They are not as efficient. Therefore it makes zero sense to get in an 8 year deal with Sony to sell chips with tiny margins. Intel needs margins and more cash. Freezing construction of plants in the EU is a much better decision than making console APUs.They need volume for their plant. To compete with AMD with same manufacturer they could only make profit with competitive margins if their silicon efficiency is at least same level as AMD. We know it isn't - they could only compete with their own manufacturing cabability.
For Intel as manufacturer that was 30 billion deal and they sure know they need those massive low margin deals to being able to continue as manufacturer. They did previously Apple modem deal which backfired badly because manufacturing deadlines slipped. So they didn't risk this time but that kind of strategy will put them out of manufacturing race altogether.They are not as efficient. Therefore it makes zero sense to get in an 8 year deal with Sony to sell chips with tiny margins. Intel needs margins and more cash. Freezing construction of plants in the EU is a much better decision than making console APUs.
I don’t agree. If SPR showed something is that something is, or at least was, very wrong with Intel’s culture. For Intel turnover to work they need to focus on 3-4 products and execute perfectly. Intel 3/18A, Lunar Lake/Arrow Lake-H, Sierra Forest and Granite Rapids is what is going to define Intel’s near future. Getting into unknown markets when you didn’t have a working competitive GPU, seems to me overreaching. Do 3/4 things perfectly, then expand.For Intel as manufacturer that was 30 billion deal and they sure know they need those massive low margin deals to being able to continue as manufacturer. They did previously Apple modem deal which backfired badly because manufacturing deadlines slipped. So they didn't risk this time but that kind of strategy will put them out of manufacturing race altogether.
Best part of Sony deal is that Sony would have paid develepment expenses. Thats pretty much how nearly bankcrupt AMD could develop competitive GPU arch. And Intel as silicon manufacturer won't survive with just some products. Volume is key to able stay on cutting edge. To have enough volume they need those mass produced low margin products and that Sony deal had ability to be also profitable deal unlike some ultra-low margin modem deals.I don’t agree. If SPR showed something is that something is, or at least was, very wrong with Intel’s culture. For Intel turnover to work they need to focus on 3-4 products and execute perfectly. Intel 3/18A, Lunar Lake/Arrow Lake-H, Sierra Forest and Granite Rapids is what is going to define Intel’s near future. Getting into unknown markets when you didn’t have a working competitive GPU, seems to me overreaching. Do 3/4 things perfectly, then expand.
How do we know the intel offered their own nodes? GPU tiles for the foreseeable future are going to be on TSMC.
The PlayStation chip deal originated in Intel's design segment, but would have been a boon to the financial performance of the foundry business after this year's separation.
- We must build on our momentum in Foundry as we near the launch of Intel 18A and drive greater capital efficiency across this part of our business.
- We must continue acting with urgency to create a more competitive cost structure and deliver the $10B in savings target we announced last month.
- We must refocus on our strong x86 franchise as we drive our AI strategy while streamlining our product portfolio in service to Intel customers and partners.
Specifically, Intel Foundry will produce an AI fabric chip for AWS on Intel 18A. We will also produce a custom Xeon 6 chip on Intel 3 that builds on our existing partnership, under which Intel produces Xeon Scalable processors for AWS. More broadly, we expect to have deep engagement with AWS on additional designs spanning Intel 18A, Intel 18AP, and Intel 14A.
- We recently increased capacity in Europe through our fab in Ireland, which will remain our lead European hub for the foreseeable future. We will pause our projects in Poland and Germany for approximately two years based on anticipated market demand.
- Malaysia remains an active design and manufacturing hub through our existing operations. We plan to complete the construction of our new advanced packaging factory in Malaysia but will align the startup with market conditions and increase the utilization of our existing capacity.
- There are no changes to our other manufacturing locations. We remain committed to our U.S. manufacturing investments and are moving forward with our projects in Arizona, Oregon, New Mexico, and Ohio. We remain well-positioned to scale up production around the world based on market demand as we grow our foundry business.
For Intel as manufacturer that was 30 billion deal and they sure know they need those massive low margin deals to being able to continue as manufacturer. They did previously Apple modem deal which backfired badly because manufacturing deadlines slipped. So they didn't risk this time but that kind of strategy will put them out of manufacturing race altogether.
No that won't happen. It's Amd product and they have to use foundries where AMD IP exists. Amd could of course do their full product stack IP on Intel process too, but that would cost billions and Sony sure aren't ready to pay for that. That's why Intel winning that original deal would have mattered, even if they first had to rely tsmc they could have changed foundry later if there was free production cabability. But reasons unknown they missed that deal.Intel's foundry could still win the PS6 SoC manufacturing contract when they do the first shrink. It'll be up to them to be competitive in pricing and power and beat TSMC for that business. The foundry contract won't be low margin, given that Sony has few options to choose from, and the PS6 volume hardly compares to the elephants like Apple, Nvidia and Qualcomm, and even they aren't in a position to dictate pricing to TSMC. If Sony's negotiators said "if you don't give us a better deal we're going to Samsung" then TSMC will hold the door open for them to leave the conference room.
Even if Intel won the PS6 design contract it isn't guaranteed Sony would have wanted Intel making them, so they might have been in a position of winning a low margin design contract (during a time when their design teams are already stretched) and seeing TSMC reap all the profits anyway.
Getting into unknown markets when you didn’t have a working competitive GPU, seems to me overreaching. Do 3/4 things perfectly, then expand.
I think TSMC signaled that US manufacturing costs will be higher, and from that, some implied that customers who order capacity from the US fabs may have to pay higher rate.Intel's foundry could still win the PS6 SoC manufacturing contract when they do the first shrink. It'll be up to them to be competitive in pricing and power and beat TSMC for that business. The foundry contract won't be low margin, given that Sony has few options to choose from, and the PS6 volume hardly compares to the elephants like Apple, Nvidia and Qualcomm, and even they aren't in a position to dictate pricing to TSMC. If Sony's negotiators said "if you don't give us a better deal we're going to Samsung" then TSMC will hold the door open for them to leave the conference room.
Even if Intel won the PS6 design contract it isn't guaranteed Sony would have wanted Intel making them, so they might have been in a position of winning a low margin design contract (during a time when their design teams are already stretched) and seeing TSMC reap all the profits anyway.