Intel's stock is jumping at this announcement, but I look at it as a bad signal for Intel 18a. If 18a was looking to be a smash hit then I don't think Pat gets retired. If 18a is a success then it is an even more short-sighted decision by the board.
What this likely means is two-fold:
1. Intel 18a is being delayed further and/or there are significant issues that will hamstring performance.
2. Pat is/was unwilling to split the foundry and design business / be part of a M&A but the board wants to do one or the other.
If 18a is not ready I think the best case scenario for Intel is a merger with AMD. The US Govt would probably co-sign on it for national security concerns overriding the fact that it creates an absolute monopoly on x86 processors. The moat of the two companies together would give the new combined company plenty of time to ramp up their fabs.
Aside from the x86 monopoly that would create, I don't think Intel has much of value to AMD at this point other than the fabs (which aren't delivering). IMHO if Intel is failing, let them fail and others will buy the pieces in bankruptcy. This would probably benefit several other companies that could use 22nm and up fab capacity and someone could even pick up the x86 and graphics businesses.
BTW I think at this point the graphics business is more valuable. Even though Intel is in 3rd place there are many players in the SoC world that can use a good GPU. You can build a SoC with Intel, ARM, or RISC-V but they all need a GPU.
Restoring Intel's foundry lead starting with 18A was central to Pat's vision and he essentially staked his job on it. 18A is supposed to enter production next year but recent rumors is that it's broken.
The best they could do with the GFX business is a public execution. We've been hearing about terrible Intel GFX for 15 years and how they are just on the cusp of making one that is bad (not terrible). Most people who've been following hardware think Intel and GFX is just an oxymoron. Wall Street might see some value in it, but the rest of us, no.
The problem with the "use the GPU in a SoC" proposition is everyone that makes the rest of a SoC also already has a GPU for it. Often better than what Intel can offer in terms of perf/die space or perf/watt. These SoC solutions tend to coalesce around tile based designs which keep memory bandwidth and power needs down compared to the traditional desktop IMR designs Intel has.
An x86 monopoly in the late 80s was a thing, but not now.
Today, there are sufficient competitive chip architectures with cross-compatible operating systems and virtualization that x86 does not represent control of the computing market in a manner that should prevent such a merger: ARM licensees, including the special case of Apple Silicon, Snapdragon, NVIDIA SOCs, RISC-V...
Windows, MacOS and Linux all run competitively on multiple non-x86 architectures.
>Gelsinger, who resigned on Dec. 1, left after a board meeting last week during which directors felt Gelsinger's costly and ambitious plan to turn Intel around was not working and the progress of change was not fast enough, according to a person familiar with the matter. The board told Gelsinger he could retire or be removed, and he chose to step down, according to the source.
I "predicted" this three months ago (really, it was inevitable), but gave it 1-6 months.
Now for the what-happens-next popcorn. In a normal world, they would go bankrupt, but this is very much not a normal world.
In the mean time, AMD/ARM already won phones, table and game consoles.
Server purchasing decisions aren’t made by everyday people. Intel’s roadmap in that space slipped year for year for at least 10 of the last 15 years.
That leaves Intel with the fraction of the non-mac laptop market that’s made up of people that haven’t been paying attention for the last ten years, and don’t ask anyone who has.
Let them die. Maybe we'd actually see some new competition?
He's also 63. Has plenty of money to survive the rest of his life. Has eight grandchildren. There's so much more to life than business. What's to say he doesn't want to simply enjoy life with more connection and community to loved ones around him?
I don’t know much about this guy but it’s reasonable to assume that any C-level exec will hold on to the position for dear life until they are forced out.
News: https://www.cnbc.com/2024/12/02/intel-ceo-pat-gelsinger-is-o...
Intel CEO Pat Gelsinger ousted by board
Doubt.
Neither of the companies is particularly competitive on either processor or GPU architecture nor fabrication.
A merger of those entities looks like nothing but a recipe for further x86 stagnation and an even quicker death for the entities involved imho.
In particular I cannot see what's good in it for AMD. The fabs have no use/clear path forward. Their processors/gpu either match our outmatch the Intel offering.
A Broadcom/Apple takeover of Intel sounds much more reasonable.
Out of curiosity, what would make Intel interesting to Apple? Apple already acquired Intel's modem business and they have their own CPU and GPU.
I can, but it's not technical. Intel has a huge advantage in several markets, and has strong relationships with many OEMs like Dell. Intel, even though their market cap is now a fraction of AMD's, still has a huge lead in marketshare in OEM systems and servers. (Several other posts in this thread have real numbers.)
If AMD bought out Intel, it would now get all of that, and be able to push all these OEM and server customers into AMD's solutions instead.
Who is then? Apple is of course still ahead in lower power chips. But Apple is not in the the desktop/workstation/server market and there are hardly any alternatives to AMD or Intel there.
e.g. M2 Ultra Apple's fastest "desktop" CPU is slower than the 14700K you can get for $350. Seems pretty competitive...
I'm not convinced of this. Fabs are incredibly expensive businesses. Intel has failed to keep up and AMD spun off their fabs to use TSMC.
There is also ARM knocking at the door for general computing. It's already gaining traction in previously x86 dominated markets.
The model for US based fabbing has to include selling large portions of capacity to third party ASIC manufacturers, otherwise I see it as doomed to failure.
I know anecdotes aren't data, but I was talking with a colleague about chips recently and he noticed that converting all of his cloud JVM deployments to ARM machines both improved performance and lowered costs. The costs might not even be the chips themselves, but less power and thermal requirements that lowers the OpEx spend.
IT departments are not going to stop buying x86 processors until they absolutely are forced to. Gamers are not going to switch unless performance is actually better. There just isn't the incentive to switch.
I say, diversity rules!
[1]: https://research.ibm.com/blog/northpole-llm-inference-result...
not sure what a "grown" semiconductor fab is but follow this link and sort by location https://en.wikipedia.org/wiki/List_of_semiconductor_fabricat... The number of homegrown companies with fabs is greater than 1
Doubtful that is the issue with Intel's track record. Curious when we will know if 18A is competitive or not.
> If 18a is not ready I think the best case scenario for Intel is a merger with AMD. The US Govt would probably co-sign on it for national security concerns overriding the fact that it creates an absolute monopoly on x86 processors. The moat of the two companies together would give the new combined company plenty of time to ramp up their fabs.
No way other countries would allow that. If A-tel (Amd-inTEL) can not sell to the EU the merger will not happen.
What the EU gonna do then? Stop buying computers? Perform rapid continental ARM transition for mythical amount of money?
Giving life support to dinosaurs isn't how you create a competitive economy.
However, I think the fab and design should be separate companies, with separate accountability and goals/objectives. There is just too much baggage by keeping them coupled. It doesn't let either part of the company spread their wings and reach their full potential when they are attached at the hip. From the outside perspective, that is the thing that Pat has seemingly been focused on, keeping it together, and its why people have lost faith in his leadership.
I also don't think that from a investment / stock standpoint that accelerating the depreciation / losses related to restructuring on the most recent quarter was a wise decision, since what Intel really needed was a huge win right now.
Look at what Pat did to VMware. He's doing the exact same thing at Intel. He came in, muddied the waters by hiring way too many people to do way too many things and none of them got done appropriately. Pat is a huge part of the problem.
I had the unfortunate pleasure of watching him not understand, at all, VMware's core competency. It was a nightmare of misunderstanding and waste in that company under his leadership.
Intel turned into even more of a laughing stock under Gelsinger. I say: good riddance. He burned time, capital and people at both VMware and Intel. He's a cancer as a CEO.
https://finance.yahoo.com/news/intels-7-86-billion-subsidy-0...
Dropping Pat will alleviate their feeling of having to do "something."
As for M&A, it wouldn't just have to be approved at the DoJ. And the Chinese will never ever approve of it (but would have to). If they do a transaction without approval from the CMA, it would be like a nuclear financial war.
I think it's high time to gut intel into parts, a la GE. Sell the Fabless to QCOM or BCOM. Sell the Fabs of one by one to GF, Tower, UMC or even tsmc. Find a PE firm for the leading edge and reconstrue it with significant rnd credits as a kind of Bell labs 2.0.
Or something like that.
If this happens, couldn’t they force them giving out licenses as a condition? The licensing thing has been such an impediment to competition that it seems like it’s about time anyway.
At least in theory, a fully independent, split/spun out standalone fab removes this concern.
That said - what does Intel have to offer the top players here? Their fabs are being state of the art. And what's the standalone value of post-spin fabless Intel if their chip designs are as behind as their fabs?
This certainly presents a conundrum for US policy since we need fabs domestically for national security reasons, but the domestically owned ones are behind.
Why would AMD want a merger? They aren't a charity, and certainly don't need the distraction.
Sure they won't allow Intel to be bought by a foreign company, but surely everyone would much rather see Intel being bought by literally any other company than AMD and Nvidia.
One of the reasons where Intel "let" AMD compete in the x86 space is US Gov requirements for being able to source chips from two vendors at least
Oh man, the risk in that is extreme. We are moving away from x86 in general, but wow, that's... a big jump in risk.
Does this mean that Intel's fabs should split for Global Foundries, and the Intel design team should go to AMD?
What could go wrong?
This implies that he was pushed out, rather than chose to retire. I can't see anything in the article to suggest this, do you have another source?
I think a merger with Nvidia would be more likely given the antitrust issues that a merger with AMD would bring up.
That's the best exit case for the shareholders. It's the worst case for Intel's employees, customers and partners.
> would probably co-sign on it for national security concerns
This is equally laughable and detestable at this point in history. My personal security is not impacted by this at all. Weapons manufacturers honestly should not have a seat at this discussion.
> overriding the fact that it creates an absolute monopoly on x86 processors.
Yet this isn't a problem for "national security?" This is why I find these sentiments completely ridiculous fabianesque nonsense.
Oh no no no no. Oh hell no. For now, we need competition in the x86 market, and that would kill it dead. Imagine Intel re-releasing the Core 2 Quad, forever.
Nonetheless his comment on nvidia being lucky was everything than a smart comment.
The struggling companies with totally rotten management like to bring such "stars" (pretty shrewd people who built themselves a cute public image of supposedly talented engineers who got promoted into higher management on their merits) - Yahoo/Meyers come to mind as another example - who de-facto complete the destruction of the company while the management rides the gravy train.
They are in a deep hole, and it is difficult to see a future where they can restore their former glory in the foreseeable future.
ARM isn't doing any such thing. Apple & Qualcomm are, though. ARM itself if anything looks weak. Their mobile cores have stagnated, their laptop attempts complete failures, and while there's hints of life in data center it also seems mediocre overall.
It's pretty much two decades at this point.
It’s a really bad sign when a customer decides it can out innovate you by internally copying your entire business and production line.
I'm seeing the same thing now with Intel QAT / IAA / DSA. Only niche software support. Only AWS seems to have it and those "bare metal" machines don't even have local NVMe.
About 10 years ago Intel Research was publishing a lot of great research but no software for the users.
Contrast it with Nvidia and their amazing software stack and support for their hardware.
Every aspect of that document was just dripping in corporate dinosaur / MBA practices.
For example, they include 4 cores of these accelerators in most of their Xeons, but soft fuse them off unless you buy a license.
Nobody is going to buy that license. Okay, maybe one or two hyperscalers, but nobody else for certain.
It's ultra-important with a feature like this to make it available to everybody, so that software is written to utilise it. This includes the starving university student contributing to Postgres, not just some big-enterprise customer that merely buys their software!
They're doing the same stupid "gating" with AVX-512 as well, where it's physically included in desktop chips, but it is fused off so that server parts can be "differentiated".
Meanwhile AMD just makes one compute tile that has a uniform programming API across both desktop and server chips. This means that geeks tuning their software to run on their own PCs are inadvertently optimising them for AMD's server chips as well!
PS: Microsoft figured this out a while ago and they fixed some of their products like SQL Server. It now enables practically all features in all SKUs. Previously when only Enterprise Edition has certain programmability features nobody would use them because software vendors couldn't write software that customers couldn't install because they only had Standard Edition!
Linus seems to disagree https://m.youtube.com/watch?v=tQIdxbWhHSM
Wouldn't that just pretty much guarantee that the foundry business would fail since Intel wouldn't have any incentives to shift most of their manufacturing to TSMC? The same thing happened with AMD/Global Foundries..
Splitting Intel is necessary but probably infeasible at this point in the game. Simple fact is that Intel Foundry Services has nothing to offer against the likes of TSMC and Samsung - perhaps only cheaper prices and even then it's unproven to fab any non-Intel chips. So the only way to keep it afloat is by continuing to fab Intel's own designs, until 18A node becomes viable/ready.
He should have cut 25% of the workforce to get started (and killed the dividend).
Also - the European expansion and Ohio projects, while good short-term strategies, were too early.
Cut the ship down to size and force existing sites to refocus or be closed. Get alarmist. Make sure you cut out all the bad apples. Prune the tree. Be ruthless and determined.
They should hire Reed Hastings now. He's the OG turnaround king.
An alien from Vega looking at our constellation of tech companies and their leadership might point at an obvious answer…
And this is a problem! Most of Intel’s recent major architectural changes over the last decade or so have been flops. [1] Quite a few have been reverted, often even after they ship. I presume that Intel does not actually have many people who are really qualified to work on the architecture.
[0] I’m talking about how it interacts with an OS and how you put it together into a working system. Understand stuff like SIMD is a different thing.
[1] AVX and its successors are notable exceptions, but they still have issues, and Intel did not really rock the early implementations.
Reminds me of the Boeing managers saying that they didn't need senior engineers because its products were mature..
A few blown doors and deadly crashes later, that didn't age well..
A relative of mine with a PhD sounds exactly like this. Worked for Intel on chip-production tech then was hired by Apple about 10 years ago, working on stuff that gets mentioned in Apple keynotes.
I can actually believe this. Of most of the rest of the arguments, that tend to be rather vague, and wave at implementation, or some stock related motivation (like we need TSMCs business), a lack of genuine interest in the employees that was not sold to them or the market especially effectively seems fairly believable.
Most people are there for the chips, for making great designs in silicon, and being market leaders in CPU architecture. Not running the equivalent of an offshoring division making other people's stuff.
The entire implementation has seemed rather haphazard and not sold with much real motivation. Honestly, the entire situation feels a bit like Afghanistan (if that's a bit incendiary)
Nobody really knows why they're going. Nobody really knows what they're trying to accomplish. The objectives on the ground seem vague, ephemeral, and constantly changing. There's not much passion among the ground troops about the idea. The leaders always seem to be far away, and making strange proclamations, without actually putting boots in the dirt. The information released often feels multiple personalityish, like there's far too many cooks in the kitchen, or far too many puppeteers pulling strings in every direction. And afterward you find out it was mostly some dumpster fire driven by completely different motivations than what were publicly acknowledged.
Genuine interest is not the only way to get great results. Excellent pay can do so as well.
And lack of talent, again, excellent pay.
That's a damn shame. Big tech monopolies are screwing up the talent market. Nobody can match their comp and it's bullshit
But alas, Intel is a mega bureaucratic company with a few tiny siloed teams responsible for innovating and everyone else being test and process jockeys. I think Gelsinger wasn't given enough time, personally, and agree with the OP that even someone like Elon would struggle to keep this sinking ship afloat at this point.
BK wanted wearables and Bob Swan wanted to cut costs; neither of them were visionaries nor did they really understand that Intel was a hard tech company. Intel had achieved such dominance in such a in-demand, growing market, that all they had to do was make the technology better (smaller, faster, lower power) and the money would continue to flow. The mandate was straightforward and they failed.
No one stopped Intel from paying for talent. Intel’s shareholders decided to pay themselves instead of investing in the business by hiring great employees. That’s how you go from being a leader to a laggard.
A lot of hate for Pat Gelsinger on Reddit and YouTube from armchair experts who don't really grasp the situation Intel were in or what was needed to turn the ship around, so if he was pushed it seems like it might be to pacify the (not particularly informed) YouTube/gamer community and bump the share price. That's all speculation, though.
I'd be interested to see who Intel intends to get to run the company in his place, as that would signal which audience they're trying to keep happy here (if any).
He had two routes with the capital available following a cash injection from COVID-19 and the rapid digitization of the workplace - compete with AMD/NVIDIA, or compete with TSMC/Samsung. The only sensible option that would capture the kind of capital needed to turn the ship around would be to become a company critical to the national security of the US, during a time of geopolitical stability, onshoring chip manufacture and receiving support from the government in doing so. He could either compete with competitors at home or those abroad, but not both simultaneously. The thesis makes sense; you've lost the advantage to NVIDIA/AMD, so pivot to become a partner rather than a rival.
I don't think it's a coincidence that just a week after Intel finally received the grant from the government, he announced his departure. The CHIPS act was a seminal moment in his career. It makes sense he'd want to see that through till completion. He's 63; now is as good a time as ever to hand over the reins, in this case to a very capable duo of MJ and Zisner (who were always two of the most impressive EVPs of the bunch in my book).
https://www.bloomberg.com/news/articles/2024-12-02/intel-ceo...
In short, a bad or subpar chip design/architecture can be masked by having the chip fabricated on a leading edge node but not the inverse. Hence everyone is vying for capacity on TSMC's newest nodes - especially Apple in trying to secure all capacity for themselves.
I hold no opinion on Pat Gelsinger, but changing the CEO in the middle of ensuring that Intel remains relevant in the long term, seems like a bad move. Probably his plan for "fixing" Intel is to slow for the market and the board. Let's see who takes over, if it's not an engineer, then things just became more dangerous for Intel. The interim people are an administrator and a sales person, that does not bode well.
Wonder if they will approach Lisa Su to take the job now :D
How is it starting to turn the wheel?
However, IMO: they need somebody like Lisa Su, somebody with more of an R&D-engineering background. Gelsinger was a step in the right direction, but he got a masters degree in the 80’s and did technically hardcore stuff in the late 80’s, early 90’s. That was when stuff just started to explode.
Su finished her PhD in the 90’s, and did technically interesting stuff through the computer revolution. It appears to have made a world of difference.
I'd expect Intel marketing and Public Relations to be paying YouTube Influencers to have a particular opinion, the one most favorable to the board.
Instead of saying to AMD they will be in the rearview mirror, they should have been paranoid. Not do stupid GPUs. and destroy others where it mattered
Hard disagree here x100. Investing in GPUs in the time when Nvidia and AMD started to gouge the market is actually the best decision Intel did in recent times. It's the piece of semiconductor with some of the highest margins in the business and they already own a lot of the patents and IP building blocks to make it happen.
The only stupid thing they did was not getting into GPUs earlier so they would already be on the market during the pandemic GPU shortage and AI boom.
EDIT: I personally always liked intel iGPUs because they were always zero bullshit on Linux minus some screen tearing issues and mumbo-jumbo fixes required in X11.
"Gelsinger said the market will have less demand for dedicated graphics cards in the future."
(from: https://www.techspot.com/news/105407-intel-not-repeat-lunar-...)
Gelsinger apparently agreed with you. However, the market very clearly has enormous demand for discreet GPUs. Specifically for AI workloads (not PC gaming).
If I was on Intel's board I would've fired him for this statement. The demand for GPUs (parallel matrix processors with super fast local memory) is NOT going to go down. Certainly not in the next five to ten years!
I know Intel makes a lot of things, has a lot of IP, and is involved in many different markets but the fact that they're NOT a major player in the GPU/AI space is their biggest failure (in recent times). It's one of those things that should've been painfully obvious at some point in 2022 and here we have Gelsinger saying just a few months ago that somehow demand for AI stuff is just going to disappear (somehow).
It's magic hand waving like this that got him fired.
Their dGPU is also pretty promising, I have it on my list to get - even if not for gaming, its possibly the best media encoding / decoding card for the money to get today. The only thing holding it back for entry level or mid level gaming is the drivers - for some games, it wont matter it seems, but for others it has some growing pains but they seem to be diligently working on them with every driver release.
Intel has made vast improvements even within their first generation of dedicated desktop cards. They will likely never compete with cards like a 4080/4090, but they may be great options for people on a budget. Helps put pressure on AMD to be better as well.
No they aren't - much like Boeing, at this point they are considered a national security asset.
My back of envelope calculation says Intel should be about $35 a share (150/4). If they stumble when they report Q4, I think the US Gov will twist some arms to make sure that fresh ideas make it onto the board of directors, and perhaps even make Qualcomm buy them.
I do think that Intel need to ditch some of their experiments like Mobileye. Its great (essential) to try and "rebalance their portfolio" away from server/pc chips by trying new businesses, but Mobileye hasnt grown very much.
1. https://www.tomshardware.com/tech-industry/semiconductors/ts...
Gelsinger was -- emphatically -- the wrong person for the job: someone who had been at Intel during its glory days and who obviously believed in his heart that he -- and he alone! -- could return the company to its past. That people fed into this messianic complex by viewing him as "the return of the engineer" was further problematic. To be clear: when Gelsinger arrived in 2021, the company was in deep crisis. It needed a leader who could restore it to technical leadership, but could do so by making some tough changes (namely, the immediate elimination of the dividend and a very significant reduction in head count). In contrast, what Gelsinger did was the worst of all paths: allowed for a dividend to be paid out for far (FAR!) too long and never got into into really cutting the middle management undergrowth. Worst of all, things that WERE innovative at Intel (e.g., Tofino) were sloppily killed, destroying the trust that Intel desperately needs if it is to survive.
No one should count Intel out (AMD's resurrection shows what's possible here!), but Intel under Gelsinger was an unmitigated disaster -- and a predictable one.
I'm not sure where Intel needs to go from here - ultimately lots of problems are solved if they can just design a solid CPU (or GPU) and make enough of them to meet demand. Their problems recently are just down to them being incapable of doing so. If their fab node pans out that's another critical factor.
Intel still has tons of potential. They're by no means uncompetitive with AMD, really. The fabs are a millstone right now, the entire reason they as cheap as they are until they can start printing money with them. It does feel like they don't have any magic, though, no big moonshots or cool projects left since they basically killed all of them :(.
Is it a "he retired" or a "we retired him"?
Brian’s affair with an underling was also surprisingly conveniently timed back then.
I find this view limited. If we look at the most successful tech CEOs, they all personally drove the direction of products. Steve Jobs is an obvious example. Elon pushes the products of his companies so much that he even became a fellow of the National Academy of Engineering. Jeff Bezos was widely credited as the uber product manager in Amazon. Andrew Grove pushed Intel to sell their memory business and go all in on CPUs. Walton Jr. was famous for pushing IBM to go all in on electronic computers and later the mainframes. The list can go on and on. In contrary, we can see how mere cheerleading can lead to the demise of companies. Jeff Immelt as described in the book Lights Out can be such an example.
https://www.pcgamer.com/intel-ceo-says-amd-is-in-the-rearvie...
It can be. You've just noticed the fact that for publicly traded companies where the value of the stock exceeds the total value of the assets you actually get to put that difference on your books into categories like "Good will" or "Consumer confidence."
For companies struggling to create genuine year over year value this is a currently validated mechanism for faking it. The majority of companies do not need to do this. That companies operating in monopolized sectors often have to do it is what really should be scrutinized.
1. Looking at the CyberMonday and BlackFriday deals, I see that the 12900K and 14900* series CPUs are what is being offered on the Intel side. Meanwhile AMD has released newer chips. So Intel has issues with either yield, pricing or other barriers to adoption of their latest.
2. The ARC GPUs are way behind; it seems obvious to me that a way to increase usage and sales is to simply add more VRAM to the GPUs - Nvidia limits the 4090 to 24GB; so if Intel shipped a GPU with 48 or 64GB VRAM, more people would buy those just to have the extra VRAM. It would spur more development, more usage, more testing and ultimately result in ARC being a better choice for LLMs, image processing, etc.
Your comment confuses me. BOTH have released newer chips. Intel with the Core Ultra 200 series and AMD with Ryzen 9000. Neither are going to be on Black Friday sales.
> So Intel has issues with either yield, pricing or other barriers to adoption of their latest.
How does not putting their latest chips on sale indicate trouble selling them?
They are just not very good? There is basically no point in buying the current gen equivalent 14900K with current pricing (the only real advantage is lower power usage).
Nvidia is so far ahead that a single manufacturer won’t be able to compete for developers. Instead, the only chance the rest of the AI GPU market has is to build some portable open source thing and use it to gang up on Nvidia.
That means bigger GPU players (AMD, hyperscalers) will need to be involved.
Pat didn't do that, I guess.
Divesting from their discrete GPUs just as they were starting to become a viable value option was one of their most recent asinine decisions. No idea why they didn't try test the market with a high RAM 64GB+ card before bowing out to see how well they'd do. Nvidia's too busy printing money to add more RAM to their consumer GPUs, they'd have the cheap GPU VRAM market all to themselves.
"shareholder friendly" and "good for the company" are not at all the same things.
Intel invested tens of billions into A20 and A18 nodes, but it has not paid off yet. News about yield seemed promising. Massive investments have been made. If somebody buys Intel foundries now, they pay one dollar and take debt + subsidies. Intel can write off the debt but don't get potential rewards.
Foundry is the most interesting part of Intel. It's where everything is happening despite all the risk.
You are describing the start of the Vulture capitalist playbook for short term profits and dividents right there, take subsidies and loans and sell everything to pay dividents (or rent back to yourself via a shell company) then let the remaining stuff die and sell of for an aditional small profit. Don't know how it works here but it sure sounds like it.
> Don't know how it works here but it sure sounds like it.
Thank you for being honest and saying that you are describing how things you don't understand sound for you.
Pat so suddenly getting "retired" like this isn't based on the success or failure of the new foundry nodes. You're correct that they weren't supposed to ship yet anyway. With this news most are expecting they'll be (further) delayed soon, but the real cause of today's action is strategic.
Things at Intel are so far gone that there's now no choice but to look at splitting up the company and/or selling/merging key parts off. Pat didn't want to preside over breaking up Intel, he wanted to save the company by shipping the new nodes. This was always a long shot plan which would require the existing businesses to do well and new things like GPUs to contribute while massively cutting costs in other areas.
Those things didn't work out. The GPUs were late and under performed forcing them to be sold near break even. The market for desktop and laptop CPUs was much softer than expected for macro economic reasons and, worse, there were massive, delayed death field failures of the last two gens of desktop CPUs. Competitors like AMD generally took more share from Intel faster than expected in other markets like data center. The big layoffs announced last Summer should have been done in 2021. Those things combined caused time and money to run out sooner than the new nodes could show up to save the day. This is reality finally being acknowledged. Frankly, this should have happened last Summer or even earlier. Now the value has eroded further making it even harder to save what's left.
But Tavares has been doing a terrible job for the past year: New Jeep inventories stacking up on dealer lots for over a year, mass layoffs, plant closings, unreliable cars, and no meaningful price reductions or other measures to correct the situation. You couldn't pay me to take a new Jeep or Ram truck right now.
Does Apple use Intel foundry? No.
The two largest fabless companies in the world never used, and have no plans to use Intel foundries.
"Intel foundry" as a service is a fiction, and will remain so. Intel can't get others to use their weird custom software tooling.
Such plans would be something like 4-5 years ahead, so you wouldn't have heard of it yet unless they decided to talk about it. Chip development takes a long time.
Of course, that means you have to expect the foundry to still be there in 5 years.
[1]: https://wccftech.com/intel-adds-14a-process-node-to-its-road...
Hi! CEOing has always been a hobby of mine, but with the recent news, I thought this would be a great opportunity for us to synergize.
Sure, I don’t have much experience in the chip making world but I did buy a Pentium when I built my own computer. I also have never run a multinational company but I visited several other countries on a Disney cruise.
Let me lay it out- you would get a dynamic new CEO at a fraction of the going market rate, and I’d get to take my Chief Executiving skills to the next level.
Let’s do this together!
You can reply here and let me know if you’re interested.
Intel wasn't doing great to start, but Pat put it on the path, potentially, towards greatness. Now even that is in major jeopardy.
MJ has a pretty good reputation inside the company.
>"Notable absent from that list is he fired Pat Gelsinger. Please just bring him back as CEO." - 2012 on HN, when Paul Otellini Retired.
>"The only one who may have a slim chance to completely transform Intel is Pat Gelsinger, if Andy Grove saved Intel last time, it will be his apprentice to save Intel again. Unfortunately given what Intel has done to Pat during his last tenure, I am not sure if he is willing to pick up the job, especially the board's Chairman is Bryant, not sure how well they go together. But we know Pat still loves Intel, and I know a lot of us miss Pat." [2] - June, 2018
I am sad to read this. As I wrote [2] only a few hours ago about how the $8B from Chip ACT is barely anything if US / Intel wants to compete with TSMC.
Unfortunately there were lot of things that didn't go to plan. Or from my reading of it was out of his control. Cutting Dividends was a No No from Board until late. Big Cut of headcount wasn't allowed until too late. Basically he was tasked to turn the ship around rapidly, not allow to rock the ship too much all while it has leaky water at the bottom. And I will again, like I have already wrote in [1], point the finger at the board.
My reading of this is that it is a little too late to save Intel, both as foundry and chip making. Having Pat "retired" would likely mean the board is now planning to sell Intel off since Pat would likely be the biggest opponents to this idea.
At less than $100B I am sure there are plenty of interested buyers for various part of Intel. Broadcomm could be one. Qualcomm or may be even AMD. I am just not sure who will take the Foundry or if the Foundry will be a separate entity.
I dont want Pat and Intel to end like this. But the world is unforgiving and cruel. I have been watching TSMC grow and cheer leading them in 2010 before 99.99% of the internet even heard of its name and I know their game far too well. So I know competing against TSMC is a task that is borderline impossible in many aspect. But I would still wanted to see Pat bring Intel back to leading edge again. The once almightily Intel.....
Farewell and Goodbye Pat. Thank You for everything you have done.
Similar to Yahoo a number of years ago, there's some real business still there, they just need to remove the expectation of constant quarterly calls and expectations and make long term, consistent investments again.
Then 2013 rolled around and I built a desktop with an AMD processor, because it was dirt cheap. I remember people saying that they were excited and looking forward to the upcoming AMD architectures and roadmap. I couldn't understand how AMD could possibly have come from behind to beat Intel.
Realistically, you just need to come up with a good roadmap, get good people, get the resources, execute.
Roadmap is good, people - not so sure about this one, resources - seem a little low, execution - seems hampered by too many cooks. If Intel broke up into smaller companies and their new leading edge chip design group had 500 good people, I honestly think they would have a better shot. So I think we are seeing what makes the most sense, Intel must die and let the phoenixes rise from the ashes.
Fast forward to 2024/2025, and remember, anything is possible if AMD beat 2011 Intel.
When the news came out that 20A was canceled the spin was 18A was so advanced that they no longer needed an in-between node.
NOPE, what happened was that 18A was a failure, and they renamed 20A to 18A.
Perhaps this is a fall out from the election.
[Edit]: Though it might have to be that Intel literally has to come to the brink of bankruptcy in order for that comeback to happen.
Pat had the mandate from both the board and the market to do whatever he deemed necessary to bring Intel back to the forefront of semiconductor manufacturing and a leading edge node. Frankly, I don't think he used that mandate the way he should have. Hindsight is 20/20 and all, but he probably could have used that mandate to eliminate a lot of the middle management layer in the company and refocus on pure engineering. From the outside it seems like there's something rotten in that layer as the ship hasn't been particularly responsive to his steering, even with the knowledge of the roughly 4-5 year lead time that a company like Intel has to deal with. Having been there for so long though, a lot of his friends were probably in that layer and I can empathize with him being a bit over confident and believing he could turn it around while letting everyone keep their jobs.
The market reaction really does highlight how what's good for Intel long term as a business is not necessarily what the market views as good.
Folks in this thread are talking about a merger with AMD or splitting the foundry/design business. I doubt AMD wants this. They're relatively lean and efficient at this point and turning Intel around is a huge project that doesn't seem worth the effort when they're firing on all cylinders. Splitting the business is probably great for M&A bankers, but it's hard to see how that would actually help the US keep a leading semi-conductor manufacturer on shore. That business would likely end up just going the same way as GlobalFoundries and we all know that didn't really work out.
The most bizarre thing to me is that they've appointed co-CEO's that are both basically CFO's. That doesn't smell of success to me.
I think one of the more interesting directions Intel could go is if Nvidia leveraged their currently enormous stock value and moved in for an acquisition of the manufacturing division. (Quick glance shows a market cap of 3.4 trillion. I knew it was high, but still, wow.) Nvidia has the stock price and cash to support the purchase and rather uniquely, has the motive with the GPU shortage to have their own manufacturing arm. Plus, they've already been rumored to be making plays in the general compute space, but in ARM and RISC-V, not x86. Personally, Jensen is one of the few CEO's that I can imagine having the right tempo and tenor for taming that beast.
I'm curious what others think of the Nvidia acquisition idea.
It makes sense once you understand the board has finally accepted the obvious reality that the only option remaining is to sell/spin-off/merge large parts of the business. Of course, the foundry business must remain in one piece and go to an American company or the US govt won't approve it.
Gelsinger 'got resigned' so suddenly because he wouldn't agree to preside over the process of splitting up the company. These co-CEOs are just caretakers to manage the M&A process, so they don't need to be dynamic turnaround leaders or even Wall Street investable.
Intel stock went up on the news not because the street expects a turnaround but because they think the pieces may be worth more separately.
The promise of state backing for a US champion SC fab was taken seriously by Gelsinger, who went all-in in trying to remake Intel as TSMC 2.0. But the money turned out to be way too late and far more conditional than Gelsinger thought. This is bad news for Intel, bad news for US industrial policy
> Gil was a nice guy, but he had a saying. He said, 'Apple is like a ship with a hole in the bottom, leaking water, and my job is to get the ship pointed in the right direction.'
> Didn't TSMC also struggle to hire enough skilled workers in Arizona?
That was mostly marketing so they could ask for more tax credits. In practice it seems to be going okay.
It's unfortunate the situation is beyond almost anyone's grasp but I wonder if Pat should have talked less, and done more.
When he took over, I remember the enthusiasm and optimism, not only in business, but in hacker circles also. It's a pity it didn't work out. I wonder if it is even possible to save Intel (not trying to imply that "if Gelsinger can't do it, than no one can", just wondering if Intel is just doomed, regardless of what their management does).
He came, he did all these things, he left (likely with golden parachutes): https://kevinkruse.com/the-ceo-and-the-three-envelopes/
Maybe it isn’t wise that the USA dump billions into private companies that can’t even get their own house in order.
I wouldn’t be surprised if the next CEO installed by the board will be hellbent on prepping INTC for sale. A few of the board of directors of INTC are from private investment firms.
"At least he'll have company as he joins 15K colleagues headed for the door"
Heyoo!
AMD is gaining ground on x86 without the burden of fab, and Apple has demonstrated that desktop ARM is viable. Nvidia is showing the world that GPUs can handle parallel computing better.
Something I was thinking about the other day: All the mega successful chip companies at the moment: TSMC, Nvidia, Samsung - are all lead by founders or family of founders. It got me wondering that if you really want to innovate in the most innovative industry in the world, you need more skin in the game than stock options. Gelsinger was the closest thing Intel had to a founder-leader, someone who deeply cared about the company and its legacy beyond what they paid him, and was willing to make tough decisions rather than maintain the status quo until his options vest.
I wonder if this is the nail in the coffin.
At this stage in Intel's life I think having a financier overseeing the company might actually be a good move. Engineering leadership is of course critical across the business, but they company has historically paid large dividends and is now moving into a stage where it's removing those pay outs, taking on debt and managing large long-term investments across multiple parts of the business.
Someone needs to be able to manage those investments and communicate that to Wall Street/Investors in a way that makes sense and doesn't cause any surprises.
Pat's error isn't that Intel revenues are slowing or that things are struggling, it's the fact he continued to pay dividends and pretend it wasn't a huge issue... until it was.
I have to agree with a few others, don't really see why people looked up to him. Seems like a pretty mediocre CEO overall.
I also, personally, do not actually see the problem with a financial CEO. Ultimately I don't believe technical acumen is that important to the decisions a CEO makes - they should be relying on subordinates to correctly inform them of the direction and prospects of the company and act accordingly.
I am concerned about Intel's long term prospects - obviously he wouldn't be leaving if everything was looking up, IMO.
He was sacked. The board fired him. Tell it like it is.
What does this mean for Intel? I think they’re too important to get bought or broken up because they have fabs in the US. They’re like Boeing in that sense. Or a big bank. They’re too big (strategically important) for the US to let them fail. But maybe they’ll get bought by another US company or investor. I dunno.
The guy thumped religious stuff on his twitter, didn't acknowledge competition, didn't reform company culture and was left in the dust.
Intel is better off without him.
