The article’s sub-title “…is the chip giant facing a Kodak moment?” might sound a bit sensationalist but in the world of disruptive tech, you don’t rule out any possibility. Especially if you follow how many times, the once iconic Intel has stumbled in the recent past “The company is stuck on an aging 10nm process; its desktop CPUs are ludicrously power hungry; its dedicated GPUs aren’t particularly competitive, even when their drivers do work; its upcoming processor families are hopelessly behind schedule; and it just killed off Optane, which was arguably its most promising development in recent memory.” No wonder then despite digitisation driving ubiquity of semiconductors in our lives, Intel’s shares have remained flat over the past 5 yrs, when its competitors AMD and Nvidia are up a glorious 8x and 5x respectively (despite the two being 40% lower than their Nov 21 peaks). With Intel entering contract manufacturing, a comparison with TSMC which has more than doubled in the same period, also pales. In the most recent quarter, it reported a half billion dollar loss. Intel brought back Pat Gelsinger as its CEO last year to stem the rot. Gelsinger who spent three decades in Intel including having known to have been the lead architect for the 486 processor, its CTO for many years and most famously having been mentored by the legendary Andy Grove. He had spent the last decade outside Intel running VMware. So what exactly does he need to fix?
“Intel is a massive organization filled with brilliant scientists, electrical engineers, and software developers. And yet, despite all of this talent, the company is falling behind rival AMD and faces a mounting threat from Arm processor competitors, which have gained a foothold in the lucrative cloud segment in recent years.
Intel’s Sapphire Rapids Xeon Scalable processors are without a doubt its most ambitious chips ever. In a single generation, Intel committed to not only delivering DDR5, PCIe 5.0, and CXL to the datacenter market, but that it would employ a multi-die chiplet architecture that would close the core-count gap with AMD.
Based on the performance we’ve seen from Ice Lake, the chip would have been a formidable challenger to AMD’s Milan-X had it shipped on time.
However, it appears that trying to perfect what took AMD years to get right wasn’t as easy as Intel thought. And beginning in mid 2021, the company began pushing the launch back first to Q1 2022, then to 1H 2022, then to 2H. And this week, it was revealed in NDAed documents obtained by Igor’s Lab that the chip may not be ready until Q1 2023.”
“…Perhaps the more important question for Gelsinger is how do you instill confidence in a corporation that can’t ship a product on time to save its life?”
“…Gelsinger’s ascension to CEO can be attributed in large part to Intel’s failure to bring a working 7nm process — now dubbed Intel 4 — to market on time. And in the 1.5 year since taking over, Gelsinger has managed to shift the conversation away from its long-delay process.
Intel can claim up and down that Intel 4 is on track to ship in 2023 with Meteor Lake, but the company’s track record suggests that’s wishful thinking.
…Gelsinger hasn’t made things any easier for himself in this regard. Opening Intel’s fabs to contract manufacturing was a bold move, but who is going to buy your chips if your process tech never arrives on time? If Intel wants to steal share from TSMC for leading edge chip manufacturing, it needs a competitive process. As it stands, it doesn’t look like it has one.
… To put it bluntly, Intel has managed to squander its lead over rivals and its massive reserves of talent on over-ambitious projects that have time and again arrived late to the party.
And yet, this is a company that thinks it’s worthy of the lion’s share of the $52 billion in factory subsidies passed by Congress last month.”
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