I don't really like the article. The individual analyses are fine, but the whole order is messy and gives blurry view of the whole picture. The "solutions" (likely as a result of the messy structure up to that point) are plain insane to put it bluntly.A good article about intel's problems:
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Intel Problems
Intel is in much more danger than its profits suggest; the problems are a long time in the making, and the solution is to split up the company.t.co
It has some irritating inaccuracies (AMD did challenge Intel in datacenters with Opteron, and Nvidia's data center GPUs are manufactured by TSMC not Samsung, etc) but overall it still explains the problems quite well
There appears to be at least one signal that Intel has decided to move toward more outsourcing. ASML Holdings (ASML), a Dutch maker of semiconductor manufacturing equipment used by Intel and Taiwan Semiconductor Manufacturing (TSM), reported early Wednesday that it sold a net of six high-end systems in the fourth quarter.
According to Bernstein analyst Mark Li, that “net” statement implies some cancellations. While there were no specifics on the call, Li concludes that Intel cancelled some orders, and that Taiwan Semi asked for more equipment, indicating that Intel will outsource more production to Taiwan Semi.
Rumor that Intel cancelled orders from ASML which go to TSMC instead, indicating push for outsourcing. Take with a pinch of salt, but a big deal if true.
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Intel Says It Will Top Sales Guidance. Here’s How Much the Beat Could Be.
Susquehanna Financial Group analyst Christopher Rolland calculated that Intel would generate $600 million to $700 million more in fourth-quarter sales than expected.www.barrons.com
It just doesn't seem reasonable that Intel is going to get any more than a token amount of TSMC's 5nm wafers in the next two years, unless they make a deal like an EUV scanner swap where they give TSMC some of their orders arriving sooner in exchange for TSMC orders arriving later. It isn't like Intel has any use of them right now...
But, if this is true (Intel being able to make such a swap), then 7nm is pretty much where 10nm was before release - AKA, moribund. They will slip from N-1, to N-2; which just isn't sustainable.It just doesn't seem reasonable that Intel is going to get any more than a token amount of TSMC's 5nm wafers in the next two years, unless they make a deal like an EUV scanner swap where they give TSMC some of their orders arriving sooner in exchange for TSMC orders arriving later. It isn't like Intel has any use of them right now...
Intel had already taken delivery of enough EUV scanners to operate one or more 7nm fabs. It would be going beyond that which would be a problem, but we're talking 2025 or later at the rate they're proceeding. They wouldn't be able to use the additional EUV scanners today, but TSMC can on Intel's behalf.But, if this is true (Intel being able to make such a swap), then 7nm is pretty much where 10nm was before release - AKA, moribund. They will slip from N-1, to N-2; which just isn't sustainable.
Intel spending their own money to throw in with TSMC (whether temporarily or permanently) and getting an advantage is no different than the previous situation a few years ago of Intel spending their own money to maintain a process lead on the rest of the market.The problem for the rest of the industry with this is that an Intel, with it's very deep pockets, combined with an Apple, with their much deeper pockets, can easily outbid everyone for wafers on leading edge nodes and effectively keep all comers at a technical disadvantage with respect to profitability or performance. If I was AMD, I would be shopping at least some parts to Samsung and encouraging GF to continue to at least improve 12lp+ to keep some other players available in the field.
Difference is now Intel is helping TSMC increase its CapEx while itself not profiting of it aside the bought capacity, whereas with its process lead it got the cash cow that is 14nm. Hard to get the latter again with the former approach.Intel spending their own money to throw in with TSMC (whether temporarily or permanently) and getting an advantage is no different than the previous situation a few years ago of Intel spending their own money to maintain a process lead on the rest of the market.
I see this often on message boards. But it is not correct. Intel (or Apple) does not pay for wafers out of their cash pile (retained earnings are part of shareholders' equity on the balance sheet). Wafer cost is part of cost of sales, which has to be covered by revenues. Revenue minus cost of sales is gross profit, and the ratio is called gross margin. Investors are crazy about gross margin. Companies with growing gross margin are rewarded with elevated stock prices, and vice versa, companies with declining gross margin are punished.The problem for the rest of the industry with this is that an Intel, with it's very deep pockets, combined with an Apple, with their much deeper pockets, can easily outbid everyone for wafers
You forgot the part about competitiveness in the chipmaking landscape. What Intel lacks at the moment is also what is giving its competitors, mainly Apple and AMD, so until they can bring their own silicon to TSMC's level, the best thing they can do is to eliminate the disadvantage by producing chips at the same source as their chief competitors. This is especially worth undertaking if Intel finds a way to still use everything they can produce from their own fabs, which this resurgent PC market seems to demand. As it stands right now, it seems Intel is even struggling for capacity at its own fabs so yeah, I don't see this move as anything but a necessary step until Intel can solve its problems.Difference is now Intel is helping TSMC increase its CapEx while itself not profiting of it aside the bought capacity, whereas with its process lead it got the cash cow that is 14nm. Hard to get the latter again with the former approach.
Oh I completely agree, but Intel is screwed either way. If they try to plow forward on their own and can't catch up, or worse fall further behind, then AMD will skim the cream off the top of the market by owning nearly 100% of the highest margin CPU market and leave the low margin stuff for Intel - exactly what Intel did to AMD for so many years.Difference is now Intel is helping TSMC increase its CapEx while itself not profiting of it aside the bought capacity, whereas with its process lead it got the cash cow that is 14nm. Hard to get the latter again with the former approach.
2023->2024->2025 for HVM, looking like anything we've seen before; that has a '10' in it. I have no idea how Gelsinger fixes this. Intel has gone from 2 years ahead to something like 4 years behind so fast it's hard to comprehend (well, for me at least).Intel had already taken delivery of enough EUV scanners to operate one or more 7nm fabs. It would be going beyond that which would be a problem, but we're talking 2025 or later at the rate they're proceeding. They wouldn't be able to use the additional EUV scanners today, but TSMC can on Intel's behalf.
I think it took something like six years?2023->2024->2025 for HVM, looking like anything we've seen before; that has a '10' in it. I have no idea how Gelsinger fixes this. Intel has gone from 2 years ahead to something like 4 years behind so fast it's hard to comprehend (well, for me at least).
Yes, this is what Intel has to get through. Honestly the biggest issue I see with Intel now is that it allowed the process node troubles stagnate the development on silicon designs as well. If it unlinked them much earlier Intel might have had a design advantage even when outsourcing, even on TSMC. Now it has to fight on both fronts at once, nodes and designs.Oh I completely agree, but Intel is screwed either way. If they try to plow forward on their own and can't catch up, or worse fall further behind, then AMD will skim the cream off the top of the market by owning nearly 100% of the highest margin CPU market and leave the low margin stuff for Intel - exactly what Intel did to AMD for so many years.
I'm sure their hope/plan is that relying on TSMC a temporary stepping stone for a few years while they get their manufacturing back on track. Though absent a TSMC stumble beyond N3 I'm not sure how they catch back up even if they do since they're talking about shipping 7nm stuff in late 2022 - when TSMC will be shipping N3 and maintaining a lead of a full process generation. Maybe they have some sort of dream about making a big jump between 7nm and 5nm, or even skipping 5nm altogether, but trying to do too much at once was part of the problem with their 10nm failure.
Geez, what were you in at?*Looks at my Intel shares nervously*
If Intel had a proper chiplet strategy they could make it work provided they could stay at least on the trailing edge. The one thing AMD doesn't have is anything better than GloFo 12 that's cheap. Put stuff that doesn't need to be on the bleeding edge but could be useful to be on trailing.2023->2024->2025 for HVM, looking like anything we've seen before; that has a '10' in it. I have no idea how Gelsinger fixes this. Intel has gone from 2 years ahead to something like 4 years behind so fast it's hard to comprehend (well, for me at least).
46, then I sold, and then after dumping most of that in MSFT, jumped back into Intel at 52, since I think Intel will come back in a year or two and get into $60 territory again.Geez, what were you in at?
Good luck!46, then I sold, and then after dumping most of that in MSFT, jumped back into Intel at 52, since I think Intel will come back in a year or two and get into $60 territory again.