Thread regarding Intel Corp. layoffs

TSMC and ARM versus Intel fabs and x86 and more

As a longtime technologist, many observations-

the battle lines between TSMC/ARM and Intel fab/x86 have been drawn for a long time. Once

ARM starts getting traction in servers, it is the beginning of the end..

So many parallels between Carly Fiorina at HP and BK and co. at Intel. Once the 'consultants'

( Bain and co. ) come in - it is also the beginning of the end..

Intel right now is a far cry from the days of Grove, Moore and Noyce. No Intel leader -- from the

rawest RCG to the senior mgmt has emerged in the last 15 years or so to truly make an impact on technology and lead Intel into profitable markets

The stock right now is being propped up through stock buybacks and debt. Intel has $30B (!!)

in debt, and less than $15B in the bank. Altera ( 8X revenue purchase at $16B for $2B annual revenue ?! ) and

McAfee ( $7.7B ?! ) were epic disasters for Intel . Lesser acquisitions ( Level 3 for $1B ?! ) were equally disastrous. Intel has not had -one- profitable acquisition in its last -70- acquisitions and nothing indicates any different now.

The server market is slowing. From 14% growth in 2014 to 10% last year to 8% or less this year ? DB is not a breakthrough leader as past postings attesting to her largely in-effectual career ( Intel CIO ?! - by no means a frontline role for any effective P&L leadership )

Gartner research posted a 80MM (!!) unit drop in PC shipments from 2014 to 2015 ( from ~ 330MM units to 250MM units !!). This is not rocket science, Intel has too many fabs, too many bodies to justify that lack of revenue.

Speaking of bodies, the days when Grove mandated an extra day (?) of work and pay freezes for 6 months. That spirit of 'we are all in it together' is as far as can be from today - where it is a mad frenzied land grab for BK and co. before the clock runs out..

On and on and on. Would welcome thoughtful (!!) insights - please keep the BS to a minimum - and yes, shorting Intel stock makes sense in light of the above

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For those still at Intel to consider this previous poster

"Thank you for this post. On my last day at InHell it confirms my misgivings about staying and I'm happy I took VSP. Look around Chandler and you see Fab42, a brand new substrates factory, all signs of firm DENIAL by the CEO. The virtuous cycle is based on areas where Intel has no good offering (IOT dollars are in the DATA, not hardware). To make matters worse, in TMG now 6 to 8 Vice Presidents now routinely review minutiae: experiments, failure analysis, recovery plans, task force updates. No one spends time on strategy because they are trying to run out the clock. Farewell Intel, and good luck to the Leftovers."

How can it be good that senior managers have time 7 days a week to review the minutia from daily task force results, where has trust gone, where has delegation, are the lower engineer, FLM, SLM and even GM not capable of doing it? Shouldn't the higher ups be pondering what to do with this sinking ship versus continued micro managing the little things.

Don't they see the ship is going the WRONG DIRECTION!! No amount of micro managing the little stuff will fix that!!!

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There is no strategy at Intel because VPs spend their time reviewing what already happened as well as making decisions for people 3 grade levels or more below them. With no trust as the norm in this suffocating management style, there will be no breakthrough innovation. I believe most recognize this company is in trouble, but it is not safe for them to admit or say this to their peers or bosses. They have sold their souls to protect and promote the golden goose. So they dance around the problem, review it some more, blame some people, deflect attention, whatever it takes. I am amazed at how much money this company has to cover up weak leadership and decisions, but as others have noted it is being pissed away as growth opportunities are replaced by contraction and debt. It reminds me of the Kodak case study in graduate school...hold on to the old shrinking technology market because you are scared to death of cannibalizing it with the new technology. But markets really don't care about your margins in the end.

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Thank you for this post. On my last day at InHell it confirms my misgivings about staying and I'm happy I took VSP. Look around Chandler and you see Fab42, a brand new substrates factory, all signs of firm DENIAL by the CEO. The virtuous cycle is based on areas where Intel has no good offering (IOT dollars are in the DATA, not hardware). To make matters worse, in TMG now 6 to 8 Vice Presidents now routinely review minutiae: experiments, failure analysis, recovery plans, task force updates. No one spends time on strategy because they are trying to run out the clock. Farewell Intel, and good luck to the Leftovers.

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"Our current processor chip leaders are inexperienced and lack relevant knowledge in CPU, GPU and fabric technology. Combine it with the disasterous advancement in process technology and you get a really bleak future.'

Amen brother

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Our current processor chip leaders are inexperienced and lack relevant knowledge in CPU, GPU and fabric technology. Combine it with the disasterous advancement in process technology and you get a really bleak future.

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TSMC is going to beat Intel to 10nm

You'll see Apple chips outperforming Intel Core CPUs as early as next year

Also look for Qualcomm and Mediatek to leverage Apple's TSMC investments and also use their 10nm fabs to product 10nm chips before Intel.

TSMC is also on track for 7nm.

Anyone still think Intel is in good shape?

No wonder Google, Facebook and others are hedging their server software stack to become ARM compatible. These guys make so much money that it would not surprise me in the least that they field their own CPU design teams to build custom ARM CPUs for their needs. Apple did it for their mobile computing needs, they'll do it for their server needs.

That giant meteor with ARM written on it is heading full speed towards the Intel dinosaurs.

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“How did you go bankrupt?"

Two ways. Gradually, then suddenly.”

― Ernest Hemingway

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Server growth is slowing because the public cloud datacenters are eating the private enterprise servers.

Every chip sold to Amazon (AWS) or Microsoft (Azure) cannibalizes even more back-office enterprise server chips. Why run a private exchange server and pay people to maintain it when you can just outsource all that sh~t to Microsoft and run it on Azure. The Azure chip can handle multiple customers at once, so once Azure chip can replace several private server chips.

That's one headwind.

The other headwind is that datacenters don't need as many Xeons when they build their own accelerator hardware. Check Google's TPU which is an ASIC that runs machine learning algorithms.

Another headwind is more obvious. The ARMies would also like a piece of the server market which discussed.

The other headwind is that many countries want to control their own technology stacks. Look for China, Japan, Russia etc. to build home-grown CPUs and completely cut out Intel. China has already done this with their massive supercomputer. CPU design is no longer rocket science. These foreigners learned from licensing ARM RTL and improving it.

ARM is the destroyer of worlds if you are an Intel employee.

If you're a regular Joe, ARM is a liberator as they ruthlessly destroy the x86 monopoly tax making computing cheaper for everyone.

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When you have professional managers and accountants being promoted as leaders, then you know the company's best times have passed. That's where Intel is right now.

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Technology moves forward thru disruption.

x86 was an amazing and landscaping changing disruptor and generated billions upon billions in profit and trillions in revenue creating new companies and usage we never could believe 20 years ago.

Sadly our current leaders aren't the sharpest so to expect them to identify and transform the company is whishful thinking. It would have taken at a minimum brilliance like Andy and Robert and still be hard pressed so it is about a million feet above BK's capability, LOL

It is interesting in days of old harder work and direction was the message. Today it is standard cookie cutter cut and burn management, that says enough about management. They really don't know what to do, so sad.

As to direction, company needs to decide what is their core competency and then use it to transform. I will tell you modems, consume IoT chips and memory are not things intel has done well in the past nor are structurally postioned to do well going forward.

My advice if you need more than a few years GET OUT! Or wither with the company, there is a real chance it could implode far faster than many think as ARM alternative is real, Moores law and 10nm may be very later to never show up at all as with all the products on it. Then it would implode.

Happy jon hunting or praying

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Don't call yourself a technologist. WTF is that? You're either an engineer or you aren't

Technologist is a made-up Intel-ism.

Very annoying.

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The most dangerous situation is when a company doesn't realize that there is an existential threat. IMHO, Intel management isn't even aware that the golden goose is under threat. They flail about wildy not knowing what to do and the golden goose generates enough cash to hide their mistakes --- for a while.

Everything that Intel does derives from the x86 client.

Intel derives massive economy of scale from this business.

  • The fat margins from this business enable investments in server and other new businesses. Intel makes so much money from x86 that they are able to make ridiculous investments (like 7.7B Mcafee and 16B Altera) and get away with it.

  • The fat margins enable investments in leading edge process technology to stay ahead of the competition

  • The fat margins enable Intel to maintain a competitive workforce

  • The fat margins enable Intel to build out mega-fabs at scale

OP, as you noted, the golden goose is contracting and has been for at least 5 years now. Peak PC was way back in 2012. It's been downhill ever since. I don't see it getting better ever as iOS and Android are the computing platforms of choice.

With less and less money from this business every year, Intel loses their scale advantage.

Volume shifts to TSMC and Samsung which now have their own virtuous scale cycles through the mobile phone market. The mobile phone market is now the driver of high value semiconductor volume. TSMC+Samsung+Apple+Qualcomm+ARM are the new leaders of computing. They have already surpassed (by a wide margin) Intel in the client (1.4B units per year in smartphones vs. 0.25B units in PCs). They will drive this virtuous cycle into servers in the same what that Intel attacked high-cost servers in the 90s. In the 90s, servers were bought from Sun and HP and Digital and others with high performance RISC chips like PA-RISC, SPARC and Alpha. Intel came in with cheap server processors that were initially lower performance. However, because of their scale advantage in client computing, they were able to leverage those investments and enter the server market - slowly but surely chipping away at the high end RISCs. They have the time and funds to do so from the client business. Now, in 2016, we see the same thing happening. The ARMies can use mobile dollars to attack servers with cheaper offerings. They will not let up until they totally dominate as their scale advantage increases and Intel's decreases. Intel will increasingly retreat to the high end and more and more niche markets as the cheaper and eventually better ARM solutions take all the volume.

It's only a matter of time before the golden goose is dead.

The only way out is to partner with the dominant ecosystem. Work like hell to join it - don't fight it. Just make ARM chips and contract the fab out to ARM vendors (like Samsung). You aren't going to convince the 10s of millions of software developers to abandon Android and iOS to come back to Windows. The economics just don't work. 1.4B vs. 0.25B users every single year - you can't fight those odds in an ecosystem war.

Unfortunately, management is in denial - or worse - just completely clueless about the situation.

It is grave.

It is fatal.

Intel is DEC, Blackberry etc...

Dead man walking.

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Gartner research posted a 80MM (!!) unit drop in PC shipments from 2014 to 2015 ( from ~ 330MM units to 250MM units !!). This is not rocket science, Intel has too many fabs, too many bodies to justify that lack of revenue.


This INTEL behavior is called with slogan: Ignorant and Arrogant behemoth. INTEL, instead licensing its own x86 technology (as INTEL stated on its early days), did in 1990s catastrophic mistake: decided to continue this journey alone (denying licensees after 80486 design), and to rule x86 CPU market with driving it, controlling and demanding. It made out of itself huge company, monolith, instead x86 diversification, and let others to make and take their own decisions. AMD is some half-way x86 success/failure, which was more of x86 guinea pig sort of company... Did not extend more!

ARM has one huge, deadly advantage: it is "cloud - node" oriented marketing architecture, with cloud of zillions companies around The World using ARM license. This advantage is now showing in all of its beauty and efficiency.

Different approach, different results: many small and mid size ARM animals cooperating and competing, against one x86 behemoth, while AMD dwarf pejoratively succeeds on its own (on GPUs).

You all judge the rest!

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Great comment btw in another post "One cannot encourage behavior through fear, one can only restrict behavior through fear" - as the wave of VSP/ISP/ERPs continues.

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