Intel’s board, and an example of when boards and short-termism fail(fabricatedknowledge.com)
fabricatedknowledge.com
Intel’s board, and an example of when boards and short-termism fail
https://www.fabricatedknowledge.com/p/the-death-of-intel-when-boards-fail
287 comments
Well said. Everyone kept acting like Intel “should be” an innovator but was somehow failing, when the shareholders were running it as a cash cow all along. Rightly or wrongly, they decided a long time ago that it would be more lucrative for Intel to be in decline, and that became self-fulfilling.
> the shareholders were running it as a cash cow all along
Those shareholders have seen an average dividend yield of 2.83% [1] in the past 5 years. In the meantime, the inflation rate has been 2.43%. And if you're about to say 'stock buybacks are more tax-efficient' the stock price is down 63% over that period.
If you think that's a cash cow, you should see what an amazing deal 5-year treasury bills are, with their jaw-dropping 4% return on investment.
[1] https://ycharts.com/companies/INTC/dividend_yield
Those shareholders have seen an average dividend yield of 2.83% [1] in the past 5 years. In the meantime, the inflation rate has been 2.43%. And if you're about to say 'stock buybacks are more tax-efficient' the stock price is down 63% over that period.
If you think that's a cash cow, you should see what an amazing deal 5-year treasury bills are, with their jaw-dropping 4% return on investment.
[1] https://ycharts.com/companies/INTC/dividend_yield
GP probably means the 2010s, during which the board milked the company instead of investing.
Indeed, that is what I meant. And the fact that it is a poorly-performing cash cow now does not mean it is not run as a cash cow.
You can run something as a cash cow and not get tons of money out, just like you can run something like a star without actually being successful.
Intent != outcome
Intent != outcome
This is another reason that any federal investment in Intel should have strings attached.
I think Intel should just be bypassed entirely. Each node is such a leap in process it requires entirely new fabs. At that point going with the poorly run incumbent is pointless.
A few facts about intel. Wages have been stagnant there for over 20years now. Just recently they had wage reductions across the company and there’s been layoffs for those 20years of stock declines. Tsmc in Taiwan literally pays double on a ppp basis (it’s not even that far off on a direct dollar to dollar basis). Even china has been poaching from intel. Look up the Chinese government funded Lianqiu Lake R&D Center, they are offering more for talent in raw $ terms in a custom built luxury city. And yes I get that if you were born in the USA you probably want to stay there but there’s no hope of intel poaching international talent anymore.
Do you know what the current boards plan is? More layoffs and lower wages. Like how the fuck can they compete without talent which they haven’t had for over 20years now. Everyone there knows it’s a stepping stone job. Do the bare minimum in hire and jump as soon as the next opportunity arises. And the government wants to give funding to this short sighted turd.
A few facts about intel. Wages have been stagnant there for over 20years now. Just recently they had wage reductions across the company and there’s been layoffs for those 20years of stock declines. Tsmc in Taiwan literally pays double on a ppp basis (it’s not even that far off on a direct dollar to dollar basis). Even china has been poaching from intel. Look up the Chinese government funded Lianqiu Lake R&D Center, they are offering more for talent in raw $ terms in a custom built luxury city. And yes I get that if you were born in the USA you probably want to stay there but there’s no hope of intel poaching international talent anymore.
Do you know what the current boards plan is? More layoffs and lower wages. Like how the fuck can they compete without talent which they haven’t had for over 20years now. Everyone there knows it’s a stepping stone job. Do the bare minimum in hire and jump as soon as the next opportunity arises. And the government wants to give funding to this short sighted turd.
Intel is hugely bloated.
- Intel: 126,000 employees
- AMD: 26,000 employees
- TMSC: 76,000 employees
- NVIDIA: 29,000 employees
- Intel: 126,000 employees
- AMD: 26,000 employees
- TMSC: 76,000 employees
- NVIDIA: 29,000 employees
If you add AMD (design) + TSMC (fab) it's not that far off from Intel (who does both, and sells >3x AMD by units). Clearly there are struggles at Intel but the simple math doesn't explain it.
You’d need to split that by business segment.
Intel has more foundries than even tsmc and the others don’t have foundries.
Intel has more foundries than even tsmc and the others don’t have foundries.
AMD 26K + TSMC 76K = 102k ~=~ INTEL (126K - 15K) = 110k
You might want to compare by operation.
Intel is also invested outside cpu and gpu architecture.
It does. No share buybacks for example.
The board’s lack of technical or even product expertise struck me when it was announced Gelsinger would abruptly retire. They don’t have the chops to be the wartime board Intel needs. They likely have no idea if Gelsinger was on the right path or chasing a dream. I believe Gelsinger was the right person for the job, but the board wasn’t and isn’t. The board would have had to approve of his plans. They should have known what they were signing up for.
For Gelsinger’s part he was probably too cavalier with finances and market sentiment to ever sustain any political capital.
For Gelsinger’s part he was probably too cavalier with finances and market sentiment to ever sustain any political capital.
I agree that the board's lack of technical expertise is an issue, but I think the root issue is - and hear me out, because this sounds ridiculous - the vibes.
At the end of the day, a company is a machine to turn employee labor into revenue. Intel has clearly been a sinking ship for years now. What kind of people work at a failing company? What kind of people serve on its board? Is this portrait of the board not a portrait of any other failing business?
At the end of the day, a company is a machine to turn employee labor into revenue. Intel has clearly been a sinking ship for years now. What kind of people work at a failing company? What kind of people serve on its board? Is this portrait of the board not a portrait of any other failing business?
> the vibes
I went to lunch the other day with a friend. We had both worked at Intel during our early careers, and we still know people who are there over 20 years later.
Of course the topic arose of our old workplace. We had a great time there it should be said. But neither of us stayed on, and it was vibes.
Even at that time, as a young guy in university, I thought something was wrong. I couldn't tell what, since I was a young guy who barely knew anything about the business. But I knew that I felt uncomfortable about potentially spending decades at a place where everyone was so relaxed. There was no urgency. People would come in, find a colleague to have coffee with, and that was their day. I checked with the other interns as well, it was really chill.
I was working on my thesis, and my team was working on rolling out what would later be called WiFi. Amazingly, part of the strategy was to slow down certain standards, because we were behind in some of the fabs. That didn't seem like what you would do as a cutting-edge technology company. People at the all-hands would ask things like "should we keep AMD around just for show? So that we aren't a monopoly?". Well, that problem has been solved now.
I got offered a permanent role but never even considered it.
I went to lunch the other day with a friend. We had both worked at Intel during our early careers, and we still know people who are there over 20 years later.
Of course the topic arose of our old workplace. We had a great time there it should be said. But neither of us stayed on, and it was vibes.
Even at that time, as a young guy in university, I thought something was wrong. I couldn't tell what, since I was a young guy who barely knew anything about the business. But I knew that I felt uncomfortable about potentially spending decades at a place where everyone was so relaxed. There was no urgency. People would come in, find a colleague to have coffee with, and that was their day. I checked with the other interns as well, it was really chill.
I was working on my thesis, and my team was working on rolling out what would later be called WiFi. Amazingly, part of the strategy was to slow down certain standards, because we were behind in some of the fabs. That didn't seem like what you would do as a cutting-edge technology company. People at the all-hands would ask things like "should we keep AMD around just for show? So that we aren't a monopoly?". Well, that problem has been solved now.
I got offered a permanent role but never even considered it.
A phenomena so common it has a name:
https://medium.com/geekculture/the-dead-sea-effect-d71df1372...
https://medium.com/geekculture/the-dead-sea-effect-d71df1372...
It’s so easy to fix with competent leadership. Kind of sad to see the state of American “leaders”
I recently left a big company exactly for this reason. And the sibling post is probably right, the Dead Sea affect probably plays a huge role. I didn’t see very many people that were ambitious and it was way too “relaxed”.
As someone who worked at Intel for 5ish years a while ago, I partly agree. There was a fatalism to the culture; a sense that any initiative had to be simultaneously super low risk and guaranteed to generate $1B in revenue within a couple of years. It had to be 100% predictable and planned month by month years in advance, and also exactly what customers would want on day one.
The people who “succeeded” were those who could sell that story to the finance org (who essentially made all the product decisions), and who could move onward and upward before the fairy tale collapsed.
The disconnect between the aspirational culture (risk taking, tech-forward, customer-focused) and the real culture (risk averse, finance-forward, planning-focused) was extreme. The whole place was like a filter designed to retain only those who had no interest or capability to fix the systemic issues.
The people who “succeeded” were those who could sell that story to the finance org (who essentially made all the product decisions), and who could move onward and upward before the fairy tale collapsed.
The disconnect between the aspirational culture (risk taking, tech-forward, customer-focused) and the real culture (risk averse, finance-forward, planning-focused) was extreme. The whole place was like a filter designed to retain only those who had no interest or capability to fix the systemic issues.
> There was a fatalism to the culture; a sense that any initiative had to be simultaneously super low risk and guaranteed to generate $1B in revenue within a couple of years. It had to be 100% predictable and planned month by month years in advance
Ultimately, this is what MBA-style corporations do. They want unfettered predictability and massive revenues from every initiative. They even set up corporate structures to penalize failures.
As a result, layers and layers of managers, and managers and engineers are all risk averse. They will be penalized for being wrong, their jobs and livelihoods are put on stake.
What does one expect in such an environment? Innovation/risk-taking or politics of self-preservation/blaming/backstabbing?
The MBA-style is a failure for innovation and Intel should be a case study in every MBA school.
Ultimately, this is what MBA-style corporations do. They want unfettered predictability and massive revenues from every initiative. They even set up corporate structures to penalize failures.
As a result, layers and layers of managers, and managers and engineers are all risk averse. They will be penalized for being wrong, their jobs and livelihoods are put on stake.
What does one expect in such an environment? Innovation/risk-taking or politics of self-preservation/blaming/backstabbing?
The MBA-style is a failure for innovation and Intel should be a case study in every MBA school.
Have you ever taken an MBA course? It's so weird for you to refer to "MBA-style corporations" considering that "The Innovator's Dilemma" by Clayton M. Christensen has literally been a core text in most MBA programs for decades. If anything, Intel has become an anti MBA-style corporation.
https://hbsp.harvard.edu/product/10706-PDF-ENG
https://hbsp.harvard.edu/product/10706-PDF-ENG
"MBA-style corporations" does not mean that they have read the innovators dilemma.
An MBA-style corporation is one that is lost in a vast trove of metrics. They focus too much on the birds-eye view dashboard style of work - ultimately forgetting that it is less important to meet metrics and more important to keep innovating.
The metric-driven production is well suited for warehouses and factories where every unit is the same as the other. Because every unit is the same your business can focus on eeking optimizations visible via metrics.
But technology is not like that at all. Every unit of production is so different from one another. You cannot have a top heavy company that is just focusing on metrics. You need the top to be intelligently engaged with market, customers, systems, and employees.
Put in another words, if your company's primary focus is margin management, shareholder return, and squeezing production (MBA-school style), your company will have a very very hard time innovating.
Case in point - Intel - which has haemorrhaged itself with years of focus on buybacks and dividends and unit production - but not studying the market, studying modern tech, and innovation.
An MBA-style corporation is one that is lost in a vast trove of metrics. They focus too much on the birds-eye view dashboard style of work - ultimately forgetting that it is less important to meet metrics and more important to keep innovating.
The metric-driven production is well suited for warehouses and factories where every unit is the same as the other. Because every unit is the same your business can focus on eeking optimizations visible via metrics.
But technology is not like that at all. Every unit of production is so different from one another. You cannot have a top heavy company that is just focusing on metrics. You need the top to be intelligently engaged with market, customers, systems, and employees.
Put in another words, if your company's primary focus is margin management, shareholder return, and squeezing production (MBA-school style), your company will have a very very hard time innovating.
Case in point - Intel - which has haemorrhaged itself with years of focus on buybacks and dividends and unit production - but not studying the market, studying modern tech, and innovation.
I think the issue with MBA-led companies is that you have people with an MBA that have very little direct experience. The MBA itself is useful, but detached from the experience of the industry and organization leads to misguided thinking.
That is correct. MBA degree can be useful. But just hiring an MBA who doesn't have an appreciation and skill in the domain is just going to do what they can - counting metrics.
Eh, I have an MBA, and that is not at all my experience. At my program, there was a ton of focus on agility, avoiding sunk cost fallacies, the importance of a healthy corporate culture, what a tax elaborate structures can be, and so on.
And it was before Intel failed, but we had case studies on IBM, Enron, and General Motors and how misaligned incentives led to incompetence, corruption, and failure.
You may have had bad experiences with some individual MBAs (they run the gamut, just like everyone else), or you may have absorbed some stereotypes, but that's really not at all what is taught.
And it was before Intel failed, but we had case studies on IBM, Enron, and General Motors and how misaligned incentives led to incompetence, corruption, and failure.
You may have had bad experiences with some individual MBAs (they run the gamut, just like everyone else), or you may have absorbed some stereotypes, but that's really not at all what is taught.
I was not aware that my last two companies have secretly been Intel because every one of these factors applied to them.
It’s really another aspect of the innovator’s dilemma - interesting $-wise and margin-wise is so limited that they end up never doing anything interesting.
It is a problem really specific to high margin companies.
You actually don’t see this behavior at low margin businesses because the spectrum of things that can be done which aren’t immediately labeled a margin drag is a lot wider.
The company I work for now put all the up front effort into a new product line which would lilekk pk y have easily gotten to a billion or two a year within 3y with the right customer wins, but out normal margin is very high and the new line of business would have been very profitable objectively but would have been a margin drag. Every dollar would have lowered the gross and net margin.
It’s really another aspect of the innovator’s dilemma - interesting $-wise and margin-wise is so limited that they end up never doing anything interesting.
It is a problem really specific to high margin companies.
You actually don’t see this behavior at low margin businesses because the spectrum of things that can be done which aren’t immediately labeled a margin drag is a lot wider.
The company I work for now put all the up front effort into a new product line which would lilekk pk y have easily gotten to a billion or two a year within 3y with the right customer wins, but out normal margin is very high and the new line of business would have been very profitable objectively but would have been a margin drag. Every dollar would have lowered the gross and net margin.
This describes almost every large enterprise I've ever done work for or worked at.
Not even large companies. High margin companies tend to always think the same way. Don’t rock the boat. Change is the enemy. Eventually people lose track of what made the company profitable in the first place and simply follow the same process religiously. Suggestions to evolve or change the process are met with hostility.
In most giant companies it is a reasonable strategy.
The critical difference is most large companies don’t need to innovate. United doesn’t design aircraft, airports, etc they compete with other huge companies in an extremely capital intensive industry and execution is what matters.
FedEx, Walmart, Bank of America, etc all need to keep up with their competitors but there’s no need to make risky bets when slow and steady brings in billions of revenue and nothing external is going to drive them out of business quickly.
Intel essentially forgot just how ruthless their industry was and got crushed.
The critical difference is most large companies don’t need to innovate. United doesn’t design aircraft, airports, etc they compete with other huge companies in an extremely capital intensive industry and execution is what matters.
FedEx, Walmart, Bank of America, etc all need to keep up with their competitors but there’s no need to make risky bets when slow and steady brings in billions of revenue and nothing external is going to drive them out of business quickly.
Intel essentially forgot just how ruthless their industry was and got crushed.
I think all major airlines have pretty much gotten to the point of bankruptcy without bailouts
Again a logical choice.
Much like banks the boards of airlines are incentivized to have high levels of debt supported dividends / buybacks because it’s a highly volatile industry. Money isn’t clawed back from investors, but cash reserves disappear in a downturn.
Really any high risk industry where profits can be extracted in good times faces the same issues. The possibility for concessions from governments or people they owe money to like retires and bond holders etc, then repeat the cycle while maintaining control incentives high risk strategies because they are leveraging other people’s money.
Much like banks the boards of airlines are incentivized to have high levels of debt supported dividends / buybacks because it’s a highly volatile industry. Money isn’t clawed back from investors, but cash reserves disappear in a downturn.
Really any high risk industry where profits can be extracted in good times faces the same issues. The possibility for concessions from governments or people they owe money to like retires and bond holders etc, then repeat the cycle while maintaining control incentives high risk strategies because they are leveraging other people’s money.
The pay is ridiculously low. Lower than tsmc in Taiwan on a ppp basis (not that far off in raw $ terms). Much lower than tiny hardware startups in the USA. Monumentally lower than AMD or nvidia, especially with stock grants factored in.
No pay rises for over 20years now. Layoffs on a routine basis. They asked everyone to take a pay cut last year. All of this in an extremely competitive labour market.
It’s pretty obvious to anyone that a job at intel is temporary. You take the job and do the bare minimum (because hey you’re paid bare minimum) and keep looking. There isn’t going to be a single employee outside the board at intel who isn’t browsing for a new job given the wage disparity. Everyone knows this. If you have a brilliant improvement for process keep it to yourself and take it to the next job. A low level position at a startup pays more than a senior role at intel at this point. It’s a laughing stock and the most recent statement at the last earnings was more layoffs and wage freezes to give more shareholder value.
They already have 0 serious talent and nobody gives a fuck there, reasonably so. “You’re going to lay me off from by far the lowest paying company in tech if I don’t give 100%?” “Ok!”.
It’s such a joke of a company and has been for 20 years now and the investors have made it clear they want another 20 years of this.
No pay rises for over 20years now. Layoffs on a routine basis. They asked everyone to take a pay cut last year. All of this in an extremely competitive labour market.
It’s pretty obvious to anyone that a job at intel is temporary. You take the job and do the bare minimum (because hey you’re paid bare minimum) and keep looking. There isn’t going to be a single employee outside the board at intel who isn’t browsing for a new job given the wage disparity. Everyone knows this. If you have a brilliant improvement for process keep it to yourself and take it to the next job. A low level position at a startup pays more than a senior role at intel at this point. It’s a laughing stock and the most recent statement at the last earnings was more layoffs and wage freezes to give more shareholder value.
They already have 0 serious talent and nobody gives a fuck there, reasonably so. “You’re going to lay me off from by far the lowest paying company in tech if I don’t give 100%?” “Ok!”.
It’s such a joke of a company and has been for 20 years now and the investors have made it clear they want another 20 years of this.
Do you want $77k/yr for a job with degree requirements at intel in an extremely high cost of living area or would you rather get well over $200k/yr at a competitor for the exact same job description. Lol. This was one random example out of pretty much any role at intel just to give awareness of how dire 20 years of wage freezes from short term investors becomes over time.
https://www.indeed.com/cmp/Intel-Corporation/job-titles/Inte...
https://www.glassdoor.com/Salary/NVIDIA-Signal-Integrity-Eng...
https://www.indeed.com/cmp/Intel-Corporation/job-titles/Inte...
https://www.glassdoor.com/Salary/NVIDIA-Signal-Integrity-Eng...
Wow $77k holy shit that's uhh
not doing so well with inflation.
Yeah I think people don’t realize just how dire it is at Intel. The talk above of the culture being on a death march can easily be explained by the jobs at intel having literally nothing at stake. And they announced even more layoffs and wage freezes at the last quarterly earnings.
It’s not an engineering run company like the successful big tech companies. Everyone working at intel is there temporarily and there’s no reason to build a long term career there. You jump asap.
I don’t see the shareholders voting for a reasonable tripling (quadrupling?) of engineer salaries anytime soon given the short term thinking track record. Which means I think the only way out is for an entirely new engineer run company to appear.
Intel have run on momentum to this point. They actually have 10nm foundries operational due to some level of talent continuing to persist over the past 20 years. They can’t seem to get much further past that (smaller nodes than that have reported terrible yields). They have more or less competitive cpus for sale (although they clearly hit a wall in that aspect to the point the latest CPUs bench exactly the same or worse than their own previous generations).
I think the momentum has definitely run out and the talent is gone at this point. The momentum is now in the other direction. Morale is dire, no one working there gives anymore of a fuck about their job than the kid pushing trolleys at the grocery store. Their CPUs are not advancing with each generation at all anymore and they cannot get reasonable yields on newer fab nodes.
It’s not an engineering run company like the successful big tech companies. Everyone working at intel is there temporarily and there’s no reason to build a long term career there. You jump asap.
I don’t see the shareholders voting for a reasonable tripling (quadrupling?) of engineer salaries anytime soon given the short term thinking track record. Which means I think the only way out is for an entirely new engineer run company to appear.
Intel have run on momentum to this point. They actually have 10nm foundries operational due to some level of talent continuing to persist over the past 20 years. They can’t seem to get much further past that (smaller nodes than that have reported terrible yields). They have more or less competitive cpus for sale (although they clearly hit a wall in that aspect to the point the latest CPUs bench exactly the same or worse than their own previous generations).
I think the momentum has definitely run out and the talent is gone at this point. The momentum is now in the other direction. Morale is dire, no one working there gives anymore of a fuck about their job than the kid pushing trolleys at the grocery store. Their CPUs are not advancing with each generation at all anymore and they cannot get reasonable yields on newer fab nodes.
Culture eats strategy for breakfast.
Intel's innovate or die culture died years ago
Inertia has taken its time but the company itself is catching up
Intel's innovate or die culture died years ago
Inertia has taken its time but the company itself is catching up
People seeking permanent US residency via an H-1B visa want to work at a failing company. And I don't blame them; from their perspective it's a totally rational choice as long as the company doesn't fire them before they get a green card.
Interesting take, but wouldn't also have the chance to attract the exactly right people too? Renegades, outcasts who dreamed too big for Nvidia or never got the opportunity at TSMC maybe?
There are many comeback stories, Apple being a particularly great one.
There are many comeback stories, Apple being a particularly great one.
I don't want to belittle Apple's success, but managing the turnaround at Apple didn't require the kind of long-term planning and commitment that investments in semiconductor manufacturing require.
I wouldn't be so sure about that. Apple is a huge hardware machine, and has been, since Day One. They not only have to deal with manufacturing hardware, but also promotion and distribution, which is not for the faint of heart. Most of Intel's work is B2B, while Apple is B2C.
Steve Jobs was particularly good at playing The Long Game; something American CEOs generally suck at.
Steve Jobs was particularly good at playing The Long Game; something American CEOs generally suck at.
While it’s true that hardware was a central part of Apple’s turnaround, it was the comparatively simple and quick hardware of designing boards with off the shelf parts (at the time). That’s actually closer to software than the “hire the bulldozers to break ground for the building that is designed from blueprints to house the highly custom machines designed to make the chips using the fab processes that we’re betting the company on” kind of hardware.
At its core, Intel (like TSMC) is more of a manufacturing company than a tech company.
At its core, Intel (like TSMC) is more of a manufacturing company than a tech company.
I was thinking more about the long-term planning that Jobs was so known for. He would develop product lines that would take years to break even. Not all were able to make the cut.
I worked for a Japanese corporation, and most of their initiatives had decade-long timelines.
US companies tend to have 3-month-long timelines (I have no idea why /s).
I worked for a Japanese corporation, and most of their initiatives had decade-long timelines.
US companies tend to have 3-month-long timelines (I have no idea why /s).
Apple today is known as a totally unreliable partner when it comes to developing and deploying tech. The OLED factories come to mind.
> US companies tend to have 3-month-long timelines (I have no idea why /s).
I don’t understand this platitude because the largest and most profitable businesses in the world, US tech and pharma companies, have very long timelines.
Amazon took 20+ years to literally build infrastructure, the early investors of Facebook were not looking for a 3 month payday, they invested billions for the 10+ year payday.
See the HN threads for when Zuckerberg paid for Instagram and WhatsApp, with so many wondering how he would recoup the enormous investment.
Apple probably plowed billions into watches AirPods and M processors for years before it saw a return, going so far as to lend money to TSMC for many years with no guarantee of TSMC being able to make the product they wanted.
Tesla, Alphabet’s Waymo bet, Uber, Nvidia, so many publicly listed businesses have a years long timelines
Same for US pharma, it takes decades to get a product to market, with a high chance it never does.
I don’t understand this platitude because the largest and most profitable businesses in the world, US tech and pharma companies, have very long timelines.
Amazon took 20+ years to literally build infrastructure, the early investors of Facebook were not looking for a 3 month payday, they invested billions for the 10+ year payday.
See the HN threads for when Zuckerberg paid for Instagram and WhatsApp, with so many wondering how he would recoup the enormous investment.
Apple probably plowed billions into watches AirPods and M processors for years before it saw a return, going so far as to lend money to TSMC for many years with no guarantee of TSMC being able to make the product they wanted.
Tesla, Alphabet’s Waymo bet, Uber, Nvidia, so many publicly listed businesses have a years long timelines
Same for US pharma, it takes decades to get a product to market, with a high chance it never does.
Every single example that you gave, had visionaries behind the long-term pushes.
Steve Jobs had a lot of failures. It's just that his successes were so successful, that people forget about the duds.
These visionaries don't just have plans, they have fiendish plots, that would make a Grand Vizier hang his head in shame.
But they move on, and that's when the "quarter-miners" inevitably move in.
Steve Jobs had a lot of failures. It's just that his successes were so successful, that people forget about the duds.
These visionaries don't just have plans, they have fiendish plots, that would make a Grand Vizier hang his head in shame.
But they move on, and that's when the "quarter-miners" inevitably move in.
The formula seems to be “businesses led by people with long term goals + filled with employees capable of executing + luck”.
I don’t think “US” is a useful qualifier, publicly listed businesses all over the world have the same short-termism without the right ingredients.
I don’t think “US” is a useful qualifier, publicly listed businesses all over the world have the same short-termism without the right ingredients.
The Japanese basically have "long-terminism" baked into their corporate bylaws.
The company I worked for, is a pretty "old-fashioned" one, so may no longer be representative of the standard, but it didn't matter who was in charge. All planning was done in 10/5/3/1 year process; with the goals getting "sharper," as you approached zero.
It was not particularly conducive to software development, but worked fairly well, for most of the stuff they made.
The company I worked for, is a pretty "old-fashioned" one, so may no longer be representative of the standard, but it didn't matter who was in charge. All planning was done in 10/5/3/1 year process; with the goals getting "sharper," as you approached zero.
It was not particularly conducive to software development, but worked fairly well, for most of the stuff they made.
Apple Watch, AirPods, and M-Series chips are all squarely Tim Cook-era products.
Cook became CEO in 2011. Apple Watch started development after Jobs’ death. It was announced in 2014. AirPods were 2015. M-Series chips shipped in November 2020.
Cook became CEO in 2011. Apple Watch started development after Jobs’ death. It was announced in 2014. AirPods were 2015. M-Series chips shipped in November 2020.
Good points. Thanks for the corrections.
But I also never considered Tim Cook a "quarter-miner." In fact, I think that he's known for standing up to them.
But I also never considered Tim Cook a "quarter-miner." In fact, I think that he's known for standing up to them.
Such people are not hired by this companies, the hiring process is strongly against them. Also such people have better things in life to do and fight for, not the worst of the corporate world and a board of pokemons.
I think attracting these sorts of minds also depends on the resources a company can provide to them. Right now intel is keeping their belt tight. Iirc, there was a whole team of brilliant engineers who were working on a RISC V project let go from Intel late summer/early fall. I’ve read about talks regarding a sort of brain drain occuring.
There are also a lot of geopolitical interests in helping Intel succeed. As much as investors might balk at Intel today, the amount of money that Western governments can toss at the problem is effectively infinite. (Looking at Defense contractors as an example; horrendously inefficient, but tax revenue is effectively perpetually guaranteed to keep flowing.)
It's silly to frame it this way, but even though the US and allies pay gobs for planes like the F-35, it's also what continues to allow the stream of taxable money to continue.
I view Intel in a similar light. Even if they stay inefficient, there will still be money for a long time because the West needs a way to be self-sufficient. The cost of not having a backup is too high (tens of trillions of dollars when I last looked into it).
It's a weird market that doesn't obey a lot of the conventional rules of capitalism. Yes, it would be better if Intel were able to compete without government subsidies, and maybe they will. But even if they don't it's very unlikely they'll totally crater because of how central this "power" is, and TSMC will never cede full control of their latest tech until the UN recognizes Taiwan as a distinct entity from China (imo).
It's silly to frame it this way, but even though the US and allies pay gobs for planes like the F-35, it's also what continues to allow the stream of taxable money to continue.
I view Intel in a similar light. Even if they stay inefficient, there will still be money for a long time because the West needs a way to be self-sufficient. The cost of not having a backup is too high (tens of trillions of dollars when I last looked into it).
It's a weird market that doesn't obey a lot of the conventional rules of capitalism. Yes, it would be better if Intel were able to compete without government subsidies, and maybe they will. But even if they don't it's very unlikely they'll totally crater because of how central this "power" is, and TSMC will never cede full control of their latest tech until the UN recognizes Taiwan as a distinct entity from China (imo).
However, subsidies always come with requirements for companies to fulfill. While it may sound great that Intel is getting billions of dollars in money to build and operate new fabs in the US, those fabs come with massive operating expenses. Unless Intel finds a whole lot of new product to run through those fabs, and soon, the subsidies could end up putting Intel in an even worse financial hole than it is already.
Intel needs to change its internal culture to get back on a path towards success. I don't know if any CEO is capable of fighting and winning that battle within the span of a few years, and time is running out.
Part of what impresses me about TSMC are some of the anecdotes that have trickled out about how they approach process R&D. TSMC runs experiments 24/7 with each team building on the results of the previous shift. This allows it to iterate much faster than many competitors. It is that kind of dedication and drive that Intel needs to push its leading edge manufacturing capabilities back into world class status, but that isn't the kind of change that can be achieved purely by throwing money at the problem.
Intel needs to change its internal culture to get back on a path towards success. I don't know if any CEO is capable of fighting and winning that battle within the span of a few years, and time is running out.
Part of what impresses me about TSMC are some of the anecdotes that have trickled out about how they approach process R&D. TSMC runs experiments 24/7 with each team building on the results of the previous shift. This allows it to iterate much faster than many competitors. It is that kind of dedication and drive that Intel needs to push its leading edge manufacturing capabilities back into world class status, but that isn't the kind of change that can be achieved purely by throwing money at the problem.
The F-35 is actually an extremely affordable 5th generation fighter aircraft.
It is cheaper per unit then some 4th generation aircraft now.
It is cheaper per unit then some 4th generation aircraft now.
Yes, the F-35 costs just $34,000 per flight hour.
That's much cheaper than, say, Pat Gelsinger whose total comp was $86,000 per hour in 2021.
That's much cheaper than, say, Pat Gelsinger whose total comp was $86,000 per hour in 2021.
Not to mention from the US Govt perspective it keeps thousands of people employed in well paying jobs and extends domestic expertise and capabilities.
Well, the current US administration was committed to helping Intel succeed (https://en.wikipedia.org/wiki/CHIPS_and_Science_Act), not so sure about the incoming one. Maybe that also played a part in the decision?
Exactly. It's a "too big to fail" with a touch of "what are you gonna do, let me go bankrupt?" situation.
Too bad Andy Grove is dead.
Intel won't go down after receiving the billions it did for foundries. The USA doesn't burn money. IBM 2.0
Intel won't go down, US lawmakers are determined to prevent that from happening. Any government rescue will however cause Intel shareholders to lose their money. Which is presumably why investors aren't too happy about the current situation.
https://www.tomshardware.com/tech-industry/intel-might-be-to...
https://www.tomshardware.com/tech-industry/intel-might-be-to...
The billions are just a drop in the Intel bucket.
Its on the CEO if he cant convince with a plan to turn the ship around and sell that story.
Not just let of technical experience, but the experience they do have is scary. Gregory Smith, for example, who is "the former CFO and EVP of operations at Boeing. He’s been on the board since 2017 and was an interim CEO at Boeing during 2020...probably be directly involved with the Boeing fiasco."
Someone like that should be facing criminal negligence charges, not sitting on boards.
Someone like that should be facing criminal negligence charges, not sitting on boards.
Truly a comical choice for a board member
It's an indictment of the capitalist system. There's supposed to be oversight that ensure our organizations are run by capable people. But you look at this board (and I'm sure a few others) and it's clear they are not worth the money they are paid. What is anyone even thinking, having a guy from Boeing there?
The board is also too big, and filled with irrelevant people. Four or five specialists who know the area, and one or two financial side people, that's all you need. Too many chefs = nobody's cooking, nobody is responsible.
The board is also too big, and filled with irrelevant people. Four or five specialists who know the area, and one or two financial side people, that's all you need. Too many chefs = nobody's cooking, nobody is responsible.
> It's an indictment of the capitalist system.
Do you have any evidence, that any other system, has demonstrated historical immunity to this problem? Last I checked, the Soviet system put some awfully unqualified people in charge of nuclear plants, and we know how that went. Last I checked, China put some awfully unqualified people in charge of the housing market, and we know how that's going.
The correct response is that unqualified people in positions of power has plagued every social structure. Arguably, alternative systems have failed in this regard to even worse degrees, with far more catastrophic outcomes.
Do you have any evidence, that any other system, has demonstrated historical immunity to this problem? Last I checked, the Soviet system put some awfully unqualified people in charge of nuclear plants, and we know how that went. Last I checked, China put some awfully unqualified people in charge of the housing market, and we know how that's going.
The correct response is that unqualified people in positions of power has plagued every social structure. Arguably, alternative systems have failed in this regard to even worse degrees, with far more catastrophic outcomes.
> Do you have any evidence, that any other system, has demonstrated historical immunity to this problem?
That's not the point though. Our current system seems to not work. If it worked, you would think a tech giant like Intel would be well managed.
That doesn't mean I think we should go the Soviet route, it means the current system needs to be fixed. How to fix it? I'm not too sure, the answer would probably take quite a deep dive into how the stock market works, governance, and so on.
That's not the point though. Our current system seems to not work. If it worked, you would think a tech giant like Intel would be well managed.
That doesn't mean I think we should go the Soviet route, it means the current system needs to be fixed. How to fix it? I'm not too sure, the answer would probably take quite a deep dive into how the stock market works, governance, and so on.
It’s too late. It was too late 18 months ago. Nvidia is over 30x bigger. Qualcomm is 2x, AMD is 2x. Intel needs a world beater, like tomorrow. Qualcomm offered to buy them, no idea what the terms are but he’d have to beat those terms, right? That had to be the death blow.
AMD has already shipped ARM parts in the recentish time frame (Opteron A1100) there are rumors that they have internal arm projects that can be ready quickly. All the other part makers are all in with ARM. Intel is on an island. Throw the customization that MS and AWS are doing, unless they have something magical, tomorrow, it’s just hard to see.
AMD has already shipped ARM parts in the recentish time frame (Opteron A1100) there are rumors that they have internal arm projects that can be ready quickly. All the other part makers are all in with ARM. Intel is on an island. Throw the customization that MS and AWS are doing, unless they have something magical, tomorrow, it’s just hard to see.
> It’s too late. It was too late 18 months ago. Nvidia is over 30x bigger. Qualcomm is 2x, AMD is 2x.
AMD came back from odds much longer than this. At its nadir, AMD's market cap was about a billion. A billion! Jensen's jacket collection is worth more than that.
Anyway, it's not looking good for Intel but it's certainly not "too late".
AMD came back from odds much longer than this. At its nadir, AMD's market cap was about a billion. A billion! Jensen's jacket collection is worth more than that.
Anyway, it's not looking good for Intel but it's certainly not "too late".
If they can dominate with process, no it’s not too late. If their process is on par with TSMC? I don’t know. Like I said, they need a world beater else margins erode dramatically. They have assets, they have value and Intel has done it again and again for decades but unless there is something that is a tier better than anything else margins drop and they just forced their “technical CEO” out.
They have had ultra success in the past, I don’t see anything on the roadmap to suggest a repeat of that, there is a lot of institutional memory of that success. With a long term plan, a board that is knows it’s going to be a journey and the CHIPS money, there is a story, make X86S a reality… I think there will be incredible pressure to cut and sell it though. If the new fabrication technology is only as good as the competition, I think that makes Intel an even more attractive take over target for the fabless giants
They have had ultra success in the past, I don’t see anything on the roadmap to suggest a repeat of that, there is a lot of institutional memory of that success. With a long term plan, a board that is knows it’s going to be a journey and the CHIPS money, there is a story, make X86S a reality… I think there will be incredible pressure to cut and sell it though. If the new fabrication technology is only as good as the competition, I think that makes Intel an even more attractive take over target for the fabless giants
> nadir
Great word, TIL.
Great word, TIL.
> All the other part makers are all in with ARM. Intel is on an island.
Intel also has an ARM architecture license… they sold Marvell the Xscale assets, but retained rights to produce ARM chips should they desire to do so in the future.
https://en.m.wikipedia.org/wiki/XScale
Intel also has an ARM architecture license… they sold Marvell the Xscale assets, but retained rights to produce ARM chips should they desire to do so in the future.
https://en.m.wikipedia.org/wiki/XScale
Sure, but then they're competing with everyone else in a fair fight. Which means either taking a huge hit on margins, or having a product with enough of a performance delta to justify prices somewhere near today's.
The problem isn't so much x64 vs ARM but that, more broadly, high-performance CPUs are becoming commoditised.
The problem isn't so much x64 vs ARM but that, more broadly, high-performance CPUs are becoming commoditised.
Which is why Pat was on the right track imho with foundry. It’s too bad he won’t have the tenure needed to see the outcome of 18a, good or bad.
Even Arm is tenuous at best with risc-v right on its heels.
Even Arm is tenuous at best with risc-v right on its heels.
definitely not too late. plenty of cases in tech where worse comebacks were achieved. amd is a good example mentioned elsewhere in the thread. jobs brought apple back after it was months away from bankruptcy. even Nvidia itself was close to being fucked when its cuda bet was early and wasn't paying off yet -- Jensen talks about this in interviews
> It’s too late.
Hardly.
Intel has fabs and, as we found out from Covid, we don't have capacity in old nodes either. Intel can very much still print money.
Fabless companies are really cool--until shit hits the fan and nobody will run your chips anymore--but, hey, who cares, it's not like that ever happens, right? I mean you'd have to get an enemy invasion or terrorist bombing or tsunami or earthquake or fire in the fab line or global pandemic--and, pfft, how common are those, really?
All it takes is some high-level dumbass trying to curry favor with Pooh Bear over Taiwan and suddenly Nvidia, Qualcomm, Apple, etc. have a net value of zero for the forseeable future.
But, hey, it's super more profitable to not actually have all that icky manufacturing. Ewwwwwww.
Hardly.
Intel has fabs and, as we found out from Covid, we don't have capacity in old nodes either. Intel can very much still print money.
Fabless companies are really cool--until shit hits the fan and nobody will run your chips anymore--but, hey, who cares, it's not like that ever happens, right? I mean you'd have to get an enemy invasion or terrorist bombing or tsunami or earthquake or fire in the fab line or global pandemic--and, pfft, how common are those, really?
All it takes is some high-level dumbass trying to curry favor with Pooh Bear over Taiwan and suddenly Nvidia, Qualcomm, Apple, etc. have a net value of zero for the forseeable future.
But, hey, it's super more profitable to not actually have all that icky manufacturing. Ewwwwwww.
> All it takes is some high-level dumbass trying to curry favor with Pooh Bear over Taiwan
Or just one large earthquake to disrupt production for a few months. I'm sure that TSMC has planed for earthquakes, but they are still highly centralized, where as Intels have their fabs spread out nicely (not all the same node size so if you really need 5nm you might still be in trouble).
Or just one large earthquake to disrupt production for a few months. I'm sure that TSMC has planed for earthquakes, but they are still highly centralized, where as Intels have their fabs spread out nicely (not all the same node size so if you really need 5nm you might still be in trouble).
Maybw centralization is the competetive edge.
Their best people can easily move from fab to fab.
Their best people can easily move from fab to fab.
> suddenly Nvidia, Qualcomm, Apple, etc. have a net value of zero for the forseeable future.
That is an exaggeration. There is still Samsung, Nvidia even fabbed there few years back. It's worse than TSMC, but it's not like Intel is the only alternative.
That is an exaggeration. There is still Samsung, Nvidia even fabbed there few years back. It's worse than TSMC, but it's not like Intel is the only alternative.
Re-engineering a product for a different fab often takes years. And, if TSMC goes dead, nobody, not Samsung or Intel or anybody, would be able to absorb all the volume required, anyway.
Yeah, you are right. Though I am not worried about latest and greatest. We can easily run everything on Sandy Bridge from 2011. It's the other stuff that is underappreciated.
Everything has chips in it. From thermometers through vacuum cleaners, dishwashers, fridges, doorbells. And that is just consumer stuff. The machines that make the goods are full of electronics too. All infrastructure, from water to red lights, medical equipment...
We got a very, very small taste of it for cars in last crisis. And nobody is building fabs for legacy chips... Except China.
Everything has chips in it. From thermometers through vacuum cleaners, dishwashers, fridges, doorbells. And that is just consumer stuff. The machines that make the goods are full of electronics too. All infrastructure, from water to red lights, medical equipment...
We got a very, very small taste of it for cars in last crisis. And nobody is building fabs for legacy chips... Except China.
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Thats a great idea until China and NK launch a coordinated attack on both Taiwan and South Korea
We should definitely be prepared when China attacks USA. Supersonic missiles to the fabs, ASML, Tel facilities too.
Maybe we should make fabs on moon, just as an insurance.
That's not a joke BTW. If China attacks both SK and TW, that's a war with US and this will happen. Fabs in USA will be a very valid military target.
Maybe we should make fabs on moon, just as an insurance.
That's not a joke BTW. If China attacks both SK and TW, that's a war with US and this will happen. Fabs in USA will be a very valid military target.
In a pacific escalation scenario, which I don't think is farfetched in the next decade, the CONUS would still be safe at least short of nuclear exchange.
Samsung is in TX too
Yup. Fabless is also totally dependant on churning out good designs. Intel's current gen chips are fine, compared to AMDs. Not great, not terrible, just competitive.
The reason Intel are worth less is because investors are actually assigning negative value to their fabs - until they see Intel churning out advanced chips again it's just a money pit.
The reason Intel are worth less is because investors are actually assigning negative value to their fabs - until they see Intel churning out advanced chips again it's just a money pit.
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Market cap are by no means an indicator of the future of a company! I bought AMD shares when their market cap was 20x smaller than today and everyone was telling me that AMD didn't stand a single chance vs Intel. I'm pretty sure that you were that guy then.
Isn't there some business cycle where companies reach the 'fattened pig' phase, and then wall street just feeds on it.
Isn't this what that looks like? Nobody is really 'saving' Intel. They are eating it.
Isn't this what that looks like? Nobody is really 'saving' Intel. They are eating it.
Prediction: now that the bean counters taking over is complete, Intel will sell off its hardware branch and turn into a consultancy service like IBM
I don’t see this happening
95-99%+ of their revenue is from hardware
IBM had diversified for decades before evaporating completely
95-99%+ of their revenue is from hardware
IBM had diversified for decades before evaporating completely
With Intel outsourcing more and more fab work, and you have ARM slowly taking over, they’re slowly becoming middlemen architecture design consultants. Going to get worse as the market starts buying less and less of it too
After almost a decade advising on large cap M&A in Wall Street, my biggest takeaway is that activist investors play a fundamental role in capital markets. I think a lot of the hate they get is fabricated by the status quo in PR wars. If I were considering going back to M&A, that gig would be at the top of my list.
I'm honestly surprised we haven't seen activists clamoring for this board to be replaced. Maybe it's too late for Intel and nobody has the stomach and stamina to try to turn it around when there's easier money to be made in a very favorable environment. Or maybe it's too early and an activist is indeed slowly buying up a position but hasn't hit the threshold after which they must disclose their stake.
I'm honestly surprised we haven't seen activists clamoring for this board to be replaced. Maybe it's too late for Intel and nobody has the stomach and stamina to try to turn it around when there's easier money to be made in a very favorable environment. Or maybe it's too early and an activist is indeed slowly buying up a position but hasn't hit the threshold after which they must disclose their stake.
The cycles are so long that I think it's hard for activists to get in, set a new course and exit with a profit.
Having said that the stock is so low at this point something will probably happen. I think private equity taking it private for 5-10 years would let the company work through a long term turn around.
Similar to what's happened with Yahoo. PE could buy it, spin out/sell the most distracting adjacent parts of the business, and then focus the core business over the next five years without needing to publicly deliver quarterly updates.
It would be a massive PE deal, but not outside the realms of possibility, especially if the stock drops a few more percent.
Having said that the stock is so low at this point something will probably happen. I think private equity taking it private for 5-10 years would let the company work through a long term turn around.
Similar to what's happened with Yahoo. PE could buy it, spin out/sell the most distracting adjacent parts of the business, and then focus the core business over the next five years without needing to publicly deliver quarterly updates.
It would be a massive PE deal, but not outside the realms of possibility, especially if the stock drops a few more percent.
I have been a consistent critic of Intel on here.
But a company like Intel can't be spun up/replaced on anything less than even more subsidies and probably 10 years of nondelivery/noncompetitiveness. A chip foundry and chip design of this level takes a long time to reach competence. Hell, if you are 1 generation behind status quo, Intel shows it can take 3 years to catch up, if then.
This company isn't a struggling retailer in a sea of retailers (Sears) or some rando restaurant chain selling potato skins, blooming onions, and nachos (TGIFridays).
This is a top-line chip fabricator, in a geopolitical environment where supply lines/shipping lines are under threat in the Pacific, demographic collapses in China, Japan, and South Korea are underway, and a president that wants to start a tariff war.
National security concerns underline Intels importance. It isn't some chopshop private equity spreadsheet play. If you split it you need functional mission-based companies.
Intel has something like a dozen fabs. I would subdivide those into the lines of business their process nodes can serve, from embedded / industrial stuff, board chipsets, whatever.
Identify the process nodes desperately needed for economic protection from a hostile/collapsing China (same thing basically in economic impact). We need state of the art, so the latest and n-1 fabs get wrapped up, but we likely need a boatload of second and third tier node production as well.
I think Intel's fabs can be split in the n-2 and n-3 nodes into two competing companies, because the US doesn't need monopolies, it needs competition, and that will be the path to far better utilization of subsidies and speeding up production independence from the Asian rim.
I cannot believe Intel has failed at integrated graphics for so long. I'd like a competitor to NVidia besides AMD.
Setting up functional subsidiaries like this will absolutely not happen with private equity chopshops, all run by the same financial illusionists that have crushed Intel and Boeing.
But that's not how the oligarchy works. It'll be something that maximizes concentration of the subsidy check by the same incompetents that "manage" Intel right now, and the subsidy will be squandered.
I cannot believe a Boeing fuckhead is now the interim CEO. Nothing will go well, these people are survivalist lizards that care about their careers and stock options and parachutes. That Boeing guy likely engineered the ousting, he's a slimy survivor of corporate Machiavellianism.
I invite him to prove me wrong, the country needs it.
But a company like Intel can't be spun up/replaced on anything less than even more subsidies and probably 10 years of nondelivery/noncompetitiveness. A chip foundry and chip design of this level takes a long time to reach competence. Hell, if you are 1 generation behind status quo, Intel shows it can take 3 years to catch up, if then.
This company isn't a struggling retailer in a sea of retailers (Sears) or some rando restaurant chain selling potato skins, blooming onions, and nachos (TGIFridays).
This is a top-line chip fabricator, in a geopolitical environment where supply lines/shipping lines are under threat in the Pacific, demographic collapses in China, Japan, and South Korea are underway, and a president that wants to start a tariff war.
National security concerns underline Intels importance. It isn't some chopshop private equity spreadsheet play. If you split it you need functional mission-based companies.
Intel has something like a dozen fabs. I would subdivide those into the lines of business their process nodes can serve, from embedded / industrial stuff, board chipsets, whatever.
Identify the process nodes desperately needed for economic protection from a hostile/collapsing China (same thing basically in economic impact). We need state of the art, so the latest and n-1 fabs get wrapped up, but we likely need a boatload of second and third tier node production as well.
I think Intel's fabs can be split in the n-2 and n-3 nodes into two competing companies, because the US doesn't need monopolies, it needs competition, and that will be the path to far better utilization of subsidies and speeding up production independence from the Asian rim.
I cannot believe Intel has failed at integrated graphics for so long. I'd like a competitor to NVidia besides AMD.
Setting up functional subsidiaries like this will absolutely not happen with private equity chopshops, all run by the same financial illusionists that have crushed Intel and Boeing.
But that's not how the oligarchy works. It'll be something that maximizes concentration of the subsidy check by the same incompetents that "manage" Intel right now, and the subsidy will be squandered.
I cannot believe a Boeing fuckhead is now the interim CEO. Nothing will go well, these people are survivalist lizards that care about their careers and stock options and parachutes. That Boeing guy likely engineered the ousting, he's a slimy survivor of corporate Machiavellianism.
I invite him to prove me wrong, the country needs it.
I feel like Intel was ahead for a very long time and perhaps intentionally coasting and then suddenly in the span of a few years they went from barely any competition to losing best in class in compute to three separate competitors. AMD having great consumer processors and now beating in sales in data centers, Apple having without a doubt the best consumer processor, NVIDIA completely owning the machine learning compute market which is now enormous.
I think beat case is NVIDIA buys Intel and spins off some of the less mainline business units.
In dire straights I don’t think the government would allow Intel to fall to vultures and instead would compel them to continue operating at any loss rate and then if they failed to avoid bankruptcy nationalize them in much the same way as AIG or General Motors for long term reorganization.
I think beat case is NVIDIA buys Intel and spins off some of the less mainline business units.
In dire straights I don’t think the government would allow Intel to fall to vultures and instead would compel them to continue operating at any loss rate and then if they failed to avoid bankruptcy nationalize them in much the same way as AIG or General Motors for long term reorganization.
Literally all that happened is Intel lost the fab lead and then lost fab parity. Their CPUs were, and are, still competitive with AMD chips, or at least close enough that they can just adjust prices to make up the difference.
Fabs are extremely expensive, and an uncompetitive fab is literally just a pit in which you toss money. That's Intel's current problem.
Fabs are extremely expensive, and an uncompetitive fab is literally just a pit in which you toss money. That's Intel's current problem.
> uncompetitive fab
To be clear, do you any inside information / career experience that you know that existing Intel fabs are losing money? I have not read any such reports in media.
As a counterpoint, Europe and Japan are no longer cutting edge in their fabs, but continue to produce many ICs for industry.
Intel's financial reports show their fabs losing billions every quarter.
Nevertheless, it is hard to know how real are these numbers, because the prices charged by the Intel fabs for making Intel CPUs are set internally, so they could be manipulated to move all losses on the fabs from the consumer and server product divisions.
Moreover, for the latest Intel fabrication process for which anything is known, i.e. Intel 4, which is used for making the CPU tiles in the Meteor Lake CPUs, it is known that the fabrication yields have been much less than desirable, which had two outcomes, both less profit margins when selling Meteor Lake and the inability to produce as many Meteor Lake CPUs as they could have sold. Both effects have increased the financial losses suffered by Intel during 2024.
In general, "uncompetitive fab" can mean two things. Either there are things that the fab cannot do at all or the fab has too low fabrication yields at the things that it can do.
The Intel fabs are in the second situation. They can do about the same things that TSMC can do, but at much lower fabrication yields, which means much higher production costs. High production costs means low profits and Intel is a company that has been habituated to have huge profits, so it cannot manage well the case when its profit margins are very thin.
Nevertheless, it is hard to know how real are these numbers, because the prices charged by the Intel fabs for making Intel CPUs are set internally, so they could be manipulated to move all losses on the fabs from the consumer and server product divisions.
Moreover, for the latest Intel fabrication process for which anything is known, i.e. Intel 4, which is used for making the CPU tiles in the Meteor Lake CPUs, it is known that the fabrication yields have been much less than desirable, which had two outcomes, both less profit margins when selling Meteor Lake and the inability to produce as many Meteor Lake CPUs as they could have sold. Both effects have increased the financial losses suffered by Intel during 2024.
In general, "uncompetitive fab" can mean two things. Either there are things that the fab cannot do at all or the fab has too low fabrication yields at the things that it can do.
The Intel fabs are in the second situation. They can do about the same things that TSMC can do, but at much lower fabrication yields, which means much higher production costs. High production costs means low profits and Intel is a company that has been habituated to have huge profits, so it cannot manage well the case when its profit margins are very thin.
But is this an issue of them only building their own chips?
(Speaking of which, what does Intel do with old fabs for the past 20 years after moving to a new node?)
(Speaking of which, what does Intel do with old fabs for the past 20 years after moving to a new node?)
The lower yields than TSMC would also cause lower profits when making chips for external customers, so Intel must really improve their yields.
Old Intel fabs are refurbished, by installing modern equipment, so they are converted from old CMOS fabrication processes to recent processes.
Before being converted, the fabs spend a few years making peripheral chips that complement the Intel CPUs, e.g. the so-called south-bridge, which may be packaged together with the CPU for laptops or it may be a separate IC package for desktops, and which does not need a fabrication process as dense as the CPUs.
Old Intel fabs are refurbished, by installing modern equipment, so they are converted from old CMOS fabrication processes to recent processes.
Before being converted, the fabs spend a few years making peripheral chips that complement the Intel CPUs, e.g. the so-called south-bridge, which may be packaged together with the CPU for laptops or it may be a separate IC package for desktops, and which does not need a fabrication process as dense as the CPUs.
> Only a tiny fraction of ICs need the latest transistor sizes.
The problem is that the latest transistor sizes are the ones that have profit margins. 90% of TSMCs chips aren't on EUV processes, but 50% of their profits come from EUV. If you don't have leading (or close to leading) processes, you're completely shut out of the phone, laptop, server, and GPU market. Intel could survive like that, but it would involve laying off ~90% of their staff and exiting all of their major markets.
The problem is that the latest transistor sizes are the ones that have profit margins. 90% of TSMCs chips aren't on EUV processes, but 50% of their profits come from EUV. If you don't have leading (or close to leading) processes, you're completely shut out of the phone, laptop, server, and GPU market. Intel could survive like that, but it would involve laying off ~90% of their staff and exiting all of their major markets.
I would politely argue against the word “collapse”. It’s overly dramatic. It makes no sense when talking about societies. Peter Zeihan uses the word a lot but that doesn’t mean it’s correct. Peter just knows that fear sells. But what does it mean for a society to collapse? One day all is fine and the next day it is not? “Downward spiral” seems more appropriate.
When a bridge collapses it doesn’t happen in one go - first a couple of bits are rusty, some foundations are crumbling and not tended to. Then a couple of supports fall off but it’s fine because it’s summer. Then winter comes with the extra load than entails, snow, rain.
It’s fine, the bridge remains up but now one of the remaining supports is working back and forth every time a car goes over it. One day a heavy truck goes over it.
One day the collapse is apparent to us all, and complete. But it began long ago when maintenance was neglected.
Society is like that.
It’s fine, the bridge remains up but now one of the remaining supports is working back and forth every time a car goes over it. One day a heavy truck goes over it.
One day the collapse is apparent to us all, and complete. But it began long ago when maintenance was neglected.
Society is like that.
> One day the collapse is apparent to us all, and complete.
This only happens in historical retrospect. The sacking of Rome in 476 theoretically marked the collapse of The Roman Empire in Western Europe but nonetheless people all over Europe continued to live in a Roman style and think of themselves as citizens of the Roman Empire for a very long time.
We won't know when our society has collapsed. Our grand children may.
This only happens in historical retrospect. The sacking of Rome in 476 theoretically marked the collapse of The Roman Empire in Western Europe but nonetheless people all over Europe continued to live in a Roman style and think of themselves as citizens of the Roman Empire for a very long time.
We won't know when our society has collapsed. Our grand children may.
I generally agree, however a counterpoint is that modern technology has made the world smaller and consequences arrive faster. No longer does news travel at the speed of a mule drawn cart, now it happens at a significant fraction of the speed of light.
The analogy to Rome is inapt.
We're highly dependent on external capital, technologies, materials, and resources -- not to mention goodwill enabling trade and avoiding social chaos. All of these can and do change in a matter of months, and the speed of the collapse can be amplified by smart individuals making self-interested decisions, and even more by bad actors working in concert for strategic reasons.
We're highly dependent on external capital, technologies, materials, and resources -- not to mention goodwill enabling trade and avoiding social chaos. All of these can and do change in a matter of months, and the speed of the collapse can be amplified by smart individuals making self-interested decisions, and even more by bad actors working in concert for strategic reasons.
This. Dependence on technology and outsourcing of basic survival needs (like food, medicine etc), has fragilized our civilization to the point that collapse would have an exponential rate.
Could you give a clear example from history? Usually it isn’t clear. For example, historians are still not in agreement about when the Roman empire ended [1].
[1]: https://www.thoughtco.com/fall-of-rome-short-timeline-121196
[1]: https://www.thoughtco.com/fall-of-rome-short-timeline-121196
The activist playbook isn't limited to chopping up shops or any subset of the PE playbook.
Intel stock is likely so undervalued right now that an activist can just come in, throw a fight deck at the board, show to the market that they will put _some_ better board in charge (shouldn't be too hard), get the votes they need, replace the board (partially), see the stock rally (pick a number) 20% on improved sentiment and expectations, gradually unwind the position and move on.
Intel stock is likely so undervalued right now that an activist can just come in, throw a fight deck at the board, show to the market that they will put _some_ better board in charge (shouldn't be too hard), get the votes they need, replace the board (partially), see the stock rally (pick a number) 20% on improved sentiment and expectations, gradually unwind the position and move on.
Collapsing China? I read this is as a big no clue rant.
China has four brewing issues:
Demographic cliff on a scale not seen: yes Japan is going through one now, but China's is simply unprecedented in the sheer numbers
Authoritarianism: China is rolling back free market reforms, centralizing power under Xi
Finance: China has a real estate and debt bubble at the regional government level.
War and aggression: China US relations are approaching cold war levels and a Taiwan invasion seems likely. Four years of trade war is imminent.
Depending how it plays out, any one of these is trouble for offshore manufacturing in China. I suppose collapse is a strong word, but it is stupid to rely on Chinese production both for a company and in terms of national security.
Zeigan has been singing this tune for a decade, but recently there are many other geopolitical talks I've seen repeating each or all of the four issues I've listed above, and the demographics aspect is inevitable at a minimum.
Demographic cliff on a scale not seen: yes Japan is going through one now, but China's is simply unprecedented in the sheer numbers
Authoritarianism: China is rolling back free market reforms, centralizing power under Xi
Finance: China has a real estate and debt bubble at the regional government level.
War and aggression: China US relations are approaching cold war levels and a Taiwan invasion seems likely. Four years of trade war is imminent.
Depending how it plays out, any one of these is trouble for offshore manufacturing in China. I suppose collapse is a strong word, but it is stupid to rely on Chinese production both for a company and in terms of national security.
Zeigan has been singing this tune for a decade, but recently there are many other geopolitical talks I've seen repeating each or all of the four issues I've listed above, and the demographics aspect is inevitable at a minimum.
The "China collapse" claim is indeed not new, and it is as wrong as ever.
The demographic situation is manageable, especially given how the generation entering retirement are factory workers, who are being replaced by automation on a massive scale. The generation which enters the labor market has a much higher number of college degrees.
Real estate bubble doesn't concern most Chinese citizens, but only those who used it to speculate, despite being warned by Xi not to[1]. If you own a house for living inside, you don't need to care if its resale value goes up or down. Still, deflating the housing bubble was painful, but China managed to grow the economy through this anyway.
About war, I don't think so, at least not in the next 4 years. Trump and several Republican leaders made it clear already that they don't want to defend Taiwan, so the Taiwanese government will likely refrain from things which could trigger armed conflict. Even if things escalated, a naval blockade would be more likely, and the US public largely doesn't support entering into direct conflict over that[2].
[1] https://www.scmp.com/business/article/2116621/what-president...
[2] https://globalaffairs.org/research/public-opinion-survey/tai...
The demographic situation is manageable, especially given how the generation entering retirement are factory workers, who are being replaced by automation on a massive scale. The generation which enters the labor market has a much higher number of college degrees.
Real estate bubble doesn't concern most Chinese citizens, but only those who used it to speculate, despite being warned by Xi not to[1]. If you own a house for living inside, you don't need to care if its resale value goes up or down. Still, deflating the housing bubble was painful, but China managed to grow the economy through this anyway.
About war, I don't think so, at least not in the next 4 years. Trump and several Republican leaders made it clear already that they don't want to defend Taiwan, so the Taiwanese government will likely refrain from things which could trigger armed conflict. Even if things escalated, a naval blockade would be more likely, and the US public largely doesn't support entering into direct conflict over that[2].
[1] https://www.scmp.com/business/article/2116621/what-president...
[2] https://globalaffairs.org/research/public-opinion-survey/tai...
> Still, deflating the housing bubble was painful, but China managed to grow the economy through this anyway.
China hasn't deflated its housing bubble yet. Yes, real estate turn over has basically ground to a standstill, but that doesn't mean many have been forced to take a loss yet. The reckoning still hasn't come, and should look something like a larger Japan property bubble pop when it happens.
Still, the US is screwed since China is basically going to own automation via its current investments (along with investments in EVs, green energy, and HSR). If they can figure out their chip and jet turbine problems (still not solved, they can't make fast chips economically yet, or even expensive ones without western equipment), they have everything in the bag, so to speak.
China hasn't deflated its housing bubble yet. Yes, real estate turn over has basically ground to a standstill, but that doesn't mean many have been forced to take a loss yet. The reckoning still hasn't come, and should look something like a larger Japan property bubble pop when it happens.
Still, the US is screwed since China is basically going to own automation via its current investments (along with investments in EVs, green energy, and HSR). If they can figure out their chip and jet turbine problems (still not solved, they can't make fast chips economically yet, or even expensive ones without western equipment), they have everything in the bag, so to speak.
> The reckoning still hasn't come, and should look something like a larger Japan property bubble pop when it happens
While there are still risks for the economy from real estate, I think China has shown the ability to manage them. For one, they were able to slow-walk the Evergrande collapse and move developments to state-owned companies. If it should become necessary again they will repeat the process.
Besides that, new Hukou regulations are planned to encourage rural migrants to move to urban areas with housing oversupply.
> they can figure out their chip and jet turbine problems (still not solved, they can't make fast chips economically yet, or even expensive ones without western equipment)
China can produce 65nm chipmaking gear domestically which is like 20 years behind the West. Even if they develop at twice the speed, this means in 10 years they will be where the West is today.
The question is rather, can the West keep the rate of progress? ASML has already warned that lost business from sanctions will impact their ability to invest in R&D.
While there are still risks for the economy from real estate, I think China has shown the ability to manage them. For one, they were able to slow-walk the Evergrande collapse and move developments to state-owned companies. If it should become necessary again they will repeat the process.
Besides that, new Hukou regulations are planned to encourage rural migrants to move to urban areas with housing oversupply.
> they can figure out their chip and jet turbine problems (still not solved, they can't make fast chips economically yet, or even expensive ones without western equipment)
China can produce 65nm chipmaking gear domestically which is like 20 years behind the West. Even if they develop at twice the speed, this means in 10 years they will be where the West is today.
The question is rather, can the West keep the rate of progress? ASML has already warned that lost business from sanctions will impact their ability to invest in R&D.
Rural migrants can’t afford $1 million for a one bedroom flat in Shanghai or Beijing, or a $2-300k one bedroom in a tier 88 city. This bubble is going to pop, and real estate in China will stabilize to more affordable Japanese housing prices (well, that’s my prediction).
Just letting the real estate companies fail isn’t going to much, everyone knew Evergrande was doomed back in 2012 when that trader in HK was banned for shorting it.
Just letting the real estate companies fail isn’t going to much, everyone knew Evergrande was doomed back in 2012 when that trader in HK was banned for shorting it.
China's demographics are beginning to look bad and their sclerotic economy is brewing for civil unrest
Many many unrest cases showed, that with proper oppression methods the country can go for decades afterwards. Gulags and closed psychiatric clinics were full of unstable elements trying to destabilize countries. And that was possible without modern observation methods.
you know that The United States leads the world in total number of people incarcerated, right? the consumerist Gulag isn't less gulag than the soviet one.
[deleted]
It actually is
> because the US doesn't need monopolies
They seem to love them very much, though. (Microsoft, Google, Apple, Facebook)
They seem to love them very much, though. (Microsoft, Google, Apple, Facebook)
Uhhh… most of the companies you listed compete with eachother?
Making it an oligopoly... Not much better
That's a very romantic way to describe a corporation that was sucked dry by greedy men in suits.
>a company like Intel can't be spun up/replaced on anything less than even more subsidies and probably 10 years of nondelivery/noncompetitiveness.
As a taxpayer I sincerely couldn't care less, I'm fucking tired of seeing my tax dollars wasted on bailouts and subsidies for nothing. If we absolutely must use tax dollars on Intel at this point, I have a hardline requirement: Nationalize them. I want fucking tangible assets, things of fucking value for my tax dollars spent. I want them to become Public Property if they want to spend Public Money. I want them answering to the accountability of the Constitution and the electorate for wanting my tax dollars so desperately.
>This is a top-line chip fabricator,
No, they are not. If they were, none of us would be having this conversation.
>National security concerns underline Intels importance.
No, it is not. Not when we (Intel) are already defeated and the battle decided. Not when allies (South Korea, Israel, Germany/EU, et al.) have actual top-line silicon production. Also see next.
>Identify the process nodes desperately needed for economic protection ... We need state of the art,
No, we do not. Most of the country, let alone the world, still runs on 50+ year old silicon technology. Not even the military uses "state of the art" silicon, they're almost always at least 10 to 20 years back from the bleeding edge if not more.
As for the silicon we all actually need and use? We can produce plenty of them. See: Texas Instruments (includes former National Semiconductor), Analog Devices, Onsemi (includes former Fairchild Semiconductor), and more.
No, we do not need Intel for national security, nor even economic prosperity for that matter. The American semiconductor industry is much more massive than Nvidia, AMD, and Intel.
>I cannot believe Intel has failed at integrated graphics for so long.
Intel's iGPUs have been and are the best iGPUs on the market. They almost always work everywhere everytime for all practical purposes. It's their discrete GPUs which have been and always were disappointing, I'm not holding my breath that Battlemage can defy history.
As a taxpayer I sincerely couldn't care less, I'm fucking tired of seeing my tax dollars wasted on bailouts and subsidies for nothing. If we absolutely must use tax dollars on Intel at this point, I have a hardline requirement: Nationalize them. I want fucking tangible assets, things of fucking value for my tax dollars spent. I want them to become Public Property if they want to spend Public Money. I want them answering to the accountability of the Constitution and the electorate for wanting my tax dollars so desperately.
>This is a top-line chip fabricator,
No, they are not. If they were, none of us would be having this conversation.
>National security concerns underline Intels importance.
No, it is not. Not when we (Intel) are already defeated and the battle decided. Not when allies (South Korea, Israel, Germany/EU, et al.) have actual top-line silicon production. Also see next.
>Identify the process nodes desperately needed for economic protection ... We need state of the art,
No, we do not. Most of the country, let alone the world, still runs on 50+ year old silicon technology. Not even the military uses "state of the art" silicon, they're almost always at least 10 to 20 years back from the bleeding edge if not more.
As for the silicon we all actually need and use? We can produce plenty of them. See: Texas Instruments (includes former National Semiconductor), Analog Devices, Onsemi (includes former Fairchild Semiconductor), and more.
No, we do not need Intel for national security, nor even economic prosperity for that matter. The American semiconductor industry is much more massive than Nvidia, AMD, and Intel.
>I cannot believe Intel has failed at integrated graphics for so long.
Intel's iGPUs have been and are the best iGPUs on the market. They almost always work everywhere everytime for all practical purposes. It's their discrete GPUs which have been and always were disappointing, I'm not holding my breath that Battlemage can defy history.
There’s an implicit assumption in the article that, because Gelsinger was technically competent, he was going to be a great CEO of given enough time.
Personally, I’ve heard nothing but bad things from Intel during Gelsinger’s tenure. He had some lofty ideas, but he clearly wasn’t executing well with Intel’s bread and butter business.
Also, I’m not sure good engineers always make good managers. Management is all about delegation. The skillset is really about identifying talent and trusting them to do things competently so you don’t have to worry about the details. That’s pretty much the antithesis of engineering, where you like thinking through the specific details of how things will work. And of course, engineering is only one part of brining products to market.
Personally, I’ve heard nothing but bad things from Intel during Gelsinger’s tenure. He had some lofty ideas, but he clearly wasn’t executing well with Intel’s bread and butter business.
Also, I’m not sure good engineers always make good managers. Management is all about delegation. The skillset is really about identifying talent and trusting them to do things competently so you don’t have to worry about the details. That’s pretty much the antithesis of engineering, where you like thinking through the specific details of how things will work. And of course, engineering is only one part of brining products to market.
I don't think the article did assume that. If you read between the lines the writer might well believe Intel is beyond saving no matter what Gelsinger does. Zero in on:
> The CEOs who got Intel into this mess were much longer than Pat and a worse fit. Meanwhile, the board let most of his predecessor’s activities go unchecked as they sped through disaster.
That really captures the spirit of the article. It is pointing out that the people ultimately responsible for getting Intel into a mess are still in charge and have started to flail. That doesn't mean the writer thinks Gelsinger was going to be a great CEO because he is technical. They think that the board is terrible and there is evidence that it hasn't changed.
This behaviour by the board would be a common enough pattern in both business and political failures. Something goes wrong, the people in charge don't admit they made mistakes (or everyone just assumes it is too late to recover) and retain power.
> The CEOs who got Intel into this mess were much longer than Pat and a worse fit. Meanwhile, the board let most of his predecessor’s activities go unchecked as they sped through disaster.
That really captures the spirit of the article. It is pointing out that the people ultimately responsible for getting Intel into a mess are still in charge and have started to flail. That doesn't mean the writer thinks Gelsinger was going to be a great CEO because he is technical. They think that the board is terrible and there is evidence that it hasn't changed.
This behaviour by the board would be a common enough pattern in both business and political failures. Something goes wrong, the people in charge don't admit they made mistakes (or everyone just assumes it is too late to recover) and retain power.
The article focuses on the boards alleged ineptitude, not about Gelsinger directly, but the article directly states that Gelsinger was the best possible candidate:
> But the reality is he’s the single best candidate for the company.
However, directly before this, the author offers this:
> Meanwhile, Pat wanted to pursue the big, bold IFS bet, with 100s of thousands of wafers, when the reality is just getting 10s of thousands of wafers is a massive problem as is.
This sounds oddly reminiscent of people I've worked with in the past. They have grand, pie-in-the-sky visions of what something should be, but don't know how to quickly and efficiently take the steps to get there.
> But the reality is he’s the single best candidate for the company.
However, directly before this, the author offers this:
> Meanwhile, Pat wanted to pursue the big, bold IFS bet, with 100s of thousands of wafers, when the reality is just getting 10s of thousands of wafers is a massive problem as is.
This sounds oddly reminiscent of people I've worked with in the past. They have grand, pie-in-the-sky visions of what something should be, but don't know how to quickly and efficiently take the steps to get there.
There's a strong case to be made that Intel CEO is the worst job in tech, and also the most complex, and it also has mediocre upside. Which prompts the question: Is there someone better than Pat Gelsinger who actually wants that job?
$50m yearly salary is limited upside? interesting take
> $50m yearly salary is limited upside? interesting take
OK. Rule of thumb. Any sensationalist headline about CEO making $N dollars is always wrong.
The real details are in the Proxy statement they are now required to file. As an example, when Pat signed on, his compensation package was worth over $160m. How much did he actually get? $10M. Why? Because the rest of the package was contingent on high share prices (I think $80 was the lowest target). He got none of it.
And the punchline: His total payout during his whole tenure is $46-49M. That's over almost 4 years. And includes his sign on bonus and severance bonus.
So yes, your claim of $50m yearly salary is ludicrous.
https://finance.yahoo.com/news/pat-gelsinger-lost-massive-14...
OK. Rule of thumb. Any sensationalist headline about CEO making $N dollars is always wrong.
The real details are in the Proxy statement they are now required to file. As an example, when Pat signed on, his compensation package was worth over $160m. How much did he actually get? $10M. Why? Because the rest of the package was contingent on high share prices (I think $80 was the lowest target). He got none of it.
And the punchline: His total payout during his whole tenure is $46-49M. That's over almost 4 years. And includes his sign on bonus and severance bonus.
So yes, your claim of $50m yearly salary is ludicrous.
https://finance.yahoo.com/news/pat-gelsinger-lost-massive-14...
Incredible that they set his performance targets on stock price and not on market share and technological superiority.
Priorities and incentives matter
Priorities and incentives matter
That’s a lot of money to you and me, but we’re not in the running for a CEO position at Intel. For the people who might be, I wouldn’t be surprised if that’s peanuts.
It's also, weirdly, not going to make a lot of difference to the person earning it.
If you're next in line to that, you can already afford literally everything. Or stop working tomorrow and still afford _almost_ everything.
So it's about whether or not it's a good job to work in, and one that will enhance your reputation and status.
If you're next in line to that, you can already afford literally everything. Or stop working tomorrow and still afford _almost_ everything.
So it's about whether or not it's a good job to work in, and one that will enhance your reputation and status.
IIRC 10 year old report states 100 million usd net worth is enough to buy whatever you want.
Depends on your appetite of course. But I think it's safe to say that if you're not satisfied at $10m net worth, you're never going to be, and you'll just keep on chasing til circumstances force you to stop.
50M in salary is actually quite high. The S&P 500 average is less than 20M. I’ve seen companies half the size of Intel pay their CEOs ~11M.
It is high. And it is wrong. See details here:
https://news.ycombinator.com/item?id=42341514
https://news.ycombinator.com/item?id=42341514
When you can get fired by the board within 6 months, it matters. This could be a death blow gig for a competent career CEO.
>Also, I’m not sure good engineers always make good managers.
I worked at Intel when Craig Barrett was CEO. He was also a former engineer, and he was a terrible CEO. Intel got involved in a bunch of stupid stuff during his tenure, like the P4 Netburst architecture, the RAMBUS fiasco, and lots of side businesses that didn't pan out. Otellini took over and fixed things by going to the Core architecture, IIRC.
I'd say that good engineers becoming good managers (esp. upper managers) is the exception, not the rule.
I worked at Intel when Craig Barrett was CEO. He was also a former engineer, and he was a terrible CEO. Intel got involved in a bunch of stupid stuff during his tenure, like the P4 Netburst architecture, the RAMBUS fiasco, and lots of side businesses that didn't pan out. Otellini took over and fixed things by going to the Core architecture, IIRC.
I'd say that good engineers becoming good managers (esp. upper managers) is the exception, not the rule.
> I'd say that good engineers becoming good managers (esp. upper managers) is the exception, not the rule.
Good managers are exceptions, period. Still, good engineers are leaps and bounds more likely to be effective as managers, even if they make managerial mistakes. This is probably even more true for high level executives than line managers.
There's a common bigco school of thought that does not say this explicitly, but believes "nerds are bad managers," so if you are good at engineering you're less likely to be good at management, so let's go hire pro managers (that end up being schmoozers and less technical). In my experience, the less technical managers have been bozos AND bad at management.
Good managers are exceptions, period. Still, good engineers are leaps and bounds more likely to be effective as managers, even if they make managerial mistakes. This is probably even more true for high level executives than line managers.
There's a common bigco school of thought that does not say this explicitly, but believes "nerds are bad managers," so if you are good at engineering you're less likely to be good at management, so let's go hire pro managers (that end up being schmoozers and less technical). In my experience, the less technical managers have been bozos AND bad at management.
Technical founder sold a company (where I currently work) to a big corp. Big corp sends here regularly directors with MBA to fix things, but things are worse and worse every year. People ask me why I joined a company in free fall every week. The thing is that technical understanding of MBAs is close to zero. Result will not improve throwing away 15% of the employees (the guy before current director did this). It’s obvious to me as an engineer with experience in operations - the products are not designed for easy production and manual testing takes too long and has bad error coverage. I have experience to fix obvious technical problems. No MBA will see them in first place. No MBA with their arrogance will listen to an engineer. Let’s wait for recession to end and look for new jobs.
Talk to your manager manager. Talk in manager's language. Be rich. :-/
It's a very common business school line of thought that managers are always smarter than the people they manage. Employees are seen as "resources", not as talents.
So by definition nerds (and other non-business school people) cannot be as good.
So by definition nerds (and other non-business school people) cannot be as good.
I had a conversation today about that topic sorta. I find the abstract tradeoffs of writing software (ie. efficiency vs flexibility) to be inherent to company social structures as well. I suspect the intuition that engineers build up of knowing when to favor either side is applicable, just with different error signals.
There are a lot of similarities between software and organizations.
But being a CEO also requires people skills. Many of us software folks have good intuition about how to make technical projects successful but the way to get there often involves getting other people to cooperate. AKA leadership. That's the tough one.
That said I agree that a CEO of a company like Intel has to be technical. I mean we saw what happened to Apple when the CEO came from Pepsi. But you need someone technical, in the domain, who is also a strong leader and a visionary and those people are not that common.
That said I agree that a CEO of a company like Intel has to be technical. I mean we saw what happened to Apple when the CEO came from Pepsi. But you need someone technical, in the domain, who is also a strong leader and a visionary and those people are not that common.
Reminds me a lot of Conway's Law: https://en.wikipedia.org/wiki/Conway%27s_law
> the less technical managers have been bozos AND bad at management
The golden combo.
The golden combo.
The difference between immediate pre-P4 and now Intel problems is stark though.
Immediately pre-P4, Intel need a better architecture than K6-* or AMD-next (revealed as Athlon). That's not a process problem.
Now, Intel needs their leading node to work. That's a process problem.
Arguably, none of Intel's business model works if their process is substantially behind TSMC.
Consequently, the CEO and board should be 100% focused on returning to process parity.
Gelsinger at least had an economically viable plan for that. Without him? No strategic plan: the board sure as shit isn't going to come up with one.
Immediately pre-P4, Intel need a better architecture than K6-* or AMD-next (revealed as Athlon). That's not a process problem.
Now, Intel needs their leading node to work. That's a process problem.
Arguably, none of Intel's business model works if their process is substantially behind TSMC.
Consequently, the CEO and board should be 100% focused on returning to process parity.
Gelsinger at least had an economically viable plan for that. Without him? No strategic plan: the board sure as shit isn't going to come up with one.
Intel historically was the best at semiconductor manufacturing processes. That's what got it where it got to.
I bought some Intel shares when it crashed last time but the latest events are changing my mind on the prospects of this company. Intel getting to be the best at process happened over years or decades of people and culture. If that's gone there's no way to reproduce it. Looking from the outside it looks like through offshoring, layoffs and culture issues they've basically lost what they had.
I think AMD managed to make it through tough times (and Intel way back then as well) because even when the company was struggling financially it managed to maintain people and culture that enabled it to overcome the challenges. But now the times have changed and executives don't see people or culture as leverage, and are happy to get rid of those. You better not need any amazing execution from that point on.
I bought some Intel shares when it crashed last time but the latest events are changing my mind on the prospects of this company. Intel getting to be the best at process happened over years or decades of people and culture. If that's gone there's no way to reproduce it. Looking from the outside it looks like through offshoring, layoffs and culture issues they've basically lost what they had.
I think AMD managed to make it through tough times (and Intel way back then as well) because even when the company was struggling financially it managed to maintain people and culture that enabled it to overcome the challenges. But now the times have changed and executives don't see people or culture as leverage, and are happy to get rid of those. You better not need any amazing execution from that point on.
> Intel historically was the best at semiconductor manufacturing processes. That's what got it where it got to.
Exactly. AMD has been executing perfectly on the CPU side, but they also happened to be a key beneficiary in an unprecedented event in the past few decades: TSMC overtaking Intel in their process which would likely not have happened without Apple betting on them.
Intel did not benefit from the stagnation they had which was enabled by their success and monopoly. Internet Explorer 6-level stagnation: from Haswell to ~2018 they successfully shipped the same product over and over again and when AMD pressure started to mount, they basically trickled down higher core counts into cheaper SKUs. It would have worked, except at the highest end, they needed the process to be competitive and it wasn't, which messed up everything.
Exactly. AMD has been executing perfectly on the CPU side, but they also happened to be a key beneficiary in an unprecedented event in the past few decades: TSMC overtaking Intel in their process which would likely not have happened without Apple betting on them.
Intel did not benefit from the stagnation they had which was enabled by their success and monopoly. Internet Explorer 6-level stagnation: from Haswell to ~2018 they successfully shipped the same product over and over again and when AMD pressure started to mount, they basically trickled down higher core counts into cheaper SKUs. It would have worked, except at the highest end, they needed the process to be competitive and it wasn't, which messed up everything.
It’s not just a process problem. Unless you are on windows or playing steam games on linux, there is zero reason to prefer x86.
Those markets add to way less than 50% of consumer market share. X86 is rapidly declining in cloud too.
It reminds me of sun, dec and hp fighting to have the best commercial unix OS in the late 1990’s. Even if you win, you loose.
Those markets add to way less than 50% of consumer market share. X86 is rapidly declining in cloud too.
It reminds me of sun, dec and hp fighting to have the best commercial unix OS in the late 1990’s. Even if you win, you loose.
Besides Windows or gaming, there is another market for x86.
If you are interested in technical and scientific computing, but you cannot afford to spend amounts of $ written with 6 digits or much more, then x86 is the only solution.
The only Arm-based CPUs with decent performance are those made by Fujitsu, which are not available at retail.
The "datacenter" GPUs from AMD and NVIDIA are much too expensive for small businesses or individuals. Even for a bigger business their price is justifiable only when they are busy close to 24/7.
So for most people only the x86 CPUs provide an acceptable performance for computations that use either FP64 numbers or large integers.
If you are interested in technical and scientific computing, but you cannot afford to spend amounts of $ written with 6 digits or much more, then x86 is the only solution.
The only Arm-based CPUs with decent performance are those made by Fujitsu, which are not available at retail.
The "datacenter" GPUs from AMD and NVIDIA are much too expensive for small businesses or individuals. Even for a bigger business their price is justifiable only when they are busy close to 24/7.
So for most people only the x86 CPUs provide an acceptable performance for computations that use either FP64 numbers or large integers.
Things are changing on that front, too: https://www.servethehome.com/supermicro-megadc-ars-211m-nr-r...
The Ampere CPUs may be great for something like Web servers, but they are pathetic at number crunching. The same is true for the CPU cores designed by Arm, which are used in the server CPUs of other cloud vendors.
The only way you can get close to x86 being "less than 50% of the consumer market" is by including phones, but I'd argue that's a new market on top of the "consumer computing" market. And even then, in "unit count" rather than revenue.
>Unless you are on windows or playing steam games on linux, there is zero reason to prefer x86.
This is completely false, unless you're just speaking theoretically. In the real world of 2024, there's no real alternative to x86 for general PC computing, even if you're running Linux. Where are the laptops with ARM CPUs? (No, Macs don't count; can't easily run Linux on those plus they have a huge price penalty.) Where are the consumer-grade ATX motherboard + CPU combos for building desktop PCs? None of this stuff exists, at this time.
Sure, Apple's made some really nice ARM CPUs, but that's pretty useless if you don't want to run all-Apple hardware and use MacOS. And Windows keeps using x86 for whatever reason, even though technically they could target other architectures if they really wanted to (and they have, in the past). Linux basically just uses whatever Windows uses, because unlike Apple it's just not nearly big enough to command marketshare all by itself outside of dedicated servers. (And even here, for some reason, ARM hasn't made much headway, though I think it is pushing into this market slowly.)
This is completely false, unless you're just speaking theoretically. In the real world of 2024, there's no real alternative to x86 for general PC computing, even if you're running Linux. Where are the laptops with ARM CPUs? (No, Macs don't count; can't easily run Linux on those plus they have a huge price penalty.) Where are the consumer-grade ATX motherboard + CPU combos for building desktop PCs? None of this stuff exists, at this time.
Sure, Apple's made some really nice ARM CPUs, but that's pretty useless if you don't want to run all-Apple hardware and use MacOS. And Windows keeps using x86 for whatever reason, even though technically they could target other architectures if they really wanted to (and they have, in the past). Linux basically just uses whatever Windows uses, because unlike Apple it's just not nearly big enough to command marketshare all by itself outside of dedicated servers. (And even here, for some reason, ARM hasn't made much headway, though I think it is pushing into this market slowly.)
Hindsight is 20/20. If higher clocks won out because extractable IPC was lower Netburst was the right design.
The problem with Netburst was the clock speed wall. They designed it with a view to continued doubling which has been a trend up until then. It turns out once you go past 3GHz improvements are much, much slower.
We hit 3GHz in 2003. If you go back ten years from that, the top speed available was 66MHz, ten years before that and it was 8MHz. Fast forward 20 years and we're just barely scraping 6GHz.
We hit 3GHz in 2003. If you go back ten years from that, the top speed available was 66MHz, ten years before that and it was 8MHz. Fast forward 20 years and we're just barely scraping 6GHz.
Doing the math - even a conservative estimate for 1983 to 2003 is eight doublings.
That would give us a hypothetical Pentium 4 at 768GHz today. Which, Netburst or no, would wipe the floor with the fastest available multi-core chip.
While also putting out enough heat energy to keep a small town in Northern Canada warm all winter long.
That would give us a hypothetical Pentium 4 at 768GHz today. Which, Netburst or no, would wipe the floor with the fastest available multi-core chip.
While also putting out enough heat energy to keep a small town in Northern Canada warm all winter long.
Foresight (at the time) told you NetBurst was a dead end though. AMD made a lot of sales from people avoiding NetBurst, ignoring clock speeds and looking at actual performance numbers.
NetBurst looked good on benchmarks; code with few/no branches that fit in the L2 cache if not the L1 cache. On real world code consisting almost entirely of branches and pointer chasing the NetBurst chips performed horribly compared to lower clocked Athlons.
Intel's promises of 5+ GHz chips got more laughable as the line went on because they were already straining cooling and power supply options at less than 3GHz.
NetBurst looked good on benchmarks; code with few/no branches that fit in the L2 cache if not the L1 cache. On real world code consisting almost entirely of branches and pointer chasing the NetBurst chips performed horribly compared to lower clocked Athlons.
Intel's promises of 5+ GHz chips got more laughable as the line went on because they were already straining cooling and power supply options at less than 3GHz.
Netburst's branch predictor choices survived. It was the penalties that were a bad idea.
I have followed Intel's products closely. While they suck enough that there have passed more than 5 years since I have bought for the last time Intel CPUs (but before that I had spent a lot of money on Intel CPUs and other products), I have not seen any problem that can be attributed directly to Pat Gelsinger.
Unlike most companies, Intel publishes relatively detailed roadmaps with years in advance.
Since Pat Gelsinger has become CEO, all those roadmaps have been accomplished in time, even if the products have not been as good as they could have been, due to things like low clock frequencies for any new fabrication process at launch (but this is a problem that has plagued Intel for the entirety of the last 10 years) or high intercommunication latencies for the first Intel multi-tile CPUs, like Sapphire Rapids and Arrow Lake, which can be attributed to an unavoidable lack of experience with such designs (because the former Intel management has delayed for too many years the transition to such designs, with jokes about the "glued" CPUs of the competition).
According to the roadmaps published years ago, the recent years have been intended as transitional years, with the first really competitive Intel products being launched only in the second half of 2025. Only then it would have been possible to judge correctly whether Pat Gelsinger had done a good job or a bad job as CEO.
As outsiders, we do not have enough information about what Pat Gelsinger has done. The roadmaps have been reasonable, the main thing that could be criticized is that there have been too many intermediate steps before reaching desirable products. However, it is likely that Intel could not have sustained financially a more abrupt transition. Even with this slower transition that has included the launch of many intermediate products intended to avoid a collapse of the sales, the financial losses have been high enough that they have been used as an excuse to eject Pat Gelsinger.
It seems that Pat Gelsinger did not have the power to do a real cleanup of the Intel managers, especially of those from the fabs. For years many of those managers must have lied continuously both to other Intel divisions and in the public presentations. There is no public information that any of those managers have suffered adequate consequences for their actions.
Also, it does not seem that he has succeeded to improve the internal cooperation between various Intel divisions. Some internal competition is good, but withholding information and lack of cooperation is bad. At Intel, too many products appear to have been developed independently by different teams, instead of all teams sharing some common designs as a base for their products.
Unlike most companies, Intel publishes relatively detailed roadmaps with years in advance.
Since Pat Gelsinger has become CEO, all those roadmaps have been accomplished in time, even if the products have not been as good as they could have been, due to things like low clock frequencies for any new fabrication process at launch (but this is a problem that has plagued Intel for the entirety of the last 10 years) or high intercommunication latencies for the first Intel multi-tile CPUs, like Sapphire Rapids and Arrow Lake, which can be attributed to an unavoidable lack of experience with such designs (because the former Intel management has delayed for too many years the transition to such designs, with jokes about the "glued" CPUs of the competition).
According to the roadmaps published years ago, the recent years have been intended as transitional years, with the first really competitive Intel products being launched only in the second half of 2025. Only then it would have been possible to judge correctly whether Pat Gelsinger had done a good job or a bad job as CEO.
As outsiders, we do not have enough information about what Pat Gelsinger has done. The roadmaps have been reasonable, the main thing that could be criticized is that there have been too many intermediate steps before reaching desirable products. However, it is likely that Intel could not have sustained financially a more abrupt transition. Even with this slower transition that has included the launch of many intermediate products intended to avoid a collapse of the sales, the financial losses have been high enough that they have been used as an excuse to eject Pat Gelsinger.
It seems that Pat Gelsinger did not have the power to do a real cleanup of the Intel managers, especially of those from the fabs. For years many of those managers must have lied continuously both to other Intel divisions and in the public presentations. There is no public information that any of those managers have suffered adequate consequences for their actions.
Also, it does not seem that he has succeeded to improve the internal cooperation between various Intel divisions. Some internal competition is good, but withholding information and lack of cooperation is bad. At Intel, too many products appear to have been developed independently by different teams, instead of all teams sharing some common designs as a base for their products.
> Management is all about delegation.
yes, but a manager who has no idea about his products, is a bad manager. Sometimes the teams below compensate and this is not visible, but, when the shit hits the fun, it becomes obvious.
yes, but a manager who has no idea about his products, is a bad manager. Sometimes the teams below compensate and this is not visible, but, when the shit hits the fun, it becomes obvious.
If you care to read the article you’ll find evidence of Pat’s competence.
> Personally, I’ve heard nothing but bad things from Intel during Gelsinger’s tenure. He had some lofty ideas,
I don't know if I can say he was doing a good or bad job - it's really hard to say. But were there good things about him that people say?
He was the first CEO to say Intel was underpaying. He promised to raise pay, made a deal with the board to do so, and delivered. Most people got something like a 20% pay boost. Still not FAANG level, but compared to the prior CEOs who said "We pay fair market rates"... yeah, he won points with a lot of employees for that.
He quickly banned stock buybacks. Throughout his tenure he focused on his Foundry plans and improving engineering practices, at the cost of share value. His plan was "Let's fix our fabs and our efficiency, get back to building world class products, and the financials will take care of themselves". As opposed to all his predecessors who did stock buybacks instead of investing the money into the company.
He convinced the board to cut the dividend to a third of its value - because Intel was paying triple the dividends that its competitors paid.
No doubt many didn't like declining stocks, but no one can argue he was trying to artificially prop up the share price. His overall compensation was low.[1] He didn't earn any of his performance based stocks, and didn't try to manipulate those prices for personal gain. In the end he made a little over $10m per year - that includes the severance pay and signing bonus.
He was fairly good with transparency. He wanted the world to see the fab's financials when he knew they were poor. The point was to give the world a real number that could be used as a metric of how well Intel is doing. $8B loss this year, with the hope of breaking even in the next few years.
This last thing is what probably got him fired because the stock tanked after that (I don't know why - everyone knew it was unprofitable...).
Declining revenues are due to Intel products not competing. How much of that is Pat's fault - hard to say. Intel was making poor products for a while, and partly due to a poor fab process - which is precisely what Pat was trying to fix (5 nodes in 4 years is unprecedented, and it looks like Intel will achieve it). Lunar Lake was built on TSMC, and is a fairly decent product. Overall, the gap between AMD and Intel has shrunk.
Finally, perhaps the reason people really hated him: The layoffs. But as is often pointed out on HN, if you compare Intel's headcount with comparable companies (AMD, Nvidia), you can see Intel is really wasteful. The revenue per person is much, much lower. You can compare just the Intel Products head count (excluding the fabs). The layoffs had to happen. And there have to be more if Intel wants to be competitive. It can no longer command high margins.
So yeah, plenty hate him. But plenty do like him.
> but he clearly wasn’t executing well with Intel’s bread and butter business.
Nor were the previous two CEOs.
[1] https://finance.yahoo.com/news/pat-gelsinger-lost-massive-14...
I don't know if I can say he was doing a good or bad job - it's really hard to say. But were there good things about him that people say?
He was the first CEO to say Intel was underpaying. He promised to raise pay, made a deal with the board to do so, and delivered. Most people got something like a 20% pay boost. Still not FAANG level, but compared to the prior CEOs who said "We pay fair market rates"... yeah, he won points with a lot of employees for that.
He quickly banned stock buybacks. Throughout his tenure he focused on his Foundry plans and improving engineering practices, at the cost of share value. His plan was "Let's fix our fabs and our efficiency, get back to building world class products, and the financials will take care of themselves". As opposed to all his predecessors who did stock buybacks instead of investing the money into the company.
He convinced the board to cut the dividend to a third of its value - because Intel was paying triple the dividends that its competitors paid.
No doubt many didn't like declining stocks, but no one can argue he was trying to artificially prop up the share price. His overall compensation was low.[1] He didn't earn any of his performance based stocks, and didn't try to manipulate those prices for personal gain. In the end he made a little over $10m per year - that includes the severance pay and signing bonus.
He was fairly good with transparency. He wanted the world to see the fab's financials when he knew they were poor. The point was to give the world a real number that could be used as a metric of how well Intel is doing. $8B loss this year, with the hope of breaking even in the next few years.
This last thing is what probably got him fired because the stock tanked after that (I don't know why - everyone knew it was unprofitable...).
Declining revenues are due to Intel products not competing. How much of that is Pat's fault - hard to say. Intel was making poor products for a while, and partly due to a poor fab process - which is precisely what Pat was trying to fix (5 nodes in 4 years is unprecedented, and it looks like Intel will achieve it). Lunar Lake was built on TSMC, and is a fairly decent product. Overall, the gap between AMD and Intel has shrunk.
Finally, perhaps the reason people really hated him: The layoffs. But as is often pointed out on HN, if you compare Intel's headcount with comparable companies (AMD, Nvidia), you can see Intel is really wasteful. The revenue per person is much, much lower. You can compare just the Intel Products head count (excluding the fabs). The layoffs had to happen. And there have to be more if Intel wants to be competitive. It can no longer command high margins.
So yeah, plenty hate him. But plenty do like him.
> but he clearly wasn’t executing well with Intel’s bread and butter business.
Nor were the previous two CEOs.
[1] https://finance.yahoo.com/news/pat-gelsinger-lost-massive-14...
Agree with all of this - lot of armchair experts in here but the reality is we will not know how good he was until a few years down the line
> if you compare Intel's headcount with comparable companies (AMD, Nvidia), you can see Intel is really wasteful
AMD and NVIDIA are fabless. They are not comparable. It takes far more people to R&D a cutting-edge process node and run a dozen fabs 24/7 365.25 than it takes to design cutting edge chips.
AMD and NVIDIA are fabless. They are not comparable. It takes far more people to R&D a cutting-edge process node and run a dozen fabs 24/7 365.25 than it takes to design cutting edge chips.
> AMD and NVIDIA are fabless. They are not comparable.
Which is why I said:
> You can compare just the Intel Products head count (excluding the fabs).
Both AMD and Nvidia have under 30K folks. Intel has what - 115K employees? I can assure you that 85K of them are not working in Foundry. TSMC, BTW, has 76K employees in case you want to do a Foundry comparison. Anyway you slice it (compare products or compare fabs), Intel is wasteful.
Which is why I said:
> You can compare just the Intel Products head count (excluding the fabs).
Both AMD and Nvidia have under 30K folks. Intel has what - 115K employees? I can assure you that 85K of them are not working in Foundry. TSMC, BTW, has 76K employees in case you want to do a Foundry comparison. Anyway you slice it (compare products or compare fabs), Intel is wasteful.
Guy praying on twitter does not sound like some scientist to me, although article says he did 486
Lots of top tier scientists have been religious. Knuth is too, for instance. It strikes me as strange that believing in "simulation theory" has become cool and acceptable in tech circles, but somehow traditional popular religions are frowned upon. Feels dogmatic to believe so strongly that scientists necessarily have to be in direct contrast with religion.
>It strikes me as strange that believing in "simulation theory" has become cool and acceptable in tech circles
It has? I like to bring it up in comments sometimes, and I see other people do too, but this doesn't mean anyone actually "believes in it". Imagining it as a possibility is not at all akin to a religious belief, where you have a strong, dogmatic belief in something despite a total lack of evidence (or even evidence to the contrary).
It has? I like to bring it up in comments sometimes, and I see other people do too, but this doesn't mean anyone actually "believes in it". Imagining it as a possibility is not at all akin to a religious belief, where you have a strong, dogmatic belief in something despite a total lack of evidence (or even evidence to the contrary).
> a religious belief, where you have a strong, dogmatic belief
"Strong" belief is probably overselling the strength of the belief of an average religious adherent. A whole lot of people have doubts, only go to church a few times a year, etc. There are a lot of people for whom Pascal's Wager is persuasive, who stick with a religion despite severe doubts "just in case."
In either the case of traditional religion or simulation theory, you have people with varied levels of conviction believing in something for which there isn't empirical evidence. As an atheist, I consider simulation theory to be one of the many manifestation of the innate religious tendencies in humans. It lacks a supernatural component per se (that's debatable, it depends on what is meant precisely by supernatural), but it's a framework commonly used to construct many of the same spiritual systems traditionally seen in religions (our reality was intentionally created, we have a purpose to the creator, we're being watched, we're being judged, etc)
"Strong" belief is probably overselling the strength of the belief of an average religious adherent. A whole lot of people have doubts, only go to church a few times a year, etc. There are a lot of people for whom Pascal's Wager is persuasive, who stick with a religion despite severe doubts "just in case."
In either the case of traditional religion or simulation theory, you have people with varied levels of conviction believing in something for which there isn't empirical evidence. As an atheist, I consider simulation theory to be one of the many manifestation of the innate religious tendencies in humans. It lacks a supernatural component per se (that's debatable, it depends on what is meant precisely by supernatural), but it's a framework commonly used to construct many of the same spiritual systems traditionally seen in religions (our reality was intentionally created, we have a purpose to the creator, we're being watched, we're being judged, etc)
He's religious but that shows publicly only on his personal social media posts once a week, where he posts a bible verse. That's unusual in the tech industry. For some people like for example, Cathie Wood, conspicuous religiosity is a red flag. But I've never seen any evidence that Pat Gelsinger has any problems like that.
Just thought this article really drives home how a behemoth company like Intel in the midst of a turnaround can be completely kneecapped by a board of directors (virtually none of whom have any semiconductor experience!)
See comments in
https://news.ycombinator.com/item?id=42321673
Re c-suite
And for a positive counter example think Louis V. Gerstner, Jr. (1993 - 2002) when ibm was in a jamb.
https://news.ycombinator.com/item?id=42321673
Re c-suite
And for a positive counter example think Louis V. Gerstner, Jr. (1993 - 2002) when ibm was in a jamb.
Gerstner saved a brand name by destroying a tech company and making it a consulting company. I'm not sure the same is possible with Intel.
I think that undersells IBMs continued technical achievement in the mainframe space. It's a niche business but the folks who need it really need it. Sure fine it's not their growth sector, software (thanks mostly to RedHat), but they managed to keep a really cool and unique segment of engineering going despite commodity hardware eating the world.
Gerstner left ibm far better than when he found it. That's the main point.
Now generally speaking most American OEMs lost their manufacturing chops since 1985 when software began eating everything.
Today, tech companies need to decide: did that go too far? Should we reincorporate physical r&d, and down size manufacturing supply chain bringing it back inside?
Those are legit questions. Summarily stating ibm is just a consulting company doesn't get us anywhere.
Now generally speaking most American OEMs lost their manufacturing chops since 1985 when software began eating everything.
Today, tech companies need to decide: did that go too far? Should we reincorporate physical r&d, and down size manufacturing supply chain bringing it back inside?
Those are legit questions. Summarily stating ibm is just a consulting company doesn't get us anywhere.
Positive counterexample?
So you want Intel to go from a semiconductor manufacturing and design firm into a consulting and outsourcing company?
No. I want ibm to be a better ibm for its customers, and ditto for intel. Intel clearly is more about manufacturing than ibm. Put another way, dropping hw and hw manufacturing at Intel for something else is net worse.
IBM had three problems at that point.
The first was a culture of speaking to the expectations of senior executives, and following strategies that made no sense.
The second was that they were on all sides of all technology disputes - and so everyone hated them.
The third was that they were under an antitrust consent decree.
Basic software expertise wasn't going to help with any of this. The third was going to solve itself in time. The second was good old accounting. The first, well, https://gunkies.org/wiki/Gordon_Letwin_OS/2_usenet_post does a good job of describing what IBM was doing wrong.
By the time Open Source became a thing, IBM clearly had figured it out. The golden rule is this, people are willing to pay a certain amount for a solution to their problems. People don't care how their budget is divided. So if the complement to your solution is open source, you can charge more for the proprietary bit. Better yet, the open source thing with a bunch of support has a better shot than a completely proprietary stack. So open source the complement to your real product.
Gerstner somehow "got it". And it showed. This is why IBM supported Linux, Apache, etc in 1998/1999. Letting Microsoft lose the standards battles.
But do I see you saying that standards are a software issue? Maybe, but they also mattered to American Express. Which is where he came from. So he was equipped to understand the issue.
The first was a culture of speaking to the expectations of senior executives, and following strategies that made no sense.
The second was that they were on all sides of all technology disputes - and so everyone hated them.
The third was that they were under an antitrust consent decree.
Basic software expertise wasn't going to help with any of this. The third was going to solve itself in time. The second was good old accounting. The first, well, https://gunkies.org/wiki/Gordon_Letwin_OS/2_usenet_post does a good job of describing what IBM was doing wrong.
By the time Open Source became a thing, IBM clearly had figured it out. The golden rule is this, people are willing to pay a certain amount for a solution to their problems. People don't care how their budget is divided. So if the complement to your solution is open source, you can charge more for the proprietary bit. Better yet, the open source thing with a bunch of support has a better shot than a completely proprietary stack. So open source the complement to your real product.
Gerstner somehow "got it". And it showed. This is why IBM supported Linux, Apache, etc in 1998/1999. Letting Microsoft lose the standards battles.
But do I see you saying that standards are a software issue? Maybe, but they also mattered to American Express. Which is where he came from. So he was equipped to understand the issue.
That Usenet post was a fascinating read. I’ve only encountered OS/2 once in the wild, and it was in a lab being used to operate a very specialized piece of equipment, and it was circa 2005 so it was all ancient relics. Oddly, the lab members spoke highly of the user experience in OS/2 but I never got to mess with it.
You make good points, and provide good details. Thank you. I'll add around that. Based on a book or two I read on IBM at the time under Gerstner,
- talked to the top 50 or 100 customers to learn what IBM was good at, and sucked at. From this he learned that IBM's weird nomenclature and incompatibility with other LANs, disks, etc.. sucked. He learned IBM was a bit lost in its own world. Perhaps more critically written as entitled. IBM worked on fixing it. On the good side he learned customers like IBM for consulting/out-sourcing of projects. Whether apps, LANs, O/S, storage one at a time or all at the same time, IBM did it all and decently well. Customers had one guy to thank (when things good) or yell at (when things went wrong). Customer's prefer that over dealing with 4 different specialist companies they then had to corall onto the same page with attendant billing isssues. Insane costs for mainframes was another "IBM sucks".
- These points taken together is why Gerstner decided to not split IBM up, which is what the out-going CEO (Akron?) suggested. At the time specialist firms in printing, disk, LANs, etc were progressing faster than IBM. It was thought splitting IBM and selling off divisions might make those divisions more competitive and allow what remained to be more profitable.
- Learned that IBM had some good ideas that died in corporate American BS of meetings. Example: IBM had a manufacturing plan to reduce the costs of mainframes. When he found out never done, he got that going, and did something about removing the cruft of Corp America politics and nonsense that chokes out good ideas.
- IBM also got lucky that the internet era (think B2B) needed high capacity HW. Mainframes were key. They had the horsepower. IBM moved MSRP down, and made a lot of money at the same time.
- Gerstner was firm but fair. When he came in he said IBM's financial situation was dire. He said there'd be layoff's but once done, IBM would tend to not do more. So whoever was left was wanted, and was needed to make IBM better. That was both a like of remaining employees, a warm thanks to those who were left, and a warning, and an attempt to remove fear of firings in the future. Be here and be real or get lost. He sold off art, and real-estate to raise cash.
- talked to the top 50 or 100 customers to learn what IBM was good at, and sucked at. From this he learned that IBM's weird nomenclature and incompatibility with other LANs, disks, etc.. sucked. He learned IBM was a bit lost in its own world. Perhaps more critically written as entitled. IBM worked on fixing it. On the good side he learned customers like IBM for consulting/out-sourcing of projects. Whether apps, LANs, O/S, storage one at a time or all at the same time, IBM did it all and decently well. Customers had one guy to thank (when things good) or yell at (when things went wrong). Customer's prefer that over dealing with 4 different specialist companies they then had to corall onto the same page with attendant billing isssues. Insane costs for mainframes was another "IBM sucks".
- These points taken together is why Gerstner decided to not split IBM up, which is what the out-going CEO (Akron?) suggested. At the time specialist firms in printing, disk, LANs, etc were progressing faster than IBM. It was thought splitting IBM and selling off divisions might make those divisions more competitive and allow what remained to be more profitable.
- Learned that IBM had some good ideas that died in corporate American BS of meetings. Example: IBM had a manufacturing plan to reduce the costs of mainframes. When he found out never done, he got that going, and did something about removing the cruft of Corp America politics and nonsense that chokes out good ideas.
- IBM also got lucky that the internet era (think B2B) needed high capacity HW. Mainframes were key. They had the horsepower. IBM moved MSRP down, and made a lot of money at the same time.
- Gerstner was firm but fair. When he came in he said IBM's financial situation was dire. He said there'd be layoff's but once done, IBM would tend to not do more. So whoever was left was wanted, and was needed to make IBM better. That was both a like of remaining employees, a warm thanks to those who were left, and a warning, and an attempt to remove fear of firings in the future. Be here and be real or get lost. He sold off art, and real-estate to raise cash.
Also good points.
The layoff was straight out of Machiavelli. If you must do bad things, then do them all at once. If you can do good things, then do them bit by bit.
People will then forget the bad and remember the good.
The layoff was straight out of Machiavelli. If you must do bad things, then do them all at once. If you can do good things, then do them bit by bit.
People will then forget the bad and remember the good.
Intel without a foundry has no strategic value to the people of the united states.
Intel is pretty obviously dependent on taxpayer subsidies right now.
So they're going to get rid of the foundry?
Big brain plan over there.
Intel is pretty obviously dependent on taxpayer subsidies right now.
So they're going to get rid of the foundry?
Big brain plan over there.
I was going to say, the fab is capital-intensive but at least has value as an asset so long as you can keep it printing out chips profitably, which is more likely in a trade war where certain foreign chips are banned...
As for what chips you print on them... x86, ARM, RISC-V, GPUs, NPUs, RAM, FPGAs, PLAs, print whatever the market asks for... It's not like there's fundamental superior value in x86 as an intellectual property, just inertia.
But local manufacturing gets protected in a trade war, because you'll need it if push comes to shove. Intellectual property just gets stolen and copied.
As for what chips you print on them... x86, ARM, RISC-V, GPUs, NPUs, RAM, FPGAs, PLAs, print whatever the market asks for... It's not like there's fundamental superior value in x86 as an intellectual property, just inertia.
But local manufacturing gets protected in a trade war, because you'll need it if push comes to shove. Intellectual property just gets stolen and copied.
Is Pat ok? Everyone’s talking about how it’s terrible to force pat out but he started posting very out of context bible quotes to twitter starting in August this year and continued posting since.
There’s been no word of personal health issues but it did seem like a sudden change.
There’s been no word of personal health issues but it did seem like a sudden change.
James Goetz is a partner at Sequoia and joined the board in November 2019. He has previously served on networking-focused boards. He has a degree in electrical engineering, is likely semi-technical, and understands the industry. He’s relatively new but likely does not have a technical background. He’s been on the board long enough to be partially to blame.
I crossed paths with Jim Goetz at Accel because of the company Vital Signs that he started. I am not sure why they say "but likely does not have a technical background" because I can attest that he clearly did. Weird.
I crossed paths with Jim Goetz at Accel because of the company Vital Signs that he started. I am not sure why they say "but likely does not have a technical background" because I can attest that he clearly did. Weird.
Jim and I were on my company's board (Jive) and he absolutely has a technical background.
I’m not sure how it’s possible to come to a firm view on this decision on the basis of the information that is now public.
For example whilst there has been apparent technical progress eg on 18A - which is central to Gelsingers track record - it will mean nothing without IFS customers. It wouldn’t take a technical background to evaluate whether Intel is making progress in actually signing firms up for IFS.
Will technical progress continue without Gelsinger - surely yes. But a new CEO might also deal with issues that he was clearly slow to such as costs and getting rid of products that are going nowhere.
For example whilst there has been apparent technical progress eg on 18A - which is central to Gelsingers track record - it will mean nothing without IFS customers. It wouldn’t take a technical background to evaluate whether Intel is making progress in actually signing firms up for IFS.
Will technical progress continue without Gelsinger - surely yes. But a new CEO might also deal with issues that he was clearly slow to such as costs and getting rid of products that are going nowhere.
Surely yes?
Intel has been a company of engineering underdelivery and incompetence for a decade now. Huge bonuses and pay to financial management, salary reductions and cheapness on the labor side, your classic American MBA war-on-labor.
The fact they cannot deliver a GPU, which is just a big vector processing array fundamentally, has been the long running sign of Intel's incompetence, something they should have had literally 25 years ago when Apples had vector processors and the first 3D accelerators were hitting the PC gaming world.
The intellectual talent long fled Intel, and they didn't invest in replacement intellectual talent. Because MBAs don't respect "talent". They tolerate it for some function of tolerance, and generally the "dead sea effect" is imposed as talent leaves and the managers let the structure rot rather than fix it.
Gelsinger obviously didn't have time to fix the intellectual and talent rot, because he probably needed to eliminate three levels of vice presidents to start with.
I really celebrate the article's approach. The arrival of massive CEO pay, allegedly because of how important, public, and critical their positions are, never actually comes with detailing of who is in charge and the effect of their decisions.
Why do the major heads of petroleum companies, cigarette companies, and other managerial structures largely get to destroy their companies or the world in the anonymity of private org charts?
Intel has been a company of engineering underdelivery and incompetence for a decade now. Huge bonuses and pay to financial management, salary reductions and cheapness on the labor side, your classic American MBA war-on-labor.
The fact they cannot deliver a GPU, which is just a big vector processing array fundamentally, has been the long running sign of Intel's incompetence, something they should have had literally 25 years ago when Apples had vector processors and the first 3D accelerators were hitting the PC gaming world.
The intellectual talent long fled Intel, and they didn't invest in replacement intellectual talent. Because MBAs don't respect "talent". They tolerate it for some function of tolerance, and generally the "dead sea effect" is imposed as talent leaves and the managers let the structure rot rather than fix it.
Gelsinger obviously didn't have time to fix the intellectual and talent rot, because he probably needed to eliminate three levels of vice presidents to start with.
I really celebrate the article's approach. The arrival of massive CEO pay, allegedly because of how important, public, and critical their positions are, never actually comes with detailing of who is in charge and the effect of their decisions.
Why do the major heads of petroleum companies, cigarette companies, and other managerial structures largely get to destroy their companies or the world in the anonymity of private org charts?
Intel does have GPUs on the market which are good on the silicon side, but simply do not have the same level of software support that companies like Nvidia have built up (Nvidia has drivers that are backwards compatible for 20 years, Intel has issues with games released more than 4 years ago, as an example)
What they don't have is GPU manufacturing setup. All the Intel GPUs are fabbed by TSMC. But guess what, Nvidia has no manufacturing at all!
What they don't have is GPU manufacturing setup. All the Intel GPUs are fabbed by TSMC. But guess what, Nvidia has no manufacturing at all!
I heard people were optimistic about their GPU drivers for AI when comparing them to AMD at least, I have a few friends that seem happy with each major driver version update they get for gaming as well so I'm optimistic that they can eventually figure out the software side of things.
> The fact they cannot deliver a GPU, which is just ..
“Just”?! This is an incredibly dumb take.
Are you by chance comparing a brand new hardware product launch with a software product launch? Launching a hw product that does well takes YEARS. Any other company will not be able to pull this off, or they would have done it already. Intel has done quite well coming up with a decent gpu from scratch. There are like two other companies in this world that know how to do that, and they took a long, long time to get there.
“Just”?! This is an incredibly dumb take.
Are you by chance comparing a brand new hardware product launch with a software product launch? Launching a hw product that does well takes YEARS. Any other company will not be able to pull this off, or they would have done it already. Intel has done quite well coming up with a decent gpu from scratch. There are like two other companies in this world that know how to do that, and they took a long, long time to get there.
They absolutely could have done so multiple times, and did a few times with the iGPU and Larrabee, but the issue was that they wanted to protect their lucrative CPU cash cow.
So Jensen and nVidia worked around them. Any big tech company can become a fabless semiconductor company quickly, so the value edge of having "the best CPU" is declining. Intel products are OK for now but we can machine translate x86 to ARM or risc-v so well that it won't matter.
So Jensen and nVidia worked around them. Any big tech company can become a fabless semiconductor company quickly, so the value edge of having "the best CPU" is declining. Intel products are OK for now but we can machine translate x86 to ARM or risc-v so well that it won't matter.
>The fact they cannot deliver a GPU,
Their recent GPUs are decent, wdym?
Their recent GPUs are decent, wdym?
So Gelsinger personally did all the technical work on 18A? Of course he didn’t and the work on that will continue.
He also didn’t really deal with the other issues you’ve highlighted and the ‘didn’t have time bit’ is just an excuse.
I mean how much time did it take to say eg Gaudi is a distraction and we should end it?
He also didn’t really deal with the other issues you’ve highlighted and the ‘didn’t have time bit’ is just an excuse.
I mean how much time did it take to say eg Gaudi is a distraction and we should end it?
This may sound weird but I think the CHIPS act tempted intel to overextend. Counterintuitively they may even have been better without the money.
i don’t think problem was never lack of manufacturing capacity. I think it was process tech.
So I think the free govt money tempted them to invest in something that wasn’t mission critical - old node capacity, when they really needed r&d
i don’t think problem was never lack of manufacturing capacity. I think it was process tech.
So I think the free govt money tempted them to invest in something that wasn’t mission critical - old node capacity, when they really needed r&d
It was announced a few days ago that Intel is finally going to actually receive something from the CHIPS act. So far they haven't gotten a dime. CHIPS money has overall distributed barely any of the funds.
That's a good point, there's also Trump coming in and potential tariffs. The path set by Pat Gelsinger may no longer be the most profitable, in the short term. Why invest and restructure if you expect the incoming government to cut your competitors off and allow you to cruise along for another four years?
Highly recommend the latest Oxide and Friends podcast where they discuss a lot of this and related stuff: https://oxide.computer/podcasts/oxide-and-friends/2218242
As a shareholder who lost quite a bit I was angry at Gelsinger. But now after reading this article I feel sorry for him as someone who by all appearances tried to do a very hard thing and just came up short and got pushed out by the board.
Loss of a lot of performance crowns to AMD and 13th and 14th gen cpu failure problems were big black marks on his watch but its not certain that anyone else would have done better and I never doubted his commitment to the job at hand. Maybe what Intel needs is a whole culture shift to get rid of the bureaucratization and HR-ization and Gelsinger was not ruthless enough in removing calcified middle management layers and thought he could save Intel with technical achievements alone and avoid a lot of human suffering.
Loss of a lot of performance crowns to AMD and 13th and 14th gen cpu failure problems were big black marks on his watch but its not certain that anyone else would have done better and I never doubted his commitment to the job at hand. Maybe what Intel needs is a whole culture shift to get rid of the bureaucratization and HR-ization and Gelsinger was not ruthless enough in removing calcified middle management layers and thought he could save Intel with technical achievements alone and avoid a lot of human suffering.
I have mixed feelings about this. On one hand, Intel as we knew it, a technical powerhouse, who kicked ass and delivered the Moore's law, would likely have been best served by someone like Pat than the alternatives. However, the world may have changed and the real value of Intel going forward may be the national security aspect of it. If Intel is becoming a Lockheed Martin, perhaps you want a capital allocator more than a technologist at the helm.
What national security? Huh? What do you have in mind for intel to be going forward?
Fabs. The only other major players are Samsung and TSMC, with the latter being the giant. If China invades Taiwan, they control the bulk of the semiconductor supply.
The rumors say TSMC fabs are designed to self-destruct if China takes control of them.
I don't know if that is true, but even if it wasn't I suspect that the US would destroy them instead of letting China have them. China having a de-facto monopoly on semiconductors production is a serious problem for the US until new fabs will be available elsewhere.
In fact, not only they can prioritize domestic military/AI development leapfrogging the US giving enough time, but they can provide high tech components to the likes of Russia, Iran, North Korea.
And the US wouldn't be able to retaliate as China could simply levy taxes or bans semiconductors exports to the US and whoever sells to them (similar to what the US is doing with Russia after the war in Ukraine started).
So I expect that, as soon as an hypothetical invasion of Taiwan looks like it's gonna succeed, those fabs will be reduced to dust.
I don't know if that is true, but even if it wasn't I suspect that the US would destroy them instead of letting China have them. China having a de-facto monopoly on semiconductors production is a serious problem for the US until new fabs will be available elsewhere.
In fact, not only they can prioritize domestic military/AI development leapfrogging the US giving enough time, but they can provide high tech components to the likes of Russia, Iran, North Korea.
And the US wouldn't be able to retaliate as China could simply levy taxes or bans semiconductors exports to the US and whoever sells to them (similar to what the US is doing with Russia after the war in Ukraine started).
So I expect that, as soon as an hypothetical invasion of Taiwan looks like it's gonna succeed, those fabs will be reduced to dust.
> The rumors say TSMC fabs are designed to self-destruct if China takes control of them.
That still denies you access to the microprocessors that you may need for your own military equipment. My guess is that China already produces what they need in terms of microprocessors in mainland China, so while they can't access TSMC technology that won't necessarily have any influence on their weapons production. The US, and the west in general, needs to be able to produce semiconductors for the defence industry locally. For the US, and the EU, Intel is, or can be, a major part of the solution.
That still denies you access to the microprocessors that you may need for your own military equipment. My guess is that China already produces what they need in terms of microprocessors in mainland China, so while they can't access TSMC technology that won't necessarily have any influence on their weapons production. The US, and the west in general, needs to be able to produce semiconductors for the defence industry locally. For the US, and the EU, Intel is, or can be, a major part of the solution.
> I don't know if that is true, but even if it wasn't I suspect that the US would destroy them instead of letting China have them.
Propping up Intel is far, far cheaper than a war with China.
Propping up Intel is far, far cheaper than a war with China.
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Let's not underestimate the complexity of the problem Gelsinger took on. I base that on the experience of selling them a company, and then having a little bit of a view from inside (under Bob Swan). It's clear to me that Gelsinger was trying to keep a lot of plates spinning while returning to former glory in an organization with a lot of cultural baggage doing work that is not amenable to clean sheet attempts. Messy. Post author is probably correct that PE-style chop & shop is the short-term most profitable approach, but it's also the worst outcome for almost everyone besides the largest shareholders.
What I'm looking for in the next set of leadership is a clear, positive vision for the future + an acknowledgement of the systemic changes to the industry they're in (e.g. no longer have the dominant volume to give them a process leadership advantage). There's a lot they can do with tight integration, security, software platform, and product lifecycle that the smaller fabless players aren't able to (yet).
What I'm looking for in the next set of leadership is a clear, positive vision for the future + an acknowledgement of the systemic changes to the industry they're in (e.g. no longer have the dominant volume to give them a process leadership advantage). There's a lot they can do with tight integration, security, software platform, and product lifecycle that the smaller fabless players aren't able to (yet).
Working at Boeing, GE... should be like a kiss of death - permanent ban on any work related to shareholder value
Intel should have someone like Jim Keller on the board. Maybe even software folks like Chris Lattner. Not Boeing, GE, merger and acquisition clowns.
He was there in 2020!
He left after something like 3 months because he couldn't get buy-in for his ideas from senior management, most probably the board of directors: https://www.reddit.com/r/intel/comments/z3set6/jim_keller_ap...
He left after something like 3 months because he couldn't get buy-in for his ideas from senior management, most probably the board of directors: https://www.reddit.com/r/intel/comments/z3set6/jim_keller_ap...
It was a bit more than 3 months: According to Wikipedia, between April of 2018 and June of 2020. Him not getting buy-in for his ideas though does appear to be one of the reasons he left.
Clowns indeed. The only investment Boeing and Intel board members know how to execute is the ole' C-suite self-serving stock buyback.
Intel is over 100B in the last 30 years.
Boeing bought back 3x what it would have cost to develop the next-gen 737 in very recent history.
Clowns with no shame, and apparently no repercussions.
Intel is over 100B in the last 30 years.
Boeing bought back 3x what it would have cost to develop the next-gen 737 in very recent history.
Clowns with no shame, and apparently no repercussions.
it is a publicly-traded company though, and if they are not working towards increasing shareholder value the investors will bolt and then how are you gonna pay your bills? :)
nationalizing might be a way but the government will run it and that always works out…
nationalizing might be a way but the government will run it and that always works out…
What's crazy about Intel's downfall is that Intel used a bunch of anticompetitive tactics to hamper AMD throughout the years and still couldn't keep them at bay long term. It's like a sports team that keeps cheating and still loses in the end.
> The Death of Intel
I know they are not doing well number wise but is it correct to claim this? Or it exaggerated?
If it is somewhat true, what could Intel ideally do to not die? The article talks about Gelsinger's naivete and provides a quanitity for wafers but I don't know what that means.
I know they are not doing well number wise but is it correct to claim this? Or it exaggerated?
If it is somewhat true, what could Intel ideally do to not die? The article talks about Gelsinger's naivete and provides a quanitity for wafers but I don't know what that means.
It probably means the death of a high net income business or a business that leads in its field.
They fall sufficiently far back that they can no longer afford to pay the wages and capital expenses necessary to compete.
They fall sufficiently far back that they can no longer afford to pay the wages and capital expenses necessary to compete.
Most bureaucratic woes can be attributed to abysmal board oversight, profit and non-profit alike.
And when CEO or presidents are allowed to snow the board via force of personality and (for lack of a better way to say it) good old boy mentality.
I've lived through it at multiple organizations.
It's the worst death for a company.
I've lived through it at multiple organizations.
It's the worst death for a company.
> His brief stint of 1386 days was surprising because not only was he the most technically competent CEO of the last few bad apples at Intel, but he was also among the shortest.
Well, how tall is he? And why does it matter? The article never actually says.
Well, how tall is he? And why does it matter? The article never actually says.
I'm pretty sure that was a typo. Short tenure, not short stature
For some reason when Apple moved to their own SOC I knew this would be one of the nails in the death of the company. A few other blunders on their part and here we are.
In their defense its a complex world. Its easy to focus on people and forget about how complex the environment they operate in has become. And the complexity is increasing not decreasing.
Google C-Suite turnover rates and the downward trend they have been on for the last few decades. In Tech and Finance C-Suite its super steep. The famous ones are outliers and mostly figure heads. Behind the scenes there is constant chaotic churn.
Google C-Suite turnover rates and the downward trend they have been on for the last few decades. In Tech and Finance C-Suite its super steep. The famous ones are outliers and mostly figure heads. Behind the scenes there is constant chaotic churn.
Yeah and this space is about as complex as it gets. That being said, they have screwed a lot of things up. But even if they executed perfectly they might be in approximately the same spot.
Just one thing is missing from this excellent article: any explanation of why splitting up Intel, while it would “maximise shareholder value” is also “bad for America”. What’s America’s interest in having an integrated designer and manufacturer, rather than splitting the roles?
I’m sure the Intel board members will be drying their tears with hundred dollar bills when their assistants tell them about this article. I don’t remember a time when Intel either had a strategy or the strategy wasn’t short-sighted.
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Is this guy short INTC, yes or no. The rest is color commentary
Hey who changed the title of this post?
MBAs are the ruin of America
Fabricated Knowledge
would be helpful if I could get assistance with the paywall – I could be wrong, but I'm assuming a sizeable handful of commenters in this section managed to read this paywalled article?
Is it time for Elon Musk to step in, or is it too early ?
Now with the CHIPs money coming in, it might be the right time...
Now with the CHIPs money coming in, it might be the right time...
I don't think Intel manufactures enough transgender chips to make Musk care about buying it
Interesting idea. And with Musk's ties to Trump, he doesn't need to buy Intel himself. The shake-up doesn't need to fit stereotypes, nor (with the current SCOTUS) satisfy legal niceties. If Musk told Trump "great countries make their own chips", the national security establishment echoed that, and Pat wound up in charge of Intel's fabs, with "Make Great Chips" for his marching orders...could Pat make that work out? It certainly would be interesting.
Yes, Pat could come back and take care of IFS, with this time a supporting CEO/board.
With the China/Taiwan tensions, it might be a good move for the US to not let Intel slip further, and stir that ship in the right direction.
Musk could justify the move to help his AI ventures (XAi, Tesla FSD, robot, etc.)
By asking musk to step in are you talking about having him make the company worth 10% of what it’s worth now?
Not worrying about the worth of the company as much, but more to salvage the chip maker expertise that Intel still has (Intel has been in several rounds of layoffs, including 15,000 in 2024).
According to the article, splitting Intel would be good (short term) for the shareholders, bad long term, and bad for the country.
Intel is still a great asset, but it looks like it is losing its appeal as time passes. CEO of Intel is deemed to be a very challenging position. The board does not seem to know how to turn the ship around.
I could see Musk steering that ship. It is technically challenging (Musk seems to thrive in those environments), and it could even benefit the other Musk companies to some extent (XAi, Tesla and even maybe SpaceX).
Intel market cap is 94.713B (AMD is 233B, ARM Holdings is 144B... not mentioning NVIDIA), so about twice what Musk paid for Twitter. But if Musk sets his view on Intel, he would not have a hard time to finance the purchase. Actually, he could wait a bit more as the stock can fall even more (today, Intel stock is at the price of Dec. 1996).
This is armchair talking/joke, and it would be one more crazy thing on the 2024 bingo card, but from all the crazy things we have seen recently, Musk taking over Intel would look quite normal in comparison.
According to the article, splitting Intel would be good (short term) for the shareholders, bad long term, and bad for the country.
Intel is still a great asset, but it looks like it is losing its appeal as time passes. CEO of Intel is deemed to be a very challenging position. The board does not seem to know how to turn the ship around.
I could see Musk steering that ship. It is technically challenging (Musk seems to thrive in those environments), and it could even benefit the other Musk companies to some extent (XAi, Tesla and even maybe SpaceX).
Intel market cap is 94.713B (AMD is 233B, ARM Holdings is 144B... not mentioning NVIDIA), so about twice what Musk paid for Twitter. But if Musk sets his view on Intel, he would not have a hard time to finance the purchase. Actually, he could wait a bit more as the stock can fall even more (today, Intel stock is at the price of Dec. 1996).
This is armchair talking/joke, and it would be one more crazy thing on the 2024 bingo card, but from all the crazy things we have seen recently, Musk taking over Intel would look quite normal in comparison.
Maybe if he owned the whole thing and could run it as he liked, without having to care about the stock price or paying money to investors, but personally I don't think anyone can do it while also satisfying the stock market.
I'm not sure Musk is especially qualified either, except that he could afford it.
I'm not sure Musk is especially qualified either, except that he could afford it.
We’re going to need a bigger bingo card for 2025…
You’re right. Intel makes too many woke CPUs.
I think a lot of the analysis of Intel is just looking at a totally broken timeframe. Intel started having problems in early 2010s. It has been sliding since then. To fix it you need to clean house, get aligned on a good chain of management and engineering, then build out a roadmap that gets you back to process leadership and then execute on that roadmap. A year to sort out the organisation, a year to re-vamp the roadmap, probably 2-3 years to execute. Pat was probably the only person with the clout to ask for that time, and he didn't get it (and arguably he didn't really face the scale of the problem). The board failed, but it failed in 2010-2015, there's no point searching for someone to blame now, we're well past the point that the correct answer is to sell it for parts.
Vote me down to the 9th circle of hell, but I find the article is
simply off with the fairies. What do boards, directors, companies,
capital, investors or any of the self-important suit-wearing dog and
pony show have to do with what's happening to Intel?
Intel is dying because it simply cannot bring itself to make a product that people want instead of the things it thinks people want [0].That's its fundamental life-preserving responsibility to itself. Sure, semiconductor making is very cut-off from the reality of what it makes tech for. But mindless progress for the sake of progress? It's a headless chicken running about the farmyard. The basics of business still apply. Make stuff people ask you for.
[0] https://techrights.org/n/2024/12/04/Technology_rights_or_res...
Intel is dying because it simply cannot bring itself to make a product that people want instead of the things it thinks people want [0].That's its fundamental life-preserving responsibility to itself. Sure, semiconductor making is very cut-off from the reality of what it makes tech for. But mindless progress for the sake of progress? It's a headless chicken running about the farmyard. The basics of business still apply. Make stuff people ask you for.
[0] https://techrights.org/n/2024/12/04/Technology_rights_or_res...
> Intel is dying because it simply cannot bring itself to make a product that people want instead of the things it thinks people want [0].
Not sure that the link adequately makes its case. The number of people that actually care about Intel Management Engine is extremely small. Intel's real problem is that their products have struggled to be competitive in the marketplace on a price and performance level.
Not sure that the link adequately makes its case. The number of people that actually care about Intel Management Engine is extremely small. Intel's real problem is that their products have struggled to be competitive in the marketplace on a price and performance level.
> The number of people that actually care about Intel Management Engine is extremely small.
I think this sentence, in isolation, actually kind of nails the problem. I realize this isn’t what you and the article you’re replying to have in mind, but: no one cares enough about ME to buy it. After years of development, Intel has a solution to server management (and client management?) that is arguably technically superior to the crappy, power hungry chips from ASPEED and the management stacks from the likes of Dell and HPE that, until very recently, were unbelievably bad.
But Intel completely failed to execute! ME should have been a headline feature, made friendly to the point where people would buy Intel systems because of ME. Anyone considering AMD or Ampere or POWER would be annoyed because their organization heavily used ME and Intel’s competitors didn’t have it!
But instead, Intel hid the good parts (iAMT) behind annoying SKUs, obnoxious and secretive software and weird proprietary lock-ins. And the result is: no one cares about ME!
(Intel has messed up most of its recent features in almost exactly the same way.)
I think this sentence, in isolation, actually kind of nails the problem. I realize this isn’t what you and the article you’re replying to have in mind, but: no one cares enough about ME to buy it. After years of development, Intel has a solution to server management (and client management?) that is arguably technically superior to the crappy, power hungry chips from ASPEED and the management stacks from the likes of Dell and HPE that, until very recently, were unbelievably bad.
But Intel completely failed to execute! ME should have been a headline feature, made friendly to the point where people would buy Intel systems because of ME. Anyone considering AMD or Ampere or POWER would be annoyed because their organization heavily used ME and Intel’s competitors didn’t have it!
But instead, Intel hid the good parts (iAMT) behind annoying SKUs, obnoxious and secretive software and weird proprietary lock-ins. And the result is: no one cares about ME!
(Intel has messed up most of its recent features in almost exactly the same way.)
This is a good point that I cannot disagree with. One more round in
the magazine of the Intel footgun. Lack of openness and engagement
with customers cuts both ways. The ME tech is great for a market
segment of industrial datacentres. If those buyers chose to prioritise
energy and management over security, then hurrah to whatever works for
them.
But as you say, Intel hid it away. Like a guilty secret. They somehow forgot to tell even their most Evil™ customers about the Evil Inside™. Which is jolly suspicious. And they've hidden away other "features" that trash security. It may be the number of people who "actually care about Intel Management Engine is extremely small", but those who do matter and they make decisions. Yes performance is important but security factors are going to be gaining more and more influence now.
So Intel were told time and time again that people want legible, well documented products with no surprises, and they ignored that.
But as you say, Intel hid it away. Like a guilty secret. They somehow forgot to tell even their most Evil™ customers about the Evil Inside™. Which is jolly suspicious. And they've hidden away other "features" that trash security. It may be the number of people who "actually care about Intel Management Engine is extremely small", but those who do matter and they make decisions. Yes performance is important but security factors are going to be gaining more and more influence now.
So Intel were told time and time again that people want legible, well documented products with no surprises, and they ignored that.
Fully agree — always thought the same way.
Saw AMT once about 15 years ago — available for free on an Intel banded desktop motherboard.
Now I can’t even pay money to use it on my modern PCs…
Saw AMT once about 15 years ago — available for free on an Intel banded desktop motherboard.
Now I can’t even pay money to use it on my modern PCs…
I could see a case for "we'll sell a few narrow SKUs of non-ME products for an audience that demands it" -- assuming there are some people who will vote with their pockets for it. It's probably up there with some of the other corner-cases in their product matrix.
But I agree, that's noise. There are much bigger problems with their product line:
* Adding and removing features (especially AVX, but also the whole market-segmentation nonsense with ECC memory) * The marginal and in some cases negative generation-over-generation performance boosts. * The unlocked wattage situation which screams "we're pushing an end-of-the-rope product that we can only get to decent clocks by feeding it an entire mains circuit". (See: FX-9590, Pentium 4 Extreme Edition)
Intel might be able to say "Today's Glysophate Lake CPU is clearly better than the Haswell you bought 10 years ago", but there will be a lot of mumbling if you ask "how much better is it than last year's Paraquat Lake". That doesn't inspire confidence, especially when they have traditionally been the premium brand.
But I agree, that's noise. There are much bigger problems with their product line:
* Adding and removing features (especially AVX, but also the whole market-segmentation nonsense with ECC memory) * The marginal and in some cases negative generation-over-generation performance boosts. * The unlocked wattage situation which screams "we're pushing an end-of-the-rope product that we can only get to decent clocks by feeding it an entire mains circuit". (See: FX-9590, Pentium 4 Extreme Edition)
Intel might be able to say "Today's Glysophate Lake CPU is clearly better than the Haswell you bought 10 years ago", but there will be a lot of mumbling if you ask "how much better is it than last year's Paraquat Lake". That doesn't inspire confidence, especially when they have traditionally been the premium brand.
> Intel's real problem is that their products have struggled to be competitive in the marketplace on a price and performance level.
That's not super true. AMD has had good outlier performance in gaming with the X3Ds for a while, but for regular use something like a 13400f has been as good of a deal as any AMD chip.
Arrow lake seems to have definitely made the situation worse for intel though.
That's not super true. AMD has had good outlier performance in gaming with the X3Ds for a while, but for regular use something like a 13400f has been as good of a deal as any AMD chip.
Arrow lake seems to have definitely made the situation worse for intel though.
For most people. "regular use" (and "gaming") is the expectation that the CPU doesn't self-destruct.
Regaining the faith of users will take years if the best Intel has to say is "this SKU is unaffected by this flaw"; less years if they openly switch to more trusted TSMC processes and/or ARM designs.
Regaining the faith of users will take years if the best Intel has to say is "this SKU is unaffected by this flaw"; less years if they openly switch to more trusted TSMC processes and/or ARM designs.
If it was only IME...
But AMD has their own version with the PSP.
So we're stuck on Bulldozer hoping for Risc-V or something to mature enough before Bulldozer is completely obsolete.
(With Apple obviously never having been an option to start with, and Microsoft keeping to push for the likes of TPM and Pluton, thankfully still optional for now.)
But AMD has their own version with the PSP.
So we're stuck on Bulldozer hoping for Risc-V or something to mature enough before Bulldozer is completely obsolete.
(With Apple obviously never having been an option to start with, and Microsoft keeping to push for the likes of TPM and Pluton, thankfully still optional for now.)
Because if the rot is this bad at the top, imagine what it's like below it.
The board smacks of people that spend their careers making and defending their career positions, rather than actually doing something or achieving something. These are the top dogs of middle management Machiavellis.
Underneath them is just a bunch of lackeys built on loyalty, not competence. The talent has been chased out. The talent that remains in engineering is likely just counting days to retirement or a buyout package.
The board smacks of people that spend their careers making and defending their career positions, rather than actually doing something or achieving something. These are the top dogs of middle management Machiavellis.
Underneath them is just a bunch of lackeys built on loyalty, not competence. The talent has been chased out. The talent that remains in engineering is likely just counting days to retirement or a buyout package.
You do realize that it takes at least 5 years for new products to come to fruition in semi right? And Intel brought GPUs to market under Gelsinger's tenure.
This isn't some software startup that just pivots from widget A to widget B or some ad campaign
Even Tesla took like 5 years from announcement (after several years of developing a prototype BEFORE the announcement) to bringing the Cybertruck to market, and unlike cars, you need to mostly build the entire assembly line from scratch for new nodes every few years.
It will be at least 3 years before we even see the outcome of decisions Gelsinger made at the beginning of his tenure.
This isn't some software startup that just pivots from widget A to widget B or some ad campaign
Even Tesla took like 5 years from announcement (after several years of developing a prototype BEFORE the announcement) to bringing the Cybertruck to market, and unlike cars, you need to mostly build the entire assembly line from scratch for new nodes every few years.
It will be at least 3 years before we even see the outcome of decisions Gelsinger made at the beginning of his tenure.
Big companies are not agile.
On the other hand I studied VLSI at school and we designed a 4 bit microprocessor (team of 10 students) in a couple of months and had it fabbed and back on the test bench before the end of semester.
And we had to listen to what the instructor told us, which is the failing I'm chewing Intel out for. Being obstreperous and uncooperative with the market, not slow.
On the other hand I studied VLSI at school and we designed a 4 bit microprocessor (team of 10 students) in a couple of months and had it fabbed and back on the test bench before the end of semester.
And we had to listen to what the instructor told us, which is the failing I'm chewing Intel out for. Being obstreperous and uncooperative with the market, not slow.
Grandparent said:
> it simply cannot bring itself to make a product that people want
To which you responded:
> You do realize that it takes at least 5 years
Intel could lower the price on their HEDT chips tomorrow.
Intel could enable AVX-512 tomorrow.
Intel could more fully open up their fabs to other companies tomorrow.
Intel could publicly commit to producing silicon with no Management Engine tomorrow.
What would you do, if you were Intel CEO?
> it simply cannot bring itself to make a product that people want
To which you responded:
> You do realize that it takes at least 5 years
Intel could lower the price on their HEDT chips tomorrow.
Intel could enable AVX-512 tomorrow.
Intel could more fully open up their fabs to other companies tomorrow.
Intel could publicly commit to producing silicon with no Management Engine tomorrow.
What would you do, if you were Intel CEO?
> Intel could enable AVX-512 tomorrow.
They can't just enable AVX-512 on their chips that include both performance and efficiency cores, because it's only present on the perf cores.
> Intel could more fully open up their fabs to other companies tomorrow.
Their fabs are open to other companies. they have multiple customers already signed on to make their chips on 18A/1.8nm process that enters mass production next year, including Amazon and the DoD.
> Intel could publicly commit to producing silicon with no Management Engine tomorrow.
Do real people actually care about the presence or absence of the IME to such a degree that it would be worth redesigning a bunch of their products and greatly increasing the number of individual SKUs?
... and, your first point "Intel could lower the price on their HEDT chips tomorrow". Well.. they could I suppose? They are pretty irrelevant when it comes to HEDT chips anyway though considering how crazy Threadrippers are. Would they really sell more of them if they knocked a couple hundred off their 2000/3000 lines? probably not. they're all under 5GHz anyway.
They can't just enable AVX-512 on their chips that include both performance and efficiency cores, because it's only present on the perf cores.
> Intel could more fully open up their fabs to other companies tomorrow.
Their fabs are open to other companies. they have multiple customers already signed on to make their chips on 18A/1.8nm process that enters mass production next year, including Amazon and the DoD.
> Intel could publicly commit to producing silicon with no Management Engine tomorrow.
Do real people actually care about the presence or absence of the IME to such a degree that it would be worth redesigning a bunch of their products and greatly increasing the number of individual SKUs?
... and, your first point "Intel could lower the price on their HEDT chips tomorrow". Well.. they could I suppose? They are pretty irrelevant when it comes to HEDT chips anyway though considering how crazy Threadrippers are. Would they really sell more of them if they knocked a couple hundred off their 2000/3000 lines? probably not. they're all under 5GHz anyway.
Grandparent said:
> it simply cannot bring itself to make a product that people want
It sure looks like you know exactly how Intel manages to bury their hand in the sand, not making any products people want.
> it simply cannot bring itself to make a product that people want
It sure looks like you know exactly how Intel manages to bury their hand in the sand, not making any products people want.
> "he (was) the most technically competent CEO of the last few bad apples at Intel, but he was also among the shortest"
Is this article suggesting that Pat Gelsinger may have lost his job in part because he's shorter compared to other typical "CEO types"? Are we still subconsciously judging people based on their height in 2024? Sad if true, and if not true, then it's an odd thing for the article to point out.
(Bezos is pretty short too, isn't he?)
Is this article suggesting that Pat Gelsinger may have lost his job in part because he's shorter compared to other typical "CEO types"? Are we still subconsciously judging people based on their height in 2024? Sad if true, and if not true, then it's an odd thing for the article to point out.
(Bezos is pretty short too, isn't he?)
I’m going to go with shortest as in length of time he was in the job.
Is this a joke?
He's talking about the length of his tenure.
He's talking about the length of his tenure.
The word “tenure” was left out. It took me a second to guess that.
I think this was a typo. He had the shortest tenure at 5 years. He wasn't the physically shortest guy.
Intel greatest ceo Andy Grove may not have been particularly tall... spent his childhood as a malnourished holocaust survivor
Intel greatest ceo Andy Grove may not have been particularly tall... spent his childhood as a malnourished holocaust survivor
Andy Bryant was large part of the reason Pat Gelsinger left Intel in the first place.
He has been the Chairman of the Board since 2012 and on the board as Vice Chairman for even longer. So yes, all the strategy and direction of Intel's CEO in the past 10 years prior to Pat Gelsinger can be attributed to him.
He also handpicked all the Intel CEO since Paul Otellini.
Pat was called number of times to be backed as next CEO to save Intel during and after Brian Krzanich 's era. He said "no" every time.
Pat agree to be new CEO to replace interim or later official CEO Bob Swan after Andy Bryant's announced his retirement in early 2020. Handing it over to his friend Omar Ishrak.
The share-holding part was the reason why Intel cant cut off its dividends the first thing Pat came back. They only wanted Intel to keep handing out those dividends.
And ultimately it was the Shareholders or Wall Street, handing out Board Membership to their circles until it is run to the ground.