Thanks for a well argued, on-topic reply. Yours deserve a point-by-point reply.
Basically, Intel will go fabless because the huge burden of maintaining a lead in process tech is becoming a liability. That's the gist of my argument, which you probably will find better articulated by articles, blog posts and forum discussions on this topic floating around on the Internet.
Their process, and being able to work on it with the chips, is a large part of them being a behemoth, though, and there is no long-term advantage to getting rid of that. It's a liability as far as the costs of maintaining a manufacturing lead are eating into income, which is based in majority on CPU design. In addition, there's a very simple Intelish catch to going fabless: 5-10% gross profit that
someone else is making off of them.
What about the IBM-GlobalFoundries deal? Is that a bad deal?
On IBM's side, IBM was winding down production, anyway, and by also reducing their R&D, they don't need to build much. They are a husk of the company they once were, much like HP.
The specific terms of the WSA between AMD and GlobalFoundries may initially have been somewhat balanced against AMD. However, I think Lisa Su has fixed that in the latest renegotiation.
Repaired it, maybe. Like they were before, AMD could have been a large-scale fab-owning partner in GloFo, instead of kinda sorta having a fab or two, to gradually get rid of. Basically, just doing like they did before GloFo, with the compatible process deal they had for IBM & friends. They'd be stuck with debt, as things are still working themselves out for GloFo, but it's not like going for cash flow to keep afloat is a new way for AMD to operate. But, once they got decent chips made, and could operate their fabs at higher utilization, they'd be left with just that much more revenue, while having the possibility of doing 3rd party fabbing to help buffer the costs during downtimes, yet also having the rest of GloFo to call upon when demand really spiked. AMD went fabless due to bad management, more than anything else. They could have kept their fabs, and also benefited from being part of a consortium, with a better CEO and board.
Samsung is itself considering divesting its fabs. The problem is that not being a pure-play foundry works against them in competition with TSMC's pure-play business model. Customers of TSMC never have to worry about partnering with a competitor (ref. Apple vs Samsung).
This much is true. However, Intel has the opportunity to gradually get there, and work out boundaries along the way. They know what lies ahead, but don't have to do any emergency measures, just yet. They could also just as well fab for competitors or competitors' partners, if it comes down to it. If they make the decision, as the cost vs. revenue problem starts making shareholders think twice, to stick primarily to being a fabricator, and a processor design company second, they can do both. They would make a small amount of money on those chips, and a lot more money on their own.
I guess this is also the reason why Intel's foundry play has so far failed. They primarily plan the manufacturing roadmap around their own products, not the foundry customer's needs. Customers rather go with TSMC.
Of this I have no doubt. While the details of designing and manufacturing chips goes way over my head quite often, I have read from people that did work at Intel or companies that have used their fabs, that it's a royal PITA, compared to the likes of TSMC. Having been able to do their own thing for so long, I suspect that opening up in a big way will take Intel quite some time, and present some major internal hurdles, as they will have to change the way they know how to do things into the ways to do them, or using other tools, that make it easier for third parties.
And most design houses have gone fabless for this reason, i.e. the mounting cost of leading-edge semiconductor manufacture.
Yes, but somebody has to do it, and that is Intel's primary business. The processors are items to move through the fabs, but producing them on a leading edge process, then producing other items on extremely mature processes, has more been a way to fill up those fabs, than it is that their primary business is the CPUs. That is, being able to, at a low cost per unit, produce massive amounts of chips, and sell them for a hefty profit, is Intel's business, much more than the chip design is. Outsourcing that would mean higher costs to produce each unit, and less control over its production.
Regardless, however, I think Intel is going to have to change, as time goes on, to a business model working on lower margins. Maybe not 5%, like the Chinese companies often do, but maybe ~25%, or something like that.
I definitely think fabless is Intel's destiny. If not in the next couple of generations, then in the end.
I'm going fabbing being their purpose, and destiny, with x86's dominance just being a happy accident for them along the way.
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