Their history shows a pretty reliable 20% gain per year.

Whilst in the past 5 years Intel has managed to increase their best single-thread performance by about 28%, Apple has managed to improve their designs by 198%, or 2.98x (let’s call it 3x) the performance of the Apple A9 of late 2015.

https://www.anandtech.com/show/16226/apple-silicon-m1-a14-de...

malfist• 5 years ago

Why do you say that? They're already responding to ARM with their big.Bigger architecture in their latest generation.

I'm sure people said the same thing about Intel when AMD introduced 64 bit procs or Sun introduced multicore processors. Intel has adapted and lead the field many times after being overtaken. No reason to expect them not to do the same here, or at least compete.

klelatti5• 5 years ago

Not sure ‘already’ is appropriate here. big.LITTLE was announced in 2011. Taking 11 years to copy a competitor’s successful feature must be a record of some sort.

Cthulhu_2• 5 years ago

It’s efficiency is frankly alien technology.

That's probably an exaggeration, and this exaltation of Apple is a Bad Thing. The M1 had good designers - two of which have moved on already, one to Microsoft [0], and the lead designer to Intel [1] only days later.

[0] https://9to5mac.com/2022/01/12/apple-silicon-microsoft-poach...

[1] https://9to5mac.com/2022/01/06/apple-engineering-director-m1...

pjmlp2• 5 years ago

M1 only runs on Apple hardware. Hardly matters to Intel customers.

foobiekr2• 5 years ago

That’s true to an extent but no one lives in isolation. Losing Apple was a pretty massive blow.

Still the real blow will be if someone successfully enters the server business. Graviton* are interesting but that’s not a broad threat yet.

blinkingled3• 5 years ago

I don't think Intel's manufacturing problem is purely that of incentive which will be fixed by a split. That's massive oversimplification.

The approach Intel is taking - outsource cutting edge products to TSMC while continuing to invest in their fabs making their lower end stuff and other people's stuff like automotive chips in-house is the best strategy to buy some time to advance their fabs while letting them earn money to support R&D investments.

It's a huge problem and nobody except TSMC has succeeded at it. Besides there is years of lack of focus, incentives and interest in specialized education and manufacturing processes that'll take time for Intel to fix. Meanwhile they will be competitive in consumer markets by going TSMC 3nm and continue to improve on the side by taking on outside fab orders. Seems reasonable to me.

dannyw3• 5 years ago

Intel is already competitive on 10nm (Intel 7) with Alder Lake on desktop against AMD; I'm frankly impressed to see what Intel's designs on TSMC 3nm will do.

saberience• 5 years ago

Only competitive if you don't look at energy usage, Intel relies on cranking the energy usage in order to get their chips almost to compete with AMD.

marricks• 5 years ago

Clearly Intel has huge issues or they wouldn’t be making such a drastic turn. For some people whatever happens to intel the picture is always extremely rosey.

ryan932• 5 years ago

They had profit of 20B last year. The bean counters are the reason they wont invest in cutting edge fabs not a lack of capital.

blinkingled3• 5 years ago

Sure, but does it sound more challenging to invest in a spin off company than an integrated arm that will deliver revenue from inside and outside business? I am sure the shareholders would be more agreeable to the latter. Especially when there is enough demand for chip making to be almost certain that it will not be a huge money loser.

To invest Intel's money in a spinoff fab company while losing strategic control over its direction and have little to gain from its success doesn't feel all that attractive to me.

throwaway4good• 5 years ago

I don’t get it - who would use intel as a fab? How would they competitive? And trustworthy in the sense, not doing competing designs in house?

Cthulhu_2• 5 years ago

Well first off, Intel themselves; they sell millions of chips a year. Given the current chip crisis, after their own capacity they would sell off the rest to the highest bidder. I don't think they would be shy of customers, except for direct competitors. But keep in mind that CPUs represent only part of the semiconductor market.

dannyw3• 5 years ago

Apple buys screens and other components from Samsung (potentially giving them an early look into the next iPhone's form factor, visual design, and specs); the supply chain is built around trust.

pwthornton• 5 years ago

I think that's the wrong question. Who would use Intel as a cutting edge fab? Unclear. But plenty of people would love access to a fab for their non-cutting edge needs.

The risk with this is that Intel will become a fab for older, less expensive chips, while TSMC and others gobble up the top tier stuff.

But the world needs more, not less, fab capacity, and there are plenty of people would gladly use Intel for their needs if the opportunity was there.

ac29• 5 years ago

Additionally, only 23% of TSMCs revenue comes from their most cutting edge 5nm process as of the most recent quarter [0]. Everything else is 7nm or larger, which Intel is capable of doing today. In the scenario where Intel remains a major node behind TSMC, there is still a lot of fab business they could pick up.

[0] https://twitter.com/IanCutress/status/1481581119740989440/ph...

intev• 5 years ago

Microsoft? Maybe another phone maker who can't secure manufacturing with TSMC? They will clearly be tier II for a while, but I think there's enough chip design companies out there vying for manufacturing capacity.

wbsss4412• 5 years ago

People who need to make chips?

It’s not like there is an excess of capacity right now, and there are only a small number of players that even offer what intel has available.

UncleOxidant• 5 years ago

who would use intel as a fab?

We've got a very serious shortage of fab capacity right now that will probably last for at least 2 or 3 more years. The answer would be anyone who needs fab capacity of the sort Intel can provide (not likely AMD of course, though I could see Apple giving it a try).

MangoCoffee6• 5 years ago

Apple will ditch TSMC if someone else offer better node and cheaper price.

there is no loyalty. Apple will ditch you if they can get cheaper price or you are competing with them like Samsung.

jacobr1• 5 years ago

Those who want to manufacture their chips locally (US or EU).

cs7022• 5 years ago

In short, Gelsinger and his team are configuring the company so Intel's internal manufacturing operations must earn Intel's business, in competition against every other fab-as-a-service provider in the world, including TSMC.

The risk is obvious: The company's internal manufacturing operations can survive only if they figure out how to outperform competitors. The upside is that all other parts of Intel stand a good chance of surviving and thriving -- but that remains to be seen.

Only one thing is certain: Gelsinger and his team have a lot of cojones.

lmilcin• 5 years ago

As an ex-Intel employee it is interesting to see.

This seems to be sound long-term though it may cause significant shrink in the business in next couple of years to cut lines of business that are not above water.

From the point of view of infinite game it makes a lot of sense to diversify and then cut any branch of business that is not profitable, before it drags entire company.

While I think it is difficult to predict results, one thing is sure -- this will force a lot of change in Intel and we would likely not recognise the company ten years from now.

SavantIdiot• 5 years ago

Intel's internal manufacturing operations must earn Intel's business

This is putting lots of high-level employee's future earnings on the line in a far more direct manner. It will be interesting to see if they accept this challenge, or fight it in order to accept the slow decay that will still ensure at least a longer-term personal financial gain (i.e., instead of failing in 2 years, failing slowly over 10).

ignoramous• 5 years ago

Intel's internal manufacturing operations must earn Intel's business, in competition against every other fab-as-a-service provider in the world, including TSMC.

I think this might be an interesting retrospective application of The Innovator's Solution's 'be willing to cannibalize revenue streams in-order to avoid disruption.'

threatripper8• 5 years ago

This means that Intel manufacturing is used where it makes sense and vice versa isn't used where it doesn't make sense.

I can see those general outcomes:

* Intel manufacturing is soon again better than other manufacturers in all aspects as it has been a long time. All Intel business goes to Intel manufacturing and things return to what they were.

* Intel manufacturing is better in some aspects and continues to outcompete other manufacturers in some areas. Most Intel business goes to Intel manufacturing but some special business goes to other manufacturers. Some other companies use Intel where they have an advantage. Everybody wins.

* Intel manufacturing cannot keep up with the market leader. Most Intel business goes to the leading Fab. Intel manufacturing cannot catch up as they don't earn enough money to do so. They start cutting costs and compete downmarket with lower tier fabs. In the long run Intel becomes fabless.

chasil3• 5 years ago

The problem that the industry faces is that the economics and reliability of these chips have been undermined on the recent nodes.

Sophie Wilson has said that cost-per-transistor is rising since we shrank below 22nm, and that a 7nm die cannot run more than half of its transistors at the same time without melting.

Sophie addresses the cost rise at 22:00.

https://m.youtube.com/watch?v=zX4ZNfvw1cw

Heat is more of a problem because finfet can't dissipate as well as planar, and reliability is declining at smaller nodes.

"With a planar device, you do not have to bother about self-heating. There are a lot of ways to dissipate heat with a planar device, but with finFETs that is not the case. The heat gets trapped and there are few chances for that heat to get dissipated."

https://semiengineering.com/chip-aging-becomes-design-proble...

https://news.ycombinator.com/item?id=29889951

If I needed a 20-year service life, I would not choose 7nm.

Edit: I did not realize that ARM1 had fewer transistors (~25k) than the 8086 (29k), and over ten times less than the 80386 (275k). Intel should have bought ARM in the 80s; instead Olivetti got them.

me_me_me3• 5 years ago

Fabless scenario will not happen, ever.

One simple reason that similarly to aeronautics chip manufactures are critical industries for US.

US government will not let either one die.

opportune• 5 years ago

I think there is a pretty clear outcome, Intel will go fabless for highest end chips and continue as normal with everything else. They will have many customers (USG) who will require domestically manufactured chips. But they also need to compete with AMD, Apple, and friends and this will allow them to fab out to TSMC while, for lack of a better term, saving face.

Spooky233• 5 years ago

Another possibility is that the market is changing. The age old Xeon/Core/“binned low end” model may not be viable anymore as hyperscale cloud providers start to rule and people don’t care about CPUs as a differentiator. Add in COVID chaos and the answers are unclear.

Hell I just replaced thousands of older desktops with slower laptop chips — nobody noticed. Frankly, I only bought new devices because of Microsoft’s bullshit Windows 11 requirements.

The guaranteed cash flow train is slowing down, which makes setting billions of dollars on fire with high risk fab processes a big deal.

Intel had to adapt like this in the early 90s when memory became a commodity. We’ll see if they make it.

paulpan• 5 years ago

Agreed except there's only 2 outcomes: #1 (win) or #3 (lose). The chips business is a winner-take-all market where if your product isn't the best (in efficiency, performance, whatever metric), then it can't command a price premium nor the attention of OEMs. Also the core business isn't consumer but for enterprise/datacenter market where efficiency/performance is paramount.

If #1, then everything is rosy and Intel will regain its dominance from the days of Sandy Bridge. Its chips will be fabricated internally and they get to enjoy the profits from vertical integration.

If #3, then Intel will certainly spin off or sell off its manufacturing/fabrication business very similar to AMD more than a decade ago.

The caveat is that I don't think Intel's problem right now is simply a manufacturing issue. Sure their Alder Lake is competitive but it's not superior to AMD's offerings or even measured against Apple's SOCs. Remember that unlike the last iteration (Rocket Lake), Alder Lake doesn't suffer from a mismatch in design vs. manufacturing cadence - it's arrived as expected.

blihp• 5 years ago

I don't see it as that much of a risk. One of the reasons Intel has so thoroughly dominated for so long was that they were at least at parity to slightly ahead on process nodes. If they don't get back there fast, they are in real trouble. Intel likes to command a price premium and you can't do that in second place.

threatripper8• 5 years ago

I think some of the advantage comes from synergies of having microarchitecture development and process development under one roof. You can fine tune them together to get the best performance/power ratio. Even if both alone are just on par with the competition, together they are still ahead by a few iterations. Also they get out new products a bit faster.

The problem is that by switching to another fab they lose these advantages.

n7pdx• 5 years ago

It is quite a bit more than parity to slightly ahead. From 130nm to 22nm the Intel process advantage was enormous. That the horrible P4 architecture was able to compete and be cost-effective is testament to that. Intel architects and designers never had to work very hard to beat the competition.

That is one of the reasons Intel was able to get away with their garbage in-house EDA tooling and processes. Intel was also able to get away with delays to fix their bugs (due to awful validation methodology).

Even if Intel process catches up TSMC, they would have fix their design tooling, hire talented engineers and get rid of the entrenched hacks who built their careers on mediocrity.

strikelaserclaw• 5 years ago

decoupling

skynetv2• 5 years ago

This was always the case. If anyone tells you otherwise, they do not know. In fact, every team at Intel operates as a P&L ruthlessly, not just manufacturing.

ksec2• 5 years ago

Only one thing is certain: Gelsinger and his team have a lot of cojones.

Trained and mentored by Andy Grove. Disciple of the old school "Only the paranoid survive". I expect nothing less.

I hope someday he could do the next unthinkable, Once their foundry could at least compete against Samsung, open up the x86 ISA. Or clean up the ISA and call it something like AE86. In the very long term, x86 is pretty much dead. By 2030 you would expect all hyperscaler to be on ARM with x86 serving some minor legacy clients. You have PC manufacture eager to compete with Apple and ChromeBook. So x86 could loss up to 50% of its current volume by 2030. Then a long tail of 10 - 15 years decline.

lmm• 5 years ago

AE86 would be a good architecture for running in the '90s.

DCKing2• 5 years ago

The company's internal manufacturing operations can survive only if they figure out how to outperform competitors.

Is outperforming competitors necessary for Intel's survival? There's plenty of fabs in the world doing quite alright well behind TSMC, the vast majority of which can't even come close to Intel's current capabilities [1]. Even if Intel never succeeds with their existing process roadmap - which is not on pace to beat TSMC - they still possess some of the most advanced chip manufacturing processes in a world that's all the more dependant on chip manufacturing.

GlobalFoundries got out of the race on 14nm - a 14nm not as good as Intel's 14nm and far behind Intel's 10nm - and is still posting YoY revenue growth, despite losing much of the volume they were producing for AMD over the last few years.

In addition to that, I suppose that even if Intel merely succeeds in roughly keeping up with TSMC and Samsung (their current 10nm being on par with Samsung's and TSMC's 7nm would classify as "roughly keeping up", I think) there's American national security interests at play. Especially so if Intel's manufacturing capabilities are accessible to (American) third parties. No way the powers that be would let Intel's manufacturing plants go under.

It's a pretty bold strategy at face value, but I think it's actually a pretty straightforward choice and the risks aren't all that existential.

[1] https://en.wikipedia.org/wiki/List_of_semiconductor_fabricat...

seanp2k23• 5 years ago

No way the powers that be would let Intel's manufacturing plants go under.

Perhaps that's part of the calculus too; if they know that Uncle Sam will backstop any failures, are they not also making the same play as their competitors were in the 80s?

    The problem is that by the mid-1980s Japanese competitors were producing 
    more reliable memory at lower costs (allegedly) backed by unlimited funding 
    from the Japanese government, and Intel was struggling to compete…

cs7022• 5 years ago

In the short run (say, a time horizon under 10 years), I think you're right. In the long run, I think failing to outperform the competition persistently would lead to gradual irrelevance, unsustainable margins, and eventually a slow death of the manufacturing side. I mean, that's the path Intel's manufactoring operations were on before this recent change in strategy: the path to a slow death.

kelp• 5 years ago

It seems like echos of, and a less drastic version of the AMD/Global Foundries split.

And then Global Foundries couldn't keep up, cancelled their 7nm work, and AMD has been sending more and more business to TSMC.

bsder• 5 years ago

In short, Gelsinger and his team are configuring the company so Intel's internal manufacturing operations must earn Intel's business, in competition against every other fab-as-a-service provider in the world, including TSMC.

This is a monumentally stupid idea and, even worse, we have seen it before. Every company that has done this in the past is gone.

I would say that every VLSI designer in Intel should be printing their resumes, but I'm pretty sure that the decent ones left long ago.

In addition, this completely throws away the advantage that having a fab brings at a time when it's finally important.

Fabless works great when you can push a synthesis button every 18 months and your chip doubles in speed. Smart design can't keep up with that.

However, once Moore's Law stops and you can't run every transistor without melting your chip, suddenly design matters again. You want to be able to do creative things with a bit of tweak from your fab.

bigbillheck• 5 years ago

Why stop there, make various parts of manufacturing compete against each other. Get this thing going Sears-style, it'll be lots of fun for those of us on the outside.

stingtao• 5 years ago

If Intel split the manufacturing unit, it would not be competitive unless it invested lots more in advanced new processes.

pclmulqdq• 5 years ago

The more I have seen of big tech companies, the more I think they need to split up from time to time. Complacency and ossification emerge as a product of scale. If you want to avoid them, reduce your scale. If your manufacturing engineers (really, the managers) need to be at the cutting edge of manufacturing or be out of a job, they will figure out how to get there.

Intel has had a number of embarrassing technology misses that have put them behind: the first I remember was through-silicon vias for 3D stacking and it was only a matter of time before they missed something necessary for an advanced fab, and they missed on EUV.

Their foundry engineers at the same time were recruiting more engineers out of school on the basis that they were the "best in the world." They thought their position was unassailable because they had high yield at 22 nm, so they rested on their laurels and missed technology after technology before it bit them.

threatripper8• 5 years ago

There is little information available on what was actually going on inside Intel. All big companies have big problems and each single division or working group is not indicative of the company as a whole. You can find several people with good and bad experience painting all kinds of pictures. A single voice won't tell you the whole picture. Probable even the leaders of Intel don't really know exactly where they are standing.

Of course all companies go through cycles of explosive growth, ossification and renewal. Small companies often die because too much of the company goes sour at the same time. In big companies this can be more spread out over time and space and there's always enough left to rebuild the leadership from the inside and push out new profitable products in time.

That being said I don't have any indication that Intel right now is in a particularly good position. Nobody in the engineering area seems to feel too honored for having worked at Intel. Yet, they got 10nm finally working and continue to rake in money. Of great concern to me is that much of that money is paid out to investors instead of reinvesting it into the company. There doesn't seem to be a convincing plan of growing the business in the future. Also they did not admit that they have a serious problem at their hands for a long time. You just can't trust anything that Intel releases; it's just a rosy projection of the future when everything goes as planned.

Unless a group of senior Ex-Intel get together and tell their war-stories we won't know what actually was going on inside.

airstrike• 5 years ago

The more I have seen of big tech companies, the more I think they need to split up from time to time.

This is somewhat true of every industry. Industrial companies in particular are always playing the game of conglomerization vs. specialization. But I agree it will definitely be interesting to see this play out in Tech in the near future

omegalulw• 5 years ago

The more I have seen of big tech companies, the more I think they need to split up from time to time. Complacency and ossification emerge as a product of scale.

This is highly anecdotal. Apple got to where they are with M1 by vertically interesting which wouldn't be possible if they broke up like you said.

Rather, in a pipeline the bottleneck determines throughout - Intel's bottleneck is manufacturing and that's what they need to fix or cut out. We have no reason to believe their design with TSMC chips won't best AMD it even apple.

awill• 5 years ago

I'm always confused when I hear reviewers say that Intel is back on top.

They beat AMD's benchmarks at ~double the power. I get it's winning, but it's not a fair fight. I certainly don't want my computer to be 10% faster at double the wattage.

wmf• 5 years ago

Alder Lake is efficient at the low end; the 12100 and 12400 are really good against AMD.

pradn2• 5 years ago

For home use, that's fine. I don't worry about the power peak usage of my computer since it rarely gets to that level. For servers, that's a no-go.

neogodless3• 5 years ago

I think there's another way to word this or spin this...

For home use, it's going to depend on the consumer. Some people want a chip that's easy to power and cool, and still gets 80/90/95% of the performance. Some people want the absolute best performer (for their specific uses) with less regard to cooling and power.

magila• 5 years ago

The whole "double the power of AMD" meme is an oversimplification at best. It's all based on a 12900K running a heavy multi-core load with an increased power limit. This is the ultimate "I don't care about power efficiency" setup so it's kind of silly to knock it for drawing lots of power.

If you care about power efficiency you can drop the power limit and still be very competitive with AMD. The only reason you don't see Ryzen CPUs drawing the same power as a maxed out 12900K is because if you pumped that much power into a Ryzen CPU it would explode (at least without LN2 being involved).

acomjean2• 5 years ago

Reviewers like a good comeback story. And intel is doing much better than it was doing before (I own machines with both types of CPUs). And intel did some different things with the new chips (2 different core types.), so interesting.

AMD hadn't released there new chips when some of that stuff was written. but its actually a little bit exciting that competition has returned and I suspect it will be good for consumers as long as both chip makers have competitive products.

lvl100• 5 years ago

I am pretty bearish on the the semi space especially after TSMC comments last week. I really think they’re expanding at the worst possible time. Understandably, this is largely due to politics.

altcognito• 5 years ago

I can't quite grasp why anyone would be bearish on the semi space. It's been non-stop growth for the past four decades and only appears to be accelerating.

What in the world is there to be "bearish" about?

acomjean2• 5 years ago

I'm not the original poster. But I'm guessing that the reasoning is: there might be more capacity than needed so that would drive profits down. Cheap chips seem like a great thing to me, but I'm not selling them.

But at this point when there putting chips in everything its hard not to see the market expanding to meet increased capacity. (I think some greating cards have chips in them to control music/lights....)

sydthrowaway• 5 years ago

No, he’s talking about the forthcoming dual invasion of Ukraine and Taiwan by Russia and China

klelatti5• 5 years ago

Problem is the less product Intel pushes through its own fabs the less investment they will get and the more they will fall behind.

This feels like a defensive / short term value maximisation strategy - and might be the right one in terms of total value. It doesn’t feel like a long term vote of confidence.

MangoCoffee6• 5 years ago

less product Intel pushes through its own fabs

that's the problem the article mentioned. Intel is an IDM. they developed their own tools/process and it gave Intel an edge during the early years of the semis industry.

however, it look like the industry catch up to Intel. Intel's own tools/process is no longer enough and in fact it became an technical debt.

Intel split into two allowed Intel's foundry to use standard equipment/software thus no needs to waste money on building its own tools.

klelatti5• 5 years ago

Why can’t they migrate to industry standard tools whilst keeping their business in house?

MangoCoffee6• 5 years ago

bottom line: Intel's edge is an technical debt.

Intel's own tools/process used to give them an edge over everyone else during the early years in the semis industry. Overtime, tool suppliers have catch up with Intel and Intel is falling behind due to their own tools delay/insufficient.

Intel's own tools is losing out to commodity and standardized tools

bluedino• 5 years ago

Imagine what could have been if Intel wouldn't have sold XScale back in 2006 and kept focusing on ARM

MangoCoffee6• 5 years ago

ARM is not end all and be all. x86 still have a big market share

neogodless3• 5 years ago

That's one way to put it! I'm not finding any comprehensive sources, but here's an example:

https://www.theregister.com/2021/11/12/apple_arm_m1_intel_x8...

Arm's market share in PC chips was about eight per cent during Q3 this year, climbing steadily from seven per cent in Q2, and up from only two per cent in Q3 2020, before Arm-compatible M1 Macs went on sale.

ARM is very much on the rise, but also still in the single digits, leaving plenty for x86.

https://futurecio.tech/intel-losing-share-to-amd-and-arm/

5% of the servers shipped in the third quarter of 2021 had an Arm CPU

stefan_• 5 years ago

What exactly would have been? There is no inherent superiority in the ARM architecture. Hell, 2006 ARM is a trash architecture. They just happened to be the only vendor that cared about that niche, and then the niche stopped being niche.

cletus• 5 years ago

IMHO this is just Intel hiding rather than solving its problems. It gives the appearance of management doing something but it's the wrong thing.

If we've learned nothing else, the big winners are at the cutting edge and vertically integrated. Splitting design and fab seems like a good idea: force fab to compete for design business. But middle management will take over and create perverse incentives where neither fab nor design radically improves.

I've heard tales of Intel being rife with politics, fiefdoms and empire-building. This is classic middle management run amok in the absence of real leadership. I honestly think the best thing Intel could do is fire everyone above the director level and start over.

Intel dominated when their fab was cutting edge and no one else had access to it. Splitting this means if their fab improves then everyone has access to it.

There's clearly an organizational problem here but this split isn't going to solve it.

threatripper8• 5 years ago

IMHO it's the same pattern of the time when Intel gave up on their memory business and entered the CPU business. Citing from memory: "If you were the new CEO what would you do to save the company?" - and he immediately knew the answer - "Then let's go back in the boardroom and do that."

Judging from that it seems like their fab business doesn't have any long term future, the outside world just doesn't know it yet. Now they put on a show until they are ready to fully convert to other fabs. After all, the current fabs are still cranking out chips that make them billions each month.

JumpCrisscross2• 5 years ago

their fab business doesn't have any long term future

It has a fine future, just not in a 60%+ margin business. Intel should bite the bullet and spin out its fabs. Let it compete and grow as a separate company from Intel’s design units. Stratchery is spot on, as he’s been about Intel from day one.

notswiley2• 5 years ago

Isn't this kind of thing part of what killed the PalmPilot?

mwcampbell• 5 years ago

if tomorrow morning the world’s great chip companies were to agree to stop advancing the technology, Moore’s Law would be repealed by tomorrow evening, leaving the next few decades with the task of mopping up all of its implications.

On the one hand, if this happened, it could be good for putting an end to the routine obsolescence of electronics. Then maybe we could get to the future that bunnie predicted roughly 10 years ago [1], complete with heirloom laptops.

On the other hand, ongoing advances in semiconductor technology let us solve real problems -- not just in automation that makes the rich richer, enables mass surveillance, and possibly takes away jobs, but in areas that actually make people's lives better, such as accessibility. If Moore's Law had stopped before the SoC in the iPhone 3GS had been introduced, would we have smartphones with built-in screen readers for blind people? If it had stopped before the Apple A12 in 2018, would the iOS VoiceOver screen reader be able to use on-device machine learning to provide access to apps that weren't designed to be accessible? (Edit: A9-based devices could run iOS 14, but not with this feature.) What new problems will be solved by further advances in semiconductors? I don't know, but I know I shouldn't wish for an end to those advances. I just wish we could have them without ever-increasing software bloat that leads to obsolete hardware.

[1]:' https://www.bunniestudios.com/blog/?page_id=1927

alfor2• 5 years ago

- The PC is in decline (bad for intel)

- Intel lost the mobile platform

- Apple is moving to ARM, PC laptops to follow soon.

- AMD is eating intel lunch in the high performance x86

- Servers are starting to move to ARM

Last piece of the puzzle - Intel is not doing great at the fab level.

It doesn’t look good for Intel, they need to do a radical transformation fast.

Innovate now or die.

neogodless3• 5 years ago

I agree with many of your points, however...

- Apple is moving to ARM, PC laptops to follow soon.
- AMD is eating intel lunch in the high performance x86

That first one really needs... a source? It's a guess, but far from a certainty!

The second one is partially true? AMD has greatly increased their market share and is much more competitive with Intel than they were 5 years earlier. They are not beating Intel in market share, but they are gaining on them. They recently had leads in performance, but it's not a one-sided race.

silvestrov• 5 years ago

The first is true to a degree if "PC laptops" includes the laptops kids use in schools: a lot of schools have switched to ChromeBooks due to price and ease of management.

alfor2• 5 years ago

I agree, it’s not done on the server, it’s just that AMD was nonexistent a few years ago and now have share of the market. Intel was the only choice for top performance and were able to dictate the price at the high end.

rkagerer• 5 years ago

The company's willingness to tackle tooling to multiply the effectiveness of their employees was a key factor in their success:

This incredible growth rate could not be achieved by hiring an exponentially-growing number of design engineers. It was fulfilled by adopting new design methodologies and by introducing innovative design automation software at every processor generation. These methodologies and tools always applied principles of raising design abstraction, becoming increasingly precise in terms of circuit and parasitic modeling while simultaneously using ever-increasing levels of hierarchy, regularity, and automatic synthesis.

As a rule, whenever a task became too painful to perform using the old methods, a new method and associated tool were conceived for solving the problem. This way, tools and design practices were evolving, always addressing the most labor-intensive task at hand. Naturally, the evolution of tools occurred bottom-up, from layout tools to circuit, logic, and architecture. Typically, at each abstraction level the verification problem was most painful, hence it was addressed first. The synthesis problem at that level was addressed much later.

adamc• 5 years ago

Reading this, I had the uneasy feeling that we might be seeing a company chase a past that cannot be its future.

mrintellectual• 5 years ago

Having worked at Intel before, I can safely say that it's difficult to boil down Intel's problems to a single issue (e.g. chip manufacturing). Stagnant company culture, limited growth opportunities within the company, and a fanatical focus on selling CPUs instead of innovating are all problems that Intel currently faces.

hedgehog• 5 years ago

The conversation is also muddied by varying definitions of success and failure. Intel isn't going to go broke in any foreseeable future but they may lose the premium margins they used to earn for having the best performing product. To the extent fab advantage drove that advantage (likely a big part) and that advantage is not coming back (because they no longer have a scale advantage) then maybe the premium margins will never come back. That's what investors worry about.

gumby• 5 years ago

I think Thompson says this (while talking about a series of lackluster CEOs) and says the topic of the "split" is a consequence of that, which has to be fixed (and is merely one of the problems)

anonporridge• 5 years ago

Limited growth opportunities seems like a big problem that can kill any organization.

Specifically if leadership gets ossified and there's no realistic path for ambitious young people to rise into positions of power and responsibility.

When this happens, the ambitious young people are more likely to vote with the feet and build a competing organization that they will actually have power running.

This is especially problematic when it happens in government. What are young people in America supposed to do when the political conversation can't break out of asking which of near geriatric octogenarian who had a childhood with rotary phones should be our next president?

Our culture seems to have lost the very important feature that there comes a time when you've had your turn at the helm, and now you need to step down and support new leadership.

benreesman• 5 years ago

Intel blew EUV, which fair enough, it’s hard as hell. Are there other problems, sure, but when you go from leading-edge process technology to a two node lag, you’re fucked either way.

This article is rambling and over-complicated.

For a much more insightful and compelling view into Intel at its greatest I recommend “The Pentium Chronicles”.

pm90• 5 years ago

How to fix Intel:

1. Lobby the US Government and public to increase public spending on manufacturing semiconductors in the US

2. Corner most of those subsidies/funding

3. Done

Only partially joking; Why has Intel not made the over reliance of overseas fabs a natsec issue?

khyryk3• 5 years ago

It has, now it's waiting for money from the CHIPS Act, which is now in the House.

jalopy2• 5 years ago

This is a "heads I win, tails I win" strategy. Give the fab business a chance to be independent and justify its massive capex and lower margin profile. Increase utilization of nodes to squeeze as much cashflow out of them as possible. If it continues to be a worthwhile cashflow endeavor, fantastic. If not, split the company and fetch a high price for a sophisticated and capable (if not #1) semi fab business.

Let the higher margin chip design business utilize whatever manufacturing process is most effective for its latest and greatest chip designs. Chip design and development won't be hamstrung by setbacks in manufacturing. Intel's scale will ensure most optimal pricing and deal terms with TSMC (if INTC doesn't use its own fab).

Along the way, there is additional upside optionality from government subsidies and support for a critical piece of infrastructure in the 21st century. Domestic fabs will be (if they aren't already) as high priority and critical to US national defense as the military hardware contractors (Boeing, Lockheed Martin, etc). That also ensures a floor to the price of the fab business should Gelsinger decide it should be sold.

AaronFriel• 5 years ago

This was the same rationale AMD had when parting ways with their Global Foundries business, and I'd argue just as much a move out of desperation. What's different are the politics.

United States domestic national security concerns make it much more financially prudent for Intel to pursue the same split. AMD took a gamble, Intel is likely to have more of a "sure thing", they have the capital backing them to make a competitive foundry business, if not the federal government will make that capital happen.

jalopy2• 5 years ago

Also with their packaging tech (EMiB and Foveros) they can mix and match chips from different fabs - ie, combine P-cores from TSMC fabs with E-cores from their own (possibly older) fabs. Alder Lake is the first real stab at the "chiplet" architecture, and it seems to be a very good outing. Future iterations will only improve, and at Intel's purchase scale economics they'll be able to manufacture chiplet designs that match market needs for the highest margin or pricing pressure to squeeze competitors, if needed.

yyyk3• 5 years ago

Stratechery is usually very clever, but here misses a key point: Intel falling behind in node size is the problem, yet TSMC is not a direct competitor to Intel. Sure, TSMC competes against the new Intel foundry initiative, but foundry is not the main profit center. For the most part, it's the companies that buy TSMC's fab time that are competing with Intel.

So sure, Intel buying TSMC time helps TSMC. However, TSMC would have sold that fab time anyway, and gotten the same scale fabbing (say) AMD chips. It's much more useful for Intel to buy production and hurt the actual Intel competitors* that would have contracted for that TSMC time while still making profits for Intel.

Intel will still have enough scale to still grow its own processes, and it can probably rely on some help from Uncle Sam to further tilt the scales.

I'm frankly surprised that regulators haven't interfered - in most other markets people would have noticed the anti-competitive move (a manufacturer 'starving' their competitors' supply).

* Apple excepted, since they have more than enough cash to outbid Intel. Then again, Apple doesn't bother with servers, so Intel can live with this. Also, the Apple ecosystem is different enough that switching has its own complex set of upsides and downsides.

lifeisstillgood• 5 years ago

Other than AMD who actually competes with Intel (honest question). I mean for servers there is 686 descendants (Intel/AMD) and then ... err ARM on servers ?

yyyk3• 5 years ago

AMD and also ARM on servers, like Amazon's Graviton.

Intel beating TSMC in node size isn't going to happen in near term even in Intel's best case scenario, and even if that were to happen - fabs like TSMC will always have enough scale to compete. So Intel might as well buy from TSMC and take over its rival's production. Every chip Intel buys from TSMC is a chip taken from AMD and a spare chip Intel fabs could make.

qsmi• 5 years ago

If this analysis is even half correct those selling x86 server CPUs need to be concerned. Today there is a huge moat in existing x86 software, sure, but savings like that can justify many ports.

https://www.anandtech.com/show/15578/cloud-clash-amazon-grav...

"Cost Analysis - An x86 Massacre"

kennethh• 5 years ago

For TSMC it is also good to have another big customer, otherwise they might become to dependant on Apple. Easier to get good pricing when they can say that we can sell the capacity to another big entity.

The Intel Split

Related Stories