News Intel 2Q24 Financial Results

TESKATLIPOKA said:

Cost of sales increased by $3.1B while revenue dropped by $0.9B compared to last year, when they still managed 42.5% margins.
Foundries lost $5844M while revenue was only $4352M, meaning they needed $10B to earn to break even.

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LOL. I have had program managers pull this crap on me with respect to a product profitability standpoint. The "product" is profitable, it's just this fabrication thing that is making the company lose money.

Sure, sounds good, but you have to pay for fabrication of the product. If Intel isn't properly charging fab costs (fully loaded fab costs) to the product lines (which I suspect they are not), then you get this "funny money" "rob Peter to pay Paul" accounting where the "product" looks financially good and the other things look horribly bad.

AMD has the fabrication cost of the product built into COGS for the product. TSMC takes care of paying for all the "fully loaded" costs of fabrication in the unit price to AMD.

As I said, Intel has some serious restructuring to do if it hopes to return to anything resembling their previous profit levels.

adamge said:

If you could go back in a time machine 10 years and tell Intel that, they would really appreciate it. Instead it has been a very expensive, very slow lesson to learn.

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I suspect that all the information needed to understand the trend was there at Intel in plenty of time; however, human nature is to continue doing what you are already doing the same was as you are currently doing it. This is ESPECIALLY true if you happen to be successful doing it.

I am quite confident if you told an Intel exec 10 years ago that they were on a trajectory to become a take-over target with their current business model, they would have laughed you clear out of the room.

Sadly, these kinds of structural changes are quite difficult in a large company. Lots of "old guard" management everywhere to turn mind share around with..... not to mention developing a proper "Supplier" mentality for the fabrication plant. Intel is awful used to being the bully in the room, not the supplier. It's going to be a tough road IMO.

adamge said:

Strange statement, not congruent with the fact that Intel's strong product 10 years ago have left them with a HUGE marketshare lead despite objectively inferior product for the most recent 5 years (since Zen3's release).

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If you don't produce enough chips to meet demand then why are you surprised Intel kept a huge marketshare lead? People won't wait so they can buy a better product(AMD) and especially not those who are less tech savvy, which is a huge majority.

OneEng2 said:

LOL. I have had program managers pull this crap on me with respect to a product profitability standpoint. The "product" is profitable, it's just this fabrication thing that is making the company lose money.

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I didn't say that Intel products are not profitable. What I am saying is that ARL are more expensive to make, yet they can't sell It for more than the previous gen because of competition, so less profit.
Just compare previous gen with the current one:

OneEng2 said:

Sure, sounds good, but you have to pay for fabrication of the product. If Intel isn't properly charging fab costs (fully loaded fab costs) to the product lines (which I suspect they are not), then you get this "funny money" "rob Peter to pay Paul" accounting where the "product" looks financially good and the other things look horribly bad.

AMD has the fabrication cost of the product built into COGS for the product. TSMC takes care of paying for all the "fully loaded" costs of fabrication in the unit price to AMD.

As I said, Intel has some serious restructuring to do if it hopes to return to anything resembling their previous profit levels.

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For Intel It would be worse If they used creative number shifting to make Foundries worse and the products better, because If only the foundries are the problem, then at worst they can sell It and continue like AMD -> fabless, but It doesn't look like products are doing that great either based on revenue.

For Intel just restructuring won't be enough. They first need to start using their fabs to make their chips and not pay an external company to do that for them. Even If they managed this, they still wouldn't go back to previous profitability If they can't increase prices of their products, which is to be expected when production costs are rising and they are eating their margins.

In today's MSN
Intel slapped with class action lawsuit over crashing CPU fiasco

TESKATLIPOKA said:

If you don't produce enough chips to meet demand then why are you surprised Intel kept a huge marketshare lead? People won't wait so they can buy a better product(AMD) and especially not those who are less tech savvy, which is a huge majority.



I didn't say that Intel products are not profitable. What I am saying is that ARL are more expensive to make, yet they can't sell It for more than the previous gen because of competition, so less profit.
Just compare previous gen with the current one:

Model	Price	Model	Price	Model	Price
Core Ultra 9 285K	$589	Core Ultra 7 265K	$394	Core Ultra 5 245K	$309
Core i9 12900K	$589	Core i7 12700K	$409	Core i5 12600K	$289
Core i9 13900K	$589	Core i7 13700K	$409	Core i5 13600K	$319
Core i9 14900K	$589	Core i7 14700K	$409	Core i5 14600K	$319

For Intel It would be worse If they used creative number shifting to make Foundries worse and the products better, because If only the foundries are the problem, then at worst they can sell It and continue like AMD -> fabless, but It doesn't look like products are doing that great either based on revenue.

For Intel just restructuring won't be enough. They first need to start using their fabs to make their chips and not pay an external company to do that for them. Even If they managed this, they still wouldn't go back to previous profitability If they can't increase prices of their products, which is to be expected when production costs are rising and they are eating their margins.

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Right now, Intel is paying for BOTH an external FAB to make their chips, AND for all the R&D and production equipment for 18A. This is clearly not sustainable. One of those statements needs to be FALSE in the future.

Even if they are successful with 18A next year with CWF, that CPU alone will not pay for that horrendous 18A die shrink equipment and dev cost. In fact, I doubt all of the Intel CPU's combined will not do it adequately.

TSMC on the other hand gets to amortize their die shrink costs across many different customer CPU's and other chips.

... and it gets worse. The less market share Intel has, the fewer chips they amortize that huge development cost across. It's really a bad reverse snow-ball effect for Intel.

Dinosaur Lake with a free game! https://www.newegg.com/intel-core-i...-lga-1700-desktop-processor/p/N82E16819118462

Who will bite?

igor_kavinski said:

Dinosaur Lake with a free game! https://www.newegg.com/intel-core-i...-lga-1700-desktop-processor/p/N82E16819118462

Who will bite?

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Yesterday I opened the new 14900K dino I had, put it in my cheap Gigabyte board, for which the manufacturer is unable to make an updated BIOS, that works, verified that my 13900KS is indeed a good silicon, better by 75mV than the current 14900K, but even this mediocre chip performs so nicely, cool and efficiently when limited to 5 and 4 GHz. I am choosing a nicer home for my good chip.

I wish people stopped being stupid and just understood how nice these chips really are, once you take them away from the influence of their evil father.

igor_kavinski said:

Dinosaur Lake with a free game! https://www.newegg.com/intel-core-i...-lga-1700-desktop-processor/p/N82E16819118462

Who will bite?

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In Soviet Russia raptor lake bites you!

Using the ancient joke format felt appropriate here.

DAPUNISHER said:

In Soviet Russia raptor lake bites you!

Using the ancient joke format felt appropriate here.

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Da, tovarisch.

As an aside, there is a Q3 2024 results thread where people can talk about, you know, Intel things that's more recent.

DrMrLordX said:

Da, tovarisch.

As an aside, there is a Q3 2024 results thread where people can talk about, you know, Intel things that's more recent.

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What you did there; I see it.

adamge said:

Nothing in that link convinces me that it is in production.

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BTW, the new TOP 500 list is out:



A couple of notes:

• El Capitan murders it (no surprises there)
• Frontier actually improved its score from 1.206 EF on the last list to 1.353 EF
• Aurora did no new runs (despite all the talks on how they could probavbly improve upon their score)