A couple of losing quarters is nothing. Just ask AMD. They weathered years of losing quarters.
It's better to have some short term pain now, than to be increasingly non competitive in the future.
Intel's problem is not a declining future but a declining present. The future is now. Lower margin gamer GPUs is not a good investment when you're hemorrhaging money and will continue almost certainly for several more years. Just compare the silicon needed for between CPUs and GPUs for a given sales price, plus all that essential software work with each big game.
It's better to have some short term pain now, than to be increasingly non competitive in the future.
I take it you've never met an MBA?
Profit now trumps everything else. Even to the detriment of the company in question.
Gelsinger is an Engineer, not an MBA.
A couple of losing quarters is nothing. Just ask AMD. They weathered years of losing quarters.
It's better to have some short term pain now, than to be increasingly non competitive in the future.
A couple of losing quarters is nothing. Just ask AMD. They weathered years of losing quarters.
It's better to have some short term pain now, than to be increasingly non competitive in the future.
Joking here.A couple of losing quarters is nothing. Just ask AMD. They weathered years of losing quarters.
It's better to have some short term pain now, than to be increasingly non competitive in the future.
Joking here.
So Mr Seer, how many quarters you'll bet you life against? I really think this will be a lot more than a couple of quarters if nothing changes. Their server fiasco, for one, is very far from stabilizing.
I'm suggesting that if you need to cut expenses, you cut that which will have the lowest margin and probably the longest time before positive returns.So are you going to suggest they abandon the Server business next? Then abandon the Fab business?
There is a sense of denial that Intel is in real trouble. The wrong decisions could sink them to 2nd class status. This is possible, as hard to imagine as it seems. Many dominant companies have gone that route.
I get the sense of chicken little from you. One bad quarter and the sky is falling.
Intel will survive in one form or another, but if they can not reverse this trend quickly, they may become a very different company soon.
One losing quarter is not a trend. If they have a couple more losers, then we can talk trends.
Their revenues have been in decline for awhile. That's the trend. And it suddenly got a lot worse.
I'm suggesting that if you need to cut expenses, you cut that which will have the lowest margin and probably the longest time before positive returns.
There is a sense of denial that Intel is in real trouble. The wrong decisions could sink them to 2nd class status. This is possible, as hard to imagine as it seems. Many dominant companies have gone that route.
This misunderstands the whole purpose of the GPU business. Intel need to keep increasing their silicon volumes, so that they can pay the ever increasing cost of new cutting edge fabs. Intel Foundry Services is one way to do that, but another way to do that is with Intel GPUs. They might not be as high margin as server CPUs, but if they can fill fabs then they're worth chasing.
Failing to get sufficient volumes to fill their fabs would be a long term catastrophe for Intel.
And yet they are fabbing GPUs at TSMC...
In the short term, yes.
But you don't react to short term market conditions by killing off vital sections of your business to save a few bucks.
That seems to be the opposite of a successful strategy. Let me reframe what you wrote.This misunderstands the whole purpose of the GPU business. Intel need to keep increasing their silicon volumes, so that they can pay the ever increasing cost of new cutting edge fabs. Intel Foundry Services is one way to do that, but another way to do that is with Intel GPUs. They might not be as high margin as server CPUs, but if they can fill fabs then they're worth chasing.
Failing to get sufficient volumes to fill their fabs would be a long term catastrophe for Intel.
That seems to be the opposite of a successful strategy. Let me reframe what you wrote.
Lets build fabs and then try to do competitive designs able to maximize their use. What I understand from your post is that Intel has too many fabs and/or the wrong (not enough leading edge) ones, so they need to make work to keep them utilized.
Do your brilliant designs and plan for the fab space needed to produce it. Not build the fab space and then look for designs to use it.
Is build it and they will come really what Intel should be doing? Maybe they should be cutting fabs.
Intel being a fab company as some have suggested, will find this decision impossible to make, until external factors become too stronge to resist. I hope it does'nt reach that point, because if it does, they will have to be in a really precarious spot, with their survival at stake.
I would agree with you there. It's important not to be dismissive of the threats facing Intel in the immediate future, though, especially since there is much more in play than a "short term market condition".
I understand why they want to do what you claim, but I stand by what I wrote. They still can succeed, but its a high risk gamble to do what you suggest, plus, I feel I've seen this movie before.The R&D for a new silicon manufacturing process costs billions of dollars, and so does purchasing all the equipment. And each generation gets more and more expensive. There's a reason why IBM, Texas Instruments, Globalfoundries, AMD, STMicro, etc have all given up on making cutting edge chips- because it's too expensive. You need enormous volumes to amortize those costs, and the volumes required increase every generation. That's why the industry has consolidated to just TSMC, Intel and Samsung.
If Intel wants to keep in the fab game, they need a new way to keep increasing their volumes. The PC market isn't growing any more, and their server sales have peaked. They need to find a new market- hence GPUs.