A Message from Intel CEO Pat Gelsinger to Employees

https://www.intc.com/news-events/press-releases/detail/1710/a-message-from-intel-ceo-pat-gelsinger-to-employees

by gok • 2 years ago

77 88 2 years ago

No mention at all of the millions of defective CPUs, only billions of dollars of cost cutting what could possibly go wrong?

jordanb4• 2 years ago

So their strategy is to cut their way to wall street liking them again. When that doesn't work, presumably, more cuts.

When did our corporate leadership become so dumb and predictable?

ls612• 2 years ago

Their strategy is to focus on 18A by H1 of next year, which will achieve parity with TSMC on process again. Then they figure the fab business will work itself out since everyone buying chips wants an alternative to TSMC that is competitive. Even if 18A slipped to H2 of next year that is when TSMC 2nm is expected to enter volume manufacturing so they would still achieve parity.

jordanb4• 2 years ago

18A was already rolling down the tracks. Either it'll be great or it won't. But if it is, Intel needs to be poised and willing to make the investments to capitalize on it.

Instead what we're getting with this message is "we want to save 10 billion and everything that isn't 18A go-to-production is on the chopping block".

Maybe instead of cutting to hit arbitrary financial performance numbers that they set for themselves in the hopes of impressing investors, they could explain to the investors why 18A is such a game changer and how Intel will capitalize on it to regain their crown.

HDThoreaun2• 2 years ago

Intel is a dog. It needs to be burnt and rebuilt from the ashes at this point. Too much legacy bloat in the org. Would be nice if my local police force went through this sort of thing every once in a while.

ip26• 2 years ago

They have 125,000 employees and 13B in revenue. TSMC, Nvidia, and AMD combined (fab, GPU, CPU) have around 88,000 employees on 710B in revenue. Intel may honestly have far more headcount than they need.

trhway• 2 years ago

710B in revenue

it seems you're a 0 off.

sofixa• 2 years ago

Intel also have or had a wide variety of side businesses - compute sticks and NUCs, NICs (WiFi, Ethernet, optics), datacenter SSDs, and probably other things I'm forgetting.

whywhywhywhy• 2 years ago

Putting it in perspective like that they should be cutting even more.

anothernewdude2• 2 years ago

As an investor, if a company doesn't know what to do with their employees - it's a bad signal.

reliabilityguy• 2 years ago

The Boeing way!

dbg31415• 2 years ago

Well, McDonnell Douglas actually…

But those guys were so good they got Boeing to buy Boeing for them using Boeing’s own money.

Karupan• 2 years ago

An engine of financial performance

Cool, new strategy?!

Through our voluntary early retirement and separation offerings, we are more than halfway to our workforce reduction target of approximately 15,000 by the end of the year. We still have difficult decisions to make and will notify impacted employees in the middle of October.

Oh right.

dboreham• 2 years ago

Beatings to continue..

jordanb4• 2 years ago

Silly me I thought Intel was a chip company. Turns out it's an "engine of financial performance."

blantonl• 2 years ago

Every company should strive to be an "engine of financial performance."

What other expectations do you have of Intel?

The amount of engine metaphors I could toss into this discussion are endless.

yazzku• 2 years ago

Gonna be the finest engine you've seen since the industrial revolution. Grease those gears, guys, we're shedding a head count of no less than 15,000 to keep this baby going. And that's just this year.

Qem• 2 years ago

Must be an internal combustion engine, because it's moved by discrete firings.

htrp2• 2 years ago

Additionally, we are implementing plans to reduce or exit about two-thirds of our real estate globally by the end of the year.

But we'll still want everyone back in office in Q1 25

geodel• 2 years ago

Well, they are using Advanced Packaging

cameldrv2• 2 years ago

Man this is sad. My read is that they’re throwing in the towel and they’re going to milk their x86 duopoly and government subsidies through a steady, managed decline into irrelevance.

starspangled• 2 years ago

Throwing in the towel on what?

ilyagr3• 2 years ago

I see "giving up" between the lines of:

A key priority for Intel Foundry is to increase our capital efficiency. <...> Now that we have completed our transition to EUV, it’s time to shift from a period of accelerated investment to a more normalized cadence of node development and a more flexible and efficient capital plan.

That is, they no longer see a way and will no longer try to turn money into real innovation, at least as far as chip manufacturing is concerned.

xtracto• 2 years ago

They are entering their IBM phase.

htrp2• 2 years ago

Intel Global Foundry Services Solutions doesn't yet exist.....

xhkkffbf• 2 years ago

IBM may not be the world leader any more in a number of ways, but that doesn't mean they're not relevant to all of their customers. So maybe the x86 will just limp along, but it's still doing pretty well. By the end of the 80s, the RISC guys were going to dethrone the CISC monsters. It's taken them decades to get this far.

profsummergig• 2 years ago

After a few nails in its coffin, a Chinese co. will acquire it, and then the West will wonder how they could let such foundational tech be lost to a competitor nation.

cameldrv2• 2 years ago

And, if this, in fact, is the strategy, perhaps the government should decline to provide the subsidies and instead reallocate the money to younger hungrier companies. The subsidies are supposed to be to maintain long-term American competitiveness, but to me it's fairly clear that Intel is not going to provide that even with the government money.

justinclift• 2 years ago

a Chinese co. will acquire it

That would be outright blocked under any number (other than 0) of "national security interests" type of thing.

BoredPositron• 2 years ago

Meh... I am fine with that I hate having these zombie tech corps lingering around.

nxobject• 2 years ago

A few things that I noticed in passing:

- Intel’s divesting from Altera;

- Intel seems to be eschewing the consumer device/computer market for more B2B custom collaborations, e.g. with AWS and hinted later on.

A lot of retrenchment from Intel. Once Foundry’s no longer embarrassing to Intel, though, what’s their plan for anticipating the future?

duskwuff• 2 years ago

- Intel’s divesting from Altera;

That's been in the works since last year.

https://www.eejournal.com/article/intel-plans-to-spin-off-fp...

ecshafer• 2 years ago

Altera has been known but its so sad. They bought them less than a decade ago for $13B and did nothing with it. They really got themselves into a great position for Heterogeneous computing and then just did nothing.

sterlind• 2 years ago

It's depressing. This should be an age of new hardware, with near-memory computing and flexible architecture. Instead it's GPUs for the foreseeable future, Nvidia has a near monopoly, AMD seems uninterested (despite also owning Xilinx), and Intel's throwing in the towel.

I wanted to prototype a systolic array coupled with a DRAM slice to hold the weight matrix, but there's not even DRAM blocks distributed on any of the FPGAs I saw. I guess Xilinx has HBM but still not quite what I wanted.

arder2• 2 years ago

Hold up, they didn't do nothing. They tried and failed. There were several attempts at packaging an FPGA with a CPU and none of them worked.

BeetleB7• 2 years ago

They tried a lot of things with Altera and failed. The real problem is the price they paid (it was more than $13B). At the time they bought it, Altera had net revenues of $0.5B. They simply paid too much to ever recoup the expense.

ilyagr3• 2 years ago

I wonder: if my sentiment from https://news.ycombinator.com/item?id=41587866 is correct and Intel is essentially giving up on innovation in chip fabrication, what, if anything, does this mean for AMD? I'm quite ignorant on how AMD works, e.g. do they even have a chip fabrication plants?

If they do, can they compete with Intel's for US govt grants, or has that ship sailed now that Intel got a grant?

If not, is there room for meaningful innovation in x86 chip design?

How about TSMC? Do they now have a monopoly on state-of-the-art chip fabrication?

unsnap_biceps• 2 years ago

is there room for meaningful innovation in x86 chip design?

I think there is plenty of room for meaningful innovation. x86 won't ever hold the crown for performance per watt, but could keep building on just raw total performance and extremely wide vectors. Why stop at AVX10? Let's move to supporting 1024/2048 bits or even, eventually, get to full page size vector instructions at 4096 bytes!

alephnerd2• 2 years ago

I wonder: if my sentiment from https://news.ycombinator.com/item?id=41587866 is correct and Intel is essentially giving up on innovation in chip fabrication

Ignore HN. Almost every commenter on here is well outside of their depth.

Intel's been putting a significant amount of money into adopting High NA EUV in 18A, which is bleeding edge enough for a decade.

Furthermore, even though TSMC and Fabrication have become hot words on HN recently, it has been a financial dead end for almost 15 years now. This is why TSMC, UMC, and Samsung cornered the chip fabrication market - the margins are very very low and the upfront costs are very very high.

There are 3 core processes to bringing a chip to market

- Design: high margins, low capex, this is where American players like Nvidia, AMD, Intel, Qualcomm, etc really shine as well as their Israeli and Indian offices. This is also basically software at this point, as almost all design is done via EDA/ECAD

- Fabrication: Fabricating the aforementioned designed chips. low margins, high capex, commodified due to Taiwanese and South Korean industrial policy along with recent advances in China for 28nm processes, recently prioritized in the US due to COVID era chip shocks

- Packaging and Testing: packaging fabricated chips. low margins, high capex, commodified due to Malaysian, Thai, Chinese, South Korean, Japanese industrial policy, recently prioritized in the US due to COVID era chips shock.

Before the mid-2010s, American companies like AMD, Intel, and IBM Microelectronics used to do all 3, but the low margins of Fabrication and Packaging caused players like IBM Microelectronics and AMD to almost go bankrupt, forcing both of them to divest their fabrication and packaging capacity to a spinoff called GlobalFoundaries. Intel kept their packaging and fabrication capacity, but it has a negative impact on Intel's R&D capacity in the 2010s.

Now with CHIPS Act money, Intel is modernizing it's fabrication and packaging offerings, and splitting them off into "Intel Foundary Services" while keeping design under "Intel".

There are a lot more intricacies as well (bleeding edge nodes vs lagging nodes, analog chips, memory chips, the entire EDA tooling chain, etc) with entirely distinct market dynamics that deserve a paper unto themselves, but that's a long story and I really really hate HN.

ilyagr3• 2 years ago

Thanks, this is interesting to read!

If what you're saying is true, it's a bit sad that all these large-capex industries that are so important for society to have expertise and progress in are not considered promising or competitive.

magicalhippo• 2 years ago

do they even have a chip fabrication plants

They had, but divested[1] as they couldn't keep up. GloFo stopped chasing the cutting edge, but does have 12-14 nm capability thanks to deals with ST and Samsung.

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

arenaninja• 2 years ago

The death of tick tock :(

MegaDeKay2• 2 years ago

No mention of their discrete GPU line in this. I don't know if that is good news or bad for Battlemage and follow-on products.

jauntywundrkind• 2 years ago

I have a lot of hope for Intel getting back in the x86 ring with real contendors. Lunar Lake is looking incredible (the MSI Claw with it looks like a stunning system), Arrow Lake ought to be solid.

I am a little curious to see where Intel goes with data-center chips. They have been expensive and hot, and the many-small-core offerings at least finds efficiency again. Otherwise it's less clear to me what coming up has promise, and gee, it sure seems like Nvidia and AMD both are super focused on that massive data center market.

One thing that was super interesting in this message was what Amazon want's Intel's 18A for. It's not a CPU, they want it for AI fabric? Interesting seeing the switches be the highest demand. Switch chips are normally quite big, yes? Given how much likelier defects are as size increases, that's going to be a hard test - where-as AMD for example has lots of small CCD's it can stack on a interposer. But also Intel has some fantastic advanced packaging that maybe makes them an ideal partner here - maybe EIMB bridges to PHY or on-package optics stuff, what's grown up from integrated Omni-Path (although not Omni-Path itself, that got sold off already). https://www.intel.com/content/www/us/en/newsroom/news/intel-...

ChrisArchitect• 2 years ago

[dupe]

Discussion: https://news.ycombinator.com/item?id=41562481

light_hue_1• 2 years ago

Our AI investments—including continued leadership of the AI PC category, our strong position with AI in data center

I had a lot of hope that Pat Gelsinger being an engineer would lead Intel to a revival. But this is total delusion. Intel isn't even a remote player in AI.

If they can't admit the dire situation that Intel is in, having missed the AI boat almost entirely and even managed to fall behind Apple somehow, they aren't going to find a way back.

They have nothing to offer over Nvidia for AI. They have nothing to offer over TSMC when it comes to their fab aside from being a US based alternative (and taking billions from taxpayers). x86 has nothing new to offer; their insane moves with AVX have fragmented the platform terribly. It's not even easy to ship high performance x86 code these days.

Looks like all this is, is an announcement that they're going to fire a lot of people soon to make their financials look good while the ship continues to sink.

Bluebirt• 2 years ago

Okay, this means reducing Innovation to a bare minimum I guess. It is baffling to me, how this giant company manages to suck at everything they touch. They managed to be unrelevant in every trend over the past decade.

hackernoops2• 2 years ago

DEI

scovetta• 2 years ago

I don't understand why executives don't seem to understand the basics of effective communication. It's not like they don't have access to staff and expertise here.

When you have difficult news to share, get it out first. Be direct and authentic. Say you're sorry, that you messed up (hint: if you are the CEO, every success is partially yours and every failure is partially yours).

BeetleB7• 2 years ago

Are you referring to the layoffs? This is a followup communication - so no need to lead with it. Everyone knows about it already.

pharos92• 2 years ago

It's cringe when a bean-counter attempts to be an engineer, but it's pathetic when an engineer attempts to be a bean counter.

arder2• 2 years ago

It's really sad to see how far Intel has sunk, back in the good old days they'd lay off 10,000 at the drop of a hat. These days they're so rubbish it's taking them months to deliver those juicy juicy firings. Nice to see they're still doing well with their arbitrary movement of thousands of employees between TLAs though. Man that CCG is looking juicy right now.

limpbizkitfan• 2 years ago

Refocus on x86? Why would they double down on the archaic stuff?

Intel has all the opportunity to innovate and they choose not to.

A Message from Intel CEO Pat Gelsinger to Employees

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