News Intel 1Q24 Earnings Report

[Joe NYC]

This is for Gaudi 3 but yeah not really inspiring numbers during the gold rush.

I think that number was for all AI accelerator sales. And no estimate was provided for H1 revenue, which would have been nearly all Gaudi 2.

Which seems to indicate that Gaudi 2 got almost no traction at all in its life time.

Another thing that Pat mentioned - he distinguished between Gaudi and Falcon Shores that Falcon Shores will be fully programmable, addressing Intel's "deficit" in that area...

 

[adroc_thurston]

I think that number was for all AI accelerator sales.

Pretty specifically Gaudi 3. but yea.

he distinguished between Gaudi and Falcon Shores that Falcon Shores will be fully programmable, addressing Intel's "deficit" in that area...

Well yeah FCS is a GPU. An actual SIMD machine.
But it's also late-late'25 aka basically 26.
bwah.

 

[Saylick]

Pat said that the bottleneck for Meteor Lake production is "wafer assembly". It came a bit out of the left field.

I have speculated that the overcomplicated Meteor Lake design and partition will be an albatross around its neck (from cost POV) and now it is manifesting itself in other ways (beyond cost).

It does seem like for the last few years Intel has been hamstrung by poor decisions from former management, decisions in my opinion that were an overreaction from what the competition was doing or where the industry was heading. For example, this whole issue about MTL being volume limited by wafer assembly strikes me as being the same mistake as Ponte Vecchio: in a time where Intel was getting screwed because they were still making monolithic products while AMD was going chiplets, Intel decides to prove the naysayers wrong by going all in on chiplets and advanced packaging. They were going to out-do what AMD was doing by doing it bigger. But where did they end up? With a horribly late, non-competitive product like Ponte Vecchio. The same feels true about Sapphire Rapids, where they went too far to the right on the monolithic-chiplet spectrum and they pulled it back with Emerald Rapids. Similarly, look at how Lunar Lake actually simplifies the number of chips in comparison to Meteor Lake. On the foundry side, Intel is trying to beat TSMC by going all in on High NA EUV because of their earlier mistake of not committing to EUV. Again, trying to correct for their earlier mistake by overreacting and swinging the other way without much thought on if it really makes sense (consider that TSMC have said they don't need High NA EUV even for their newly announced N16 node).

Now that they are behind the 8-ball on the AI gold rush, Intel is going all in on NPUs and AI GPUs. Given their bad luck, I would not even be surprised if by the time they catch up the AI boom would be over.

 

[Joe NYC]

View attachment 97865
Pretty specifically Gaudi 3. but yea.

In the actual conference call, that number was used quite loosely, to include all of the accelerated revenue, which leaves next to nothing for Gaudi 2.

From prepared remarks, Pat just calls it "accelerated revenue"

Well yeah FCS is a GPU. An actual SIMD machine.
But it's also late-late'25 aka basically 26.
bwah.

I think this is the primary reason Intel tanked after the earnings. Intel is going to be such a distant 3rd that its out of the race.

If Intel are #3, while #2 is 10x and #1 is 100x in revenue, it is not really being in the race. And then, Intel restarts the race again in 2025/2026 with new product...

And interestingly, both NVDA and AMD were both up after hours, on news there isn't a 3rd competitor.

 

[Joe NYC]

It does seem like for the last few years Intel has been hamstrung by poor decisions from former management, decisions in my opinion that were an overreaction from what the competition was doing or where the industry was heading. For example, this whole issue about MTL being volume limited by wafer assembly strikes me as being the same mistake as Ponte Vecchio: in a time where Intel was getting screwed because they were still making monolithic products while AMD was going chiplets, Intel decides to prove the naysayers wrong by going all in on chiplets and advanced packaging. They were going to out-do what AMD was doing by doing it bigger. But where did they end up? With a horribly late, non-competitive product like Ponte Vecchio. The same feels true about Sapphire Rapids, where they went too far to the right on the monolithic-chiplet spectrum and they pulled it back with Emerald Rapids. Similarly, look at how Lunar Lake actually simplifies the number of chips in comparison to Meteor Lake. On the foundry side, Intel is trying to beat TSMC by going all in on High NA EUV because of their earlier mistake of not committing to EUV. Again, trying to correct for their earlier mistake by overreacting and swinging the other way without much thought on if it really makes sense (consider that TSMC have said they don't need High NA EUV even for their newly announced N16 node).

Now that they are behind the 8-ball on the AI gold rush, Intel is going all in on NPUs and AI GPUs. Given their bad luck, I would not even be surprised if by the time they catch up the AI boom would be over.

Excellent points.

Intel may not yet be done paying for the mistakes of the previous management. Starting so late with EUV, Intel's installed base is low, not enough capacity to transition to "Intel 4" and "Intel 3", which means overreliance on "Intel 7", which is increasingly obsolete, and TSMC, which is not cheap.

So what was once key competitive advantage for Intel, being "Integrated Device Manufacturer", Intel now has zero competitive advantage from that, and instead, it has costs of maintaining obsolete capacity, while paying top dollar for competitive capacity.

 

[Mahboi]

Every night in my stocks
I see you, I feel you
That is how I know you die out

Far across the transistors
And runaways between them
You have raised to short, to inflame

Deep, far, wherever you are
I believe that the sinking goes on
Once more, you increment a number
And the watts in that die
And my CPU will burn on and on

Monopoly can touch us one time
But not last for a lifetime
And let go 'til we're gone

Love was when I bought you
One old time I'd hold to
In my life, we've already moved on

Three, five, wherever you are
I believe that the hectowatts go on
Once more, you up the core count
And in here in my server
The bum cores pile on and on

You're here, it's fire I fear
And my fire station has the address to go on

We'll stay forever this way
You are safe powered down
And my heart will go on and on to Lisa

Spoiler

Easily one of my worst spoofs but the original lyrics really aren't helping.

 

[Mahboi]

It does seem like for the last few years Intel has been hamstrung by poor decisions from former management, decisions in my opinion that were an overreaction from what the competition was doing or where the industry was heading. For example, this whole issue about MTL being volume limited by wafer assembly strikes me as being the same mistake as Ponte Vecchio: in a time where Intel was getting screwed because they were still making monolithic products while AMD was going chiplets, Intel decides to prove the naysayers wrong by going all in on chiplets and advanced packaging. They were going to out-do what AMD was doing by doing it bigger. But where did they end up? With a horribly late, non-competitive product like Ponte Vecchio. The same feels true about Sapphire Rapids, where they went too far to the right on the monolithic-chiplet spectrum and they pulled it back with Emerald Rapids. Similarly, look at how Lunar Lake actually simplifies the number of chips in comparison to Meteor Lake. On the foundry side, Intel is trying to beat TSMC by going all in on High NA EUV because of their earlier mistake of not committing to EUV. Again, trying to correct for their earlier mistake by overreacting and swinging the other way without much thought on if it really makes sense (consider that TSMC have said they don't need High NA EUV even for their newly announced N16 node).

Now that they are behind the 8-ball on the AI gold rush, Intel is going all in on NPUs and AI GPUs. Given their bad luck, I would not even be surprised if by the time they catch up the AI boom would be over.

I have little to add except that my true cause of worry wrt Intel is that nothing seems to panic over there.
Everyone seems to sail on like they're still on top of the game. Like everything will be fine eventually, because God wants it or something. This is an extremely grave mistake especially when your industry has 5 year long cycles.

I've said before (not here) than Zen 2 should've been heard as the cannon's thunder over at Intel. The sign that things were going to get rough.
I still don't have the impression that they got the message. If they only fully get it now with Zen 5, bye bye Intel.

 

[coercitiv]

It does seem like for the last few years Intel has been hamstrung by poor decisions from former management, decisions in my opinion that were an overreaction from what the competition was doing or where the industry was heading.

I believe the term that explains their line of thinking is leapfrogging. I've talked before about their collective thinking on winning through sheer technology superiority, and leapfrogging is the concept that springs to mind when you realize the competition has pulled ahead. They cannot just emulate what the competition does, it must be bigger, better, faster all at once. This often fails, especially when the collective is overestimating their current capabilities.

 

[Mahboi]

I believe the term that explains their line of thinking is leapfrogging.

That word works if you actually leapfrog.
The word that works here is stumbling on your own legs.

I've talked before about their collective thinking on winning through sheer technology superiority, and leapfrogging is the concept that springs to mind when you realize the competition has pulled ahead.

Have they realised it? Cause to me it sems like they're mostly busy trying to act like nothing has changed since 2016 and they just need to pour more money until they win.

They cannot just emulate what the competition does, it must be bigger, better, faster all at once. This often fails, especially when the collective is overestimating their current capabilities.

Actually you can emulate just fine until you've cleared out your main problems. Doing it all at once just piles the problems on. Which is what we're seeing here.

I think I'll never overcome the moment I was explained what Ponte Vecchio was.
The definition of overdoing it on your first go, only to completely destroy your own product.

 

[jpiniero]

Intel posted the 10-Q... Notebook volume was up 39% YoY and Desktop 29%. ASPs were flat... which is kind of interesting given Meteor Lake should be more expensive.

Server OTOH had a 13% drop in volume but 25% higher ASPs.

 

[Hitman928]

I haven't read through the call transcript yet but stock is down ~11% at open. Seems the leadership wasn't able to calm people's response.

Intel posted the 10-Q... Notebook volume was up 39% YoY and Desktop 29%. ASPs were flat... which is kind of interesting given Meteor Lake should be more expensive.

Server OTOH had a 13% drop in volume but 25% higher ASPs.

MTL was always going to be low volume so this isn't surprising. The server volume drop was expected given the current environment but that much increase in ASP is a nice surprise.

 

[jpiniero]

MTL was always going to be low volume so this isn't surprising. The server volume drop was expected given the current environment but that much increase in ASP is a nice surprise.

I think it's the 'ol "Offer Plat for slightly more than Gold"... which Corpos are still biting on. Even SPR being such a chonker isn't a big deal when they have plenty of spare 10 nm capacity.

 

[adroc_thurston]

Seems the leadership wasn't able to calm people's response.

no AIbuxx.
Expected really.

which is kind of interesting given Meteor Lake should be more expensive.

Volume is still pretty much Raptor.

 

[jpiniero]

Volume is still pretty much Raptor.

Which is to be expected. Hell, it's going to be that way in 2025 too.

 

[adroc_thurston]

Which is to be expected. Hell, it's going to be that way in 2025 too.

Yeah, pricier products are PITA to ramp.

 

[Joe NYC]

Yeah, pricier products are PITA to ramp.

I think there are a couple of problems with the "cheap" RPL dies:

On a normal day, the costs are not fully accounted for. Intel just pretends that some other department is making a loss selling them.

In this particular quarter, it appears that some quantity of the RPL dies were pulled from inventory, where it was valued at very low value, so that the company as a whole (Products + Foundry) did not have to account for the full cost of these chips this quarter, which lead to higher than expected EPS. But it seems that the inventory is empty, and full production costs will be part of next Q earnings, which resulted in forecasted decline from 18 cents EPS this Q to 10 cents next Q.

 

[jpiniero]

On a normal day, the costs are not fully accounted for. Intel just pretends that some other department is making a loss selling them.

They are not. After all, the Foundry got 4.4 billion in "Revenue". You're just seeing what it costs to fund new nodes.

 

[gdansk]

They are not. After all, the Foundry got 4.4 billion in "Revenue". You're just seeing what it costs to fund new nodes.

Process development should be financed by the margin of the foundry, no? That such a margin doesn't exist to fund future development suggests something bad but I am not sure.

 

[jpiniero]

Process development should be financed by the margin of the foundry, no? That such a margin doesn't exist to fund future development suggests... something bad.

Yeah. Spinning off the fabs seems inevitable. Just gotta find a sucker.

 

[Mahboi]

Yeah. Spinning off the fabs seems inevitable. Just gotta find a sucker.

I doubt that there's a sucker with enough money and enough stupidity to pay for this.
One with the stupidity but not the money or one with the money but not stupid enough are already hard enough.

The UAE's sovereign fund is already one of the least dumb national investors out there, and all they could afford was GlobalFoundries, which isn't even going to attempt jumping into 7nm.
Someone with enough funds to buy IFS would require what, 10x the money GlobalFoundries was worth?

 

[jpiniero]

I doubt that there's a sucker with enough money and enough stupidity to pay for this.
One with the stupidity but not the money or one with the money but not stupid enough are already hard enough.

Uncle Sam

 

[Mahboi]

Uncle Sam

Mmmmmh.
I think not.

Explaining why would require an answer in the Politics section.

 

[maddie]

Mmmmmh.
I think not.

Explaining why would require an answer in the Politics section.

Then you haven't being paying attention. As is said, there are many ways to skin a cat.

 

[Mahboi]

Then you haven't being paying attention.

To what?

As is said

Who are you?

, there are many ways to skin a cat.

That's highly specific, thanks.

 

[NTMBK]

I doubt that there's a sucker with enough money and enough stupidity to pay for this.
One with the stupidity but not the money or one with the money but not stupid enough are already hard enough.

The UAE's sovereign fund is already one of the least dumb national investors out there, and all they could afford was GlobalFoundries, which isn't even going to attempt jumping into 7nm.
Someone with enough funds to buy IFS would require what, 10x the money GlobalFoundries was worth?

Would they need a buyer? Can't they just do some sort of share split, and leave Intel shareholders with a mix of shares in the two separate companies? (Proportional to the relative value of the two entities at the time of the split.)