Intel doesn't know how to be a foundry, Tim Cook reportedly said in 2011

https://www.tomshardware.com/tech-industry/tsmc-founder-says-tim-cook-told-him-intel-did-not-know-how-to-be-a-foundry

by retskrad • 1 year ago

157 90 1 year ago

tomshardware.com

raverbashing• 1 year ago

Well, he's not wrong

Subdivisions that only work for one customer grow around all their idiosyncrasies and it's hard to adapt later

Actually putting the design work into something you can work with is hard work

duxup4• 1 year ago

I’ve seen that with startups. I’ve seen that with established very successful companies that try to sell to new customers.

You try to do something different, and every business process and management member is there to stop you because of what they learned previously … when working with a different customer or market.

The Steve Jobs story about resistance to developing a mouse in house is a good example.

dlivingston• 1 year ago

What's the Steve Jobs mouse story?

zdragnar• 1 year ago

I've seen it kill more than one company. The company is so bent out of shape for that one special customer, that as soon as the relationship is over or isn't as profitable as they'd hoped, they aren't able to actually support any other customers.

tyleo• 1 year ago

If you haven’t listened to it already, Acquired remastered their TSMC episode. You can find that here https://www.acquired.fm/episodes/tsmc-remastered

If you are interested in getting more context on TSMC, this is a great place to start.

davepeck• 1 year ago

And to be clear, they also flew to Taiwan and interviewed Morris in English for what appears to be the first time in over 15 years:

https://www.acquired.fm/episodes/tsmc-founder-morris-chang

A tiny bit of this (excellent!) interview led to the story we're all commenting on.

talldayo• 1 year ago

Sure they do. They just don't have any capacity for producing the chip density that Apple demands. It's like showing up to a motorcycle factory and complaining that they don't know how to manufacture cars.

If America wanted EULV fabrication, it had to be organized and funded by the state. American fabs already made their business decision.

CharlesW• 1 year ago

They just don't have any capacity for producing the chip density that Apple demands.

TFA says that the "Intel just does not know how to be a foundry" quote is from 2011 (14 years ago), and referred to Intel's lack of a "customer-centric mindset" rather than specific manufacturing capabilities.

wtallis4• 1 year ago

The article is talking about Intel's capabilities almost 15 years ago. EUVL is not part of the conversation. This was when Intel was bringing up their first FinFET process.

It's pretty widely known and documented that Intel at that time was in a horrible position to be a foundry for outside designers, especially ones that wanted to be able to design for more than one foundry.

scrlk2• 1 year ago

If America wanted EULV fabrication, it had to be organized and funded by the state.

The DoE funded initial research in to EUV via the national labs and EUV LLC back in the 90s. The IP was licenced to ASML, whilst Canon and Nikon (the leaders in lithography at the time) were blocked.

Tostino• 1 year ago

People in government in the 90s made a good call, and we haven't done anything since then to ensure it actually played out, until the post WW2 world order was already extremely unstable.

We have had multiple rounds of "why are we paying for any of this?" In our federal government since then.

01100011• 1 year ago

In 2011. Seems like that should be in the title.

behringer• 1 year ago

"When the customer asks a lot of things, we have learned to respond to every request," Chang said. "Some of them were crazy, some of them were irrational, [but] we respond to each request courteously. […] Intel has never done that, I knew a lot of customers of Intel's here in Taiwan and all [of them] wished that there were another supplier."

Companies just don't get it, that customer service is almost always the most important aspect of the company. The customer will put up with a lot of bullshit if communication is rock solid.

Handing off your customer service to agents that don't have reading comprehension, who don't have any authority, or who are completely non-understanding is going to hurt business.

And I'm not talking about customer service that can write flully emails thanking and apologizing and butt kissing, I'm talking about good customer service is when the agent understands the request, takes it seriously, runs it up the flag pole if needed, and can act on it.

duxup4• 1 year ago

I have to manage my personal urge to reject or overreact with customers all the time.

Customers do come up with a bonkers ideas / UI that's horrendous or just unworkable internal logic. And yet if I sit with them and we talk about "what can we do to solve the problem / enhance the product / get your goal done" I find they often come up with some good ideas and are happy to discard their initial madness.

ChrisMarshallNY• 1 year ago

That's "Beans and Noses": https://archive.uie.com/brainsparks/2011/07/08/beans-and-nos...

georgeburdell2• 1 year ago

(2011). And Cook was right. I worked at Intel for a few years during that decade and the foundry efforts were just not set up for success; in my area, they hired a bunch of new people, put up a firewall between us internal folks and the foundry folks, then without any guidance turned them loose. I was not even allowed to talk to them to troubleshoot equipment issues. They also got all of the equipment that we’d rejected for various reasons like poor process control, so they were newbies with worse equipment trying to start up a new group without help beyond what vendors would provide (for $$$)

I have no insight into the customer facing side

michaeljx• 1 year ago

interesting perspective. Care to elaborate a bit more? Where you in the design department? Why did they put up chinese walls? Was it to enable the foundry to have other customers other than Intel designs? Why did you have similar type of equipment? Were you also manufacturing chipsets? If so, why didn't they expand your division to become a foundry?

scrlk2• 1 year ago

There's a good video from Asianometry (Lessons from Intel's First Foundry): https://www.youtube.com/watch?v=-Y9LWYmVQu0

If you're an Intel foundry customer, you don't want your design or IP leaking across to Intel's product team, who might be a competitor.

thetopher• 1 year ago

Sounds like they were following some advice from “The Innovator’s Dilemma” by separating the business groups.

georgeburdell2• 1 year ago

I was in a fab module. The firewall part makes sense to not cross pollinate IP internally vs. externally, but it was taken to the extreme and management moved zero internal employees over to external so it was Intel’s tools and recipes but not the talent who knows all the tribal stuff.

twoodfin• 1 year ago

Given what we know about Apple and Cook, this seems like at least a modestly foolish story for Chang to have told.

Apple’s senior leadership has always for better or worse had long memories and held even longer grudges. And they don’t like partners to speak for them, or create the impression—even if accurate—that Apple has a dependency on a single supplier.

greedo• 1 year ago

That's true when Apple has alternative suppliers, ie graphic cards when nVidia blabs before a presentation.

But who is going to replace TSMC? Sure someone will in 15-20 years, but for now...

Etheryte• 1 year ago

You could've said the same about Intel at one point, but here we are years later.

caycep• 1 year ago

they have used Samsung before...maybe with middling results but if push came to shove, Samsung's fabs have been the backup I think.

mushufasa• 1 year ago

Chang is 93 years old. He can say whatever he wants.

djcooley• 1 year ago

Second this. I don't think most people on hn understand how powerful he is.

scarface_7411• 1 year ago

What is Apple going to do? Not use TSMC?

alex-mohr2• 1 year ago

Clearly the next step after building your own CPU and SOC is to start Apple Foundry and become totally vertically integrated?

epistasis• 1 year ago

Particularly relevant with the 100% tariffs that Trump is going to try to ram through:

https://www.tomshardware.com/tech-industry/semiconductors/ta...

samtheprogram• 1 year ago

They’re already running a plant in Arizona, and I heard it’s going really well. It won’t matter.

wtallis4• 1 year ago

The plant in Arizona is deliberately not equipped to produce current-gen chips.

th0ma52• 1 year ago

That is in an international economic zone and would be subject to tariffs as well as for supplies.

bryanlarsen• 1 year ago

Did you forget the sarcasm flag?

duskwuff2• 1 year ago

I wouldn't count on that. It's going to be some time before the Arizona plant is fully operational, and it's not a substitute for the production capacity in Taiwan. It's also very possible that TSMC will pause or halt production in the US if they're targeted by trade sanctions.

mandevil2• 1 year ago

Besides the fact that the AZ plant does not produce TSMC's bleeding edge process (3nm) but the older 4nm, the product from that fab can't be delivered directly to a customer. Every wafer at that plant has to be shipped back to Taiwan for packaging and can only then be delivered to a customer.

So a blanket tariff would definitely apply even to the production of that plant. Which is why lots of CEO's (including Tim Cook) are trying to suck-up to Trump right now, to get an exception made for their imports.

GeekyBear2• 1 year ago

Especially now that Taiwan has removed restrictions on producing TSMC's most advanced nodes on foreign soil.

https://www.techpowerup.com/331104/tsmc-granted-government-p...

scarface_7411• 1 year ago

Cook knows how to kiss up to Trump. There is a reason Apple wasn’t affected by China tariffs the first time .

ksec• 1 year ago

TSMC founder says Tim Cook told him in 2011 that Intel did not know how to be a foundry

That is the Original Title. It could be edited as "Tim Cook told TSMC in 2011 that Intel did not know how to be a foundry" - That would still have been accurate with the date on.

Now the title has been editorialised, and meant or imply something else. Like most of the comments are already suggesting.

insane_dreamer• 1 year ago

Just think where Intel would be today if they had truly leaned in and made the necessary changes to supply the iPhone chips.

wmf• 1 year ago

Tim Cook would have negotiated away their profit margins?

scarface_7411• 1 year ago

And how is that different than what is happening now?

https://www.intc.com/news-events/press-releases/detail/1716/...

Third-quarter GAAP earnings (loss) per share (EPS) attributable to Intel was $(3.88); non-GAAP EPS attributable to Intel was $(0.46).

xmodem• 1 year ago

Yeah, like they've done to TSMC over the past decade. (/s)

foota• 1 year ago

Wouldn't they still be behind on the chip technology curve? Seems like this would hurt Apple, not dramatically help Intel.

wtallis4• 1 year ago

If Intel Foundry starting in 2011 had a non-trivial external customer base, Intel management would not have been so easily able to ignore the signs of trouble with their 10nm process and remain in denial. Their wake-up call would have been Apple jumping ship after a year or so, instead of Intel wasting several years re-releasing Skylake without even considering porting their newer CPU architecture to be built on the process that actually worked.

The first 10nm chip Intel actually got out the door (in tiny quantities) had the entire GPU disabled because their high-density transistor library was broken. That's exactly what Apple would have been using for most or all of an Intel-fabbed iPad chip, so Intel would have not been able to maintain the fiction that their 10nm process was mostly or even somewhat healthy.

BeetleB2• 1 year ago

This is back in 2011, when Intel was first flirting with the Foundry business, and has little bearing to their efforts today. That first effort mostly died. The goal wasn't to become a major player like Samsung/TSMC, but to ensure factories don't sit idle (i.e. just fill in the gaps with small customers). Intel products would get priority.

The current vision is very different: It's to somewhat separate the fabs and Intel's products, and the end goal is that Intel Products will just be another Foundry customer.

Whether they can achieve this is another story.

wtallis4• 1 year ago

Arguably, Intel has already achieved the most important part of the Intel Foundry strategy: letting the CPU designers target whatever fab is best for their needs. Getting most of the consumer CPU moved to TSMC for Meteor Lake a year ago and the rest of it moved to TSMC last fall is hugely important. Intel Foundry cannot count on having a big customer, and the product line isn't forced to stick exclusively with failing fabs.

jonathaneunice• 1 year ago

This situation has been and maybe always will be common. Those who view themselves as integrated manufacturers of *products* often cannot equally package, deliver, and sell their component *services*. No matter how good those services are at delivering the end product—and sometimes they are completely world-class or genuinely unique—they're almost always highly designed, refined, and evolved over years to map to the specific end products and their one business. They are NOT designed, refined, or evolved to be reusable, retargetable capabilities for all interested parties.

By any rights, the major systems manufacturers of the 2000s—Cisco, Dell, HP, IBM, Sun Microsystems—should have had an enormous leg up in becoming the planetary scale, "red shift" cloud computing providers of today. Let's kick major operating environment vendors of that era in for good measure—Microsoft, Red Hat, VMware. Maybe even Oracle and SAP. They had the technical capabilities, the economies of scale, the vendor ecosystems, the customer relationships, the financial might. "Permission to win." Yet, only a few have made it. Microsoft has made the transition with Azure, but it's been a long hard pull. Maybe a few participation trophies for IBM and Oracle. But as a group, where are they, cloud-wise? Not too impressive that AWS and Google and others that had no classic "required assets" or "permission to win" have wiped them off the playing field or kicked them deep into the "others" bin.

You can call that classic innovator's dilemma, and there's a lot to that. It's insanely, unfathomably hard to disrupt your own current successful business for new delivery models and aspirations. But there's something else as well: services and products are different beasts. They take different mindsets, expectations, business models, and metrics. All the best to Intel in becoming that new thing, a service provider. But it not just a side gig or slight extension. It's a radically different thing, and it's no wonder the highly successful product Intel of 2011 wasn't also a good service provider.

gsibble• 1 year ago

Counter-Point:

GCP and AWS came out of product focused companies that effectively converted to providing the services they used internally.

ethbr12• 1 year ago

I'd never really thought about "How did hyperscale cloud providers become cloud providers?" And it's surprisingly distinct.

AWS: Bezos API memo -> internal infra services that were external ready -> polishing and exposing those one-by-one

GCP: Internal architectural/technical excellence -> new org that attempted to productize v2.0 of those services

Azure: Believe it was mostly ground-up build as a new org/product?

(No idea where Oracle cloud came from, internally)

twunde• 1 year ago

It's rare but does happen. And frankly I'd only include AWS in the counterpoint. Google really struggled with GCP. Outside of Bigquery and Spanner many/most of the services were custom built for GCP and were not used internally. Hell they built a VM service when basically everything ran on Borg internally

scarface_7411• 1 year ago

This is not true as far as AWS and this is a myth that needs to die.

http://www.quora.com/How-and-why-did-Amazon-get-into-the-clo...

AWS was always purpose built and designed as a new product and Amazon Retail has a completely different architecture from AWS.

True, now some Amazon workloads have been moved over to AWS. But Amazon Retail is treated like an AWS customer.

Even internally, AWS employees use a different system to stand up internal sandboxes than CDO (Consumer Division Operations).

alex-mohr2• 1 year ago

Also a myth for GCE.

From a technical perspective, App Engine and Compute Engine were built on top of internal infrastructure (borg), but did not expose borg directly. And there were a number of interesting mismatches between the semantics that customers expected of VMs and what borg offered to its containers that eventually resulted in dedicated borg clusters with different configs for cloud. And some retrospectives on whether building on borg was a better option than going bare metal directly.

Org-wise, the App Engine team was first and not part of the internal-focused Technical Infrastructure teams. GCS came next, and it too was not part of the canonical storage org. Then GCE, which was only possible because it was either written off or at least tolerated as an experiment by most, with a few key people providing behind-the-scenes support to make it happen -- especially in networking. It likely also helped that GAE was in SF and the rest of GCP in Seattle/Kirkland initially, so geo provided some insulation too.

The dominant perspective internally was that Google's technical infrastructure was its secret sauce, so why would they give it away to others? It took a long time to change that.

[Disclosure/source: I was on GCE and helped get it launched.]

npalli• 1 year ago

Less of a technical reason than the fact that TSMC was willing to go farther in accommodating Apple's demand (which is right). Also, this is Morris Chang relaying, so not totally unbiased.

   The implication was that Intel lacked the customer-centric mindset required for a foundry business. Unlike TSMC, which tailors its process technologies to meet customer needs, Intel was used to designing and producing its own chips and struggled to adapt to servicing external clients. By contrast, Apple valued TSMC's ability to listen and respond to specific demands, something Intel historically did not do.

timewizard• 1 year ago

"Intel makes more than enough money that they don't have to cater any part of their design to external partners and historically have done very little of this type of work. Our use case was simply not on their radar."

On the other hand I can appreciate that Intel chips are more of a known quantity than the various ARM designs that are floating around out there.

scarface_7411• 1 year ago

And just a note, Intel is losing money and still as of the third quarter of last year paying a dividend while complaining about cash flow

xyst• 1 year ago

Thanks to neoliberal economic theory, the public CEOs must deliver shareholder value at all costs! In this lens, they are doing “great”

But actual company itself and products are bleeding internally from decades of mismanagement.

BeetleB2• 1 year ago

Intel suspended the dividend.

kmeisthax• 1 year ago

So, Intel's fault was being focused on selling you the whole widget and telling you what you wanted, instead of something that met your needs. Just like Apple, IMO - the whole "product vision" thing is great when it's about figuring out how to sell a good smartphone and terrible when it's selling iPads with desktop chips in them that can't do any useful professional work outside of drawing.

Intel doesn't know how to be a foundry, Tim Cook reportedly said in 2011

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