What is going wrong for Intel?

It's not much of an article, but the question is certainly on everyone's mind.

The crazy part is that this is all after how much Intel has benefitted from the CHIPS act (financially, not strategically, as it's too soon for that). They're unable to compete even with unfair advantages funded by the American tax payers.

From everything I've heard and read, Gelsinger is a great CEO and a good person to have steering the ship during this crisis. He's been back 3 years, but a behemoth the size of Intel (with the burden of all the strategic mistakes it made in the Krzanich/Swan era) probably takes a lot longer than that to course correct.

The thing is, it's not in anyone's interest for Intel to fail. There are so few competitors at the top end of the scale that any one dropping out would be catastrophic for the market and the tech/industry. I don't know about the INTC stock price, but I pray that the company finds a way to keep relevant and competitive.

(At the same time, I'm reminded of all the juggernauts of the 70s and 80s and how incredulous it was that they ceased to exist and am reminded of the all too real possibility that this could be the beginning of the end for Intel.)

To do a fab build out and restructuring of this scale clearly they need to spend a lot of money. In that context the numbers from the financial report do not seem that shocking. This all seems to be quite an overreaction in the market. They still have a lot of revenue. They are still dominant in terms of market share. Their CPU products are competitive and reliable despite the process disadvantage. Yes there are issues some percentage of the consumer CPU high end but I'm sure the investigation will be completed and the right thing will be done, they cannot afford the reputational risk of not doing so.

I'm more concerned about how well 18a and beyond is coming on. Also how well is the sales side and client support for this going? I was thinking they were working more with TSMC to learn how this works from a client perspective so they can build something similar.

Regarding AI. Technically speaking isn't the AI hardware largely cut and paste? A much simpler CPU of which there are a few thousand copies. With the expertise they have in RTL design it does not seem that difficult.

That said I do not think that parallel compute of this nature is going to be future of AI, it is too expensive in terms of power. I'm sure a much more efficient structure will be designed in the coming years, e.g. neuromorphic.

Everything. And it's been going on for over a decade, sitting on their hands thinking AMD (and Arm/Apple) would never catch up.

My uninformed gut says Intel was more screwed by missing mobile than was immediately obvious. Sure, it lost them a bunch of money to not be in cellphones.

But also, as transistors have gotten smaller and designs have gotten more complex, yield, (which was always important) has become a massive problem. Chiplets are the solution, a defect just destroys one chiplet instead of the whole chip. Designs should use more chiplets, the smaller the better.

Intel’s trick of making giant monolithic designs turned into a liability. The smartphone fab, it turns out, is making chips that are perfectly fine for desktops and servers if you jam enough in one package. Epyc was the writing on the wall.

The entire company culture is trash? Lots of incompetent people at higher levels?

Intel lost something post 2010.

Years ago, I saw a comment which wrote that Intel significantly reduced the QA team so that Intel will suffer for the defective product in the near future.

In 2001, I did an internship at IBM. Ever since then, I have been convinced IBM should be going out of business any day now. Since then AWS was formed, and ate IBM's lunch. But IBM kept going. To my complete amazement, they are still in business, and doing fine. They had always seen less promising than Intel, and yet they are still there. I think Intel is undervalued, and is better positioned to make a come back.

Better question: what is going right for Intel?

IMVHO seeing what's public Intel have simply dream a world of big datacenters for AI and have ended up against the wall of reality: they desktop products sell well, even with the longest tails of scandals, the datacenters + endpoint, the cloud+mobile world does not take off as netbooks in the past.

The lesson learnt for me is that's about time to REALLY give up keeping the old mainframe + dumb terminal paradigms to came back to the desktop one simply telling the GAFAM: "you are done, your business model can't keep up" and financing a good revolution.

Intel in the past have done something nice with the Ultrabook design, it's about time to care of pure desktops.

I don't quite understand how Phoenix, AZ, became the focus for chip fabs in the US, and even the recent CHIPS-backed TSMC investment.

AZ does not have a lot of water, and the Colorado Basin treaties expire next year. There are interests from existing holders of water rights, the 7 US states, several Federal agencies (BLM, Army COE) and the international aspect with Mexico.

I assume the negotiations are challenging and at some point, the Feds will step in, to direct water supply to chip fabs, rather than golf courses and almond groves.

If their culture problems are so rampant, I hope management of all levels made up the majority of their layoffs.

Will this cause any of their upcoming Xeon chip schedules to slip? 15% sounds like a pretty severe cut.

i just bought intel stock at a 2012 price. i am fine with this :D

Umm, the article is whining that Intel isn't selling any "AI" chips.

They don't seem to care about the recent voltage scandal or any other QA problems Intel may have now. Or that the high end CPUs are better used as space heaters + vacuum cleaners.

Right for the wrong reasons?

Should have kept the dividend at a small, but non-zero value for psychological reasons.

The Apple M processors are the final nails in the coffin. The good news is Intel Macs are ridiculously cheap now.