Intel Solidifies $3.5B Deal to Make Chips for Military(bloomberg.com)
bloomberg.com
Intel Solidifies $3.5B Deal to Make Chips for Military
https://www.bloomberg.com/news/articles/2024-09-13/intel-solidifies-3-5-billion-deal-to-make-chips-for-us-military
147 comments
> you're stuck building obsolete parts on an obsolete process.
TSMC's oldest plant still in operation (Fab 2) started production in 1990. So far, the only fab they have closed is Fab 1.
Reference: https://en.wikipedia.org/wiki/List_of_semiconductor_fabricat...
Admittedly, leading-edge process is where all the excitement it, but the old fabs are fully depreciated and can remain profitable for decades.
TSMC's oldest plant still in operation (Fab 2) started production in 1990. So far, the only fab they have closed is Fab 1.
Reference: https://en.wikipedia.org/wiki/List_of_semiconductor_fabricat...
Admittedly, leading-edge process is where all the excitement it, but the old fabs are fully depreciated and can remain profitable for decades.
As another example, NAND is manufactured on 40nm and for the foreseeable future it'll be. https://thememoryguy.com/why-3d-nand-is-stuck-at-40nm/
Honestly I love that old processes are still running and old parts are still being made.
Modern SMD stuff is really rubbish for learning electronics. It's nigh impossible to hand solder because all of it is tiny af, and since it's newer it's expensive and you don't get as many attempts. Luckily there's still an immense supply of arguably completely obsolete thruhole parts that are super easy to work with, can be breadboarded and bought for basically nothing.
Modern SMD stuff is really rubbish for learning electronics. It's nigh impossible to hand solder because all of it is tiny af, and since it's newer it's expensive and you don't get as many attempts. Luckily there's still an immense supply of arguably completely obsolete thruhole parts that are super easy to work with, can be breadboarded and bought for basically nothing.
I respectfully disagree with what you say about SMD parts :)
SMD parts are much cheaper compared to THT in my experience. Which parts are you thinking of specifically?
I majored in CompSci but got my first job in embedded at a hardware manufacturer. IME it didn’t require many hours of practice to learn to solder e.g. 0603-parts. Around 4-5 hours of deliberate practice for me, although smaller can still be annoying.
I have slighty worse than average vision so personally need a magnifying glass or a microscope for 0402 and smaller, but I can do it and it looks pretty afterwards (says the HW techs).
I was about 5-6x slower than the HW techs at solder work and repair, so I didn’t solder something up every week/month. I can still mount a board easily with 0805s and 0603s even though it’s been a few years now.
SMD parts are much cheaper compared to THT in my experience. Which parts are you thinking of specifically?
I majored in CompSci but got my first job in embedded at a hardware manufacturer. IME it didn’t require many hours of practice to learn to solder e.g. 0603-parts. Around 4-5 hours of deliberate practice for me, although smaller can still be annoying.
I have slighty worse than average vision so personally need a magnifying glass or a microscope for 0402 and smaller, but I can do it and it looks pretty afterwards (says the HW techs).
I was about 5-6x slower than the HW techs at solder work and repair, so I didn’t solder something up every week/month. I can still mount a board easily with 0805s and 0603s even though it’s been a few years now.
Well there are lots of breakout/dev boards these days that do make it possible, but for something like adding an indicator LED I'd rather reach for an ol' 1/4W resistor than those ridiculously tiny SMD specks. But in general modules like the CD4051 mux, SS49E hall sensor, 74AHCT125 level shifter, etc. Cheap and super reliable stuff.
I admit I'm really crap at accurate soldering so it might be more of a me issue, but I doubt I'm entirely alone in this.
I admit I'm really crap at accurate soldering so it might be more of a me issue, but I doubt I'm entirely alone in this.
I can see what you mean. For many, it looks scary in the beginning (using tweezers etc.), but it comes quickly with practice.
It is easier than it looks IMO, though I did get some tips from our techs which likely accellerated my learning (e.g. compared to learning on your own).
With smaller (and thus lighter) parts, the surface tension helps pull the parts into place etc., so you get help on “pad-alignment”.
Hot air soldering gets more difficult though, as you risk blowing parts offboard :D
I don’t know the parts, but my experience is that everything SMD is cheaper than THT. Almost always. The hall effect sensor can likely be found cheaper in Sot23?
The only reason I ever saw for using THT parts, was the (typically) much higher power ratings.
At my previous job, a typical board with e.g. 6 layers and 500 components would have perhaps 5-10 THT parts and the rest in SMD (0805 and 0603 mostly).
YMMV and for hobbyists it doesn’t make a big difference.
SMD-soldering skills can be handy though. E.g. I’ve repaired a few of my friends’ TVs with broken backlights for pennies.
It is easier than it looks IMO, though I did get some tips from our techs which likely accellerated my learning (e.g. compared to learning on your own).
With smaller (and thus lighter) parts, the surface tension helps pull the parts into place etc., so you get help on “pad-alignment”.
Hot air soldering gets more difficult though, as you risk blowing parts offboard :D
I don’t know the parts, but my experience is that everything SMD is cheaper than THT. Almost always. The hall effect sensor can likely be found cheaper in Sot23?
The only reason I ever saw for using THT parts, was the (typically) much higher power ratings.
At my previous job, a typical board with e.g. 6 layers and 500 components would have perhaps 5-10 THT parts and the rest in SMD (0805 and 0603 mostly).
YMMV and for hobbyists it doesn’t make a big difference.
SMD-soldering skills can be handy though. E.g. I’ve repaired a few of my friends’ TVs with broken backlights for pennies.
I find SMD so much easier to work with. You just drop the parts with fine tweezers after some solder paste and apply hot air. It's also much cheaper. You can also rework without trouble in my experience. Apply hot air, lift the chip with tweezers. Remember to use lot of flux.
> Remember to use lot of flux.
Agree with your post and this part especially. More flux means easier work, but more mess to clean up when done. Flux pens are practical.
I only used hot air for removing parts, but the techs who controlled it well absolutely loved it and were insanely productive.
I solder QFP by dragging a “saturated” tip across the leads and then wick up any excess solder if needed (e.g. if I bridged/shorted a few legs).
Agree with your post and this part especially. More flux means easier work, but more mess to clean up when done. Flux pens are practical.
I only used hot air for removing parts, but the techs who controlled it well absolutely loved it and were insanely productive.
I solder QFP by dragging a “saturated” tip across the leads and then wick up any excess solder if needed (e.g. if I bridged/shorted a few legs).
well, true, but this doesn't guarantee a node to stay in production. fabs sometimes shut down a node to use the equipment and space for another node with more demand. also, sone of these machines from 80s and 90s are simply old and it's not financially viable to buy a new machine for such a process. they typically cannibalize some of the machines for parts, or even buy old machines for parts from other fabs closing down. I believe a fan requies refreshing and investment every 15-20 years.
It is not the first choice of revenue of course, they and everyone would like to be Nvidia and pick and choose the customers standing patiently in line outside the door.
However in tough times, having the culture to change and deal with customers or use cases you wouldn't prefer to survive is a good sign. AMD during the bulldozer era, had many deals they didn't like or barely made money just to survive, it paid off with Ryzen, it can happen to Intel as well. Good to see Intel branching out and trying new things to turn the ship around.
However in tough times, having the culture to change and deal with customers or use cases you wouldn't prefer to survive is a good sign. AMD during the bulldozer era, had many deals they didn't like or barely made money just to survive, it paid off with Ryzen, it can happen to Intel as well. Good to see Intel branching out and trying new things to turn the ship around.
This is nothing more than Intel joining the ranks of the other tbtf government contractors. That's how they plan to survive.
Intel has had the government as a customer for a long time. They even have a division for it (Intel Federal)
Did they manufacture military designs though? Or just sell Intel designs (with some modifications) to military?
Intel was making 386 chips for the F-22 for a looking time after they became obsolete.
I thought the F-22 initially used the i960, not the 386, but then switched to PowerPC.
[0] http://www.righto.com/2023/07/the-complex-history-of-intel-i...
[0] http://www.righto.com/2023/07/the-complex-history-of-intel-i...
386 in the F22?! Why ? Such an old chip even considering the plane was in design for years no ?
It also increases the likelihood of a secure supply chain for mil components. Seems like a win-win.
In the sense that any voluntary trade is a win-win for both parties, yes. But it is inglorious compared to where Intel was in, say, the early 2000s. It is a big change to look at market cap and see traders treating AMD as a big player, then Intel somewhere off in the also-ran territory.
So much for their monopoly.
So much for their monopoly.
I did not know intel was so short of cash it needs military money to stay afloat.
Intel is arguably on the cusp of death as the company that it was between, say, 2000-2013.
https://www.economist.com/business/2024/09/12/intel-is-on-li...
It’s pretty nuts reading The Atlantic’s piece from 10 years ago and then seeing where the company is now.
https://www.theatlantic.com/technology/archive/2013/05/paul-...
https://www.economist.com/business/2024/09/12/intel-is-on-li...
It’s pretty nuts reading The Atlantic’s piece from 10 years ago and then seeing where the company is now.
https://www.theatlantic.com/technology/archive/2013/05/paul-...
It's not about the small time military money it's about the big ticket government bailout. If they have some hooks into the military then they have, what's the term, a "moral hazard" card to freely take risk, military dependency puts them at the top of the bailout list (which they kinda were already, now even moreso)
They're not short of cash, they're short of business throughput for their fab because it's uncompetitive next to TSMC, but a lot of their chip design business relies on integration with it so they'd lose a ton of money if they went fabless like AMD and switched to TSMC.
Their long term plan is to make money via foundry/fab orders, so it makes sense to see this. But otherwise their share price is currently rock bottom because they're pouring money into infrastructure development (plus late EUV adoption) and a lot of people are sceptical it'll pan out.
They are not immediately short of actual cash per se, but they have been doing a lot of layoffs and pulling back on big ticket investments like the foundry they had planned in Germany, financial health is a top concern .
they are also loosing revenue hard in multiple segments including their core high margin enterprise server chips and also not gaining foothold in others (mobile/lower power device or GPUs)
They need fresh revenue really quickly to keep markets happy on share price which has really tanked this year, also to keep the supply chain healthy and talent motivated
Any foundary business is always in need of cash, a leading edge foundary is $20-$30B outlay minimum these days , not many companies in the world are so flush they can easily spend $30B without sweating it
they are also loosing revenue hard in multiple segments including their core high margin enterprise server chips and also not gaining foothold in others (mobile/lower power device or GPUs)
They need fresh revenue really quickly to keep markets happy on share price which has really tanked this year, also to keep the supply chain healthy and talent motivated
Any foundary business is always in need of cash, a leading edge foundary is $20-$30B outlay minimum these days , not many companies in the world are so flush they can easily spend $30B without sweating it
Seems like that facility they were supposed to build in Germany is going to be built in Poland.
losing Apple's desktop and laptop business ended up being quite a loss for them
Intel could't have done it profitably and chose to lose the business. Intel has been a cash cow business for a while, coasting on its early wins and doomed to be gradually surpassed. For shareholders seeking short and medium term value, this works out quite well.
Wise
Chips are used in a lot more than expensive, low-quantity planes.
Increasingly, every "round of ammo" has a chip in it. Every missile, bomb, single-use drone, and artillery shell has sensors and guidance. These are expended in use.
Instead of maintaining these "rounds", the military simply asks for a new, improved, and more expensive version of them, and destroys / gives away the old versions.
It's not just one country buying these, it's the entirety of NATO.
Increasingly, every "round of ammo" has a chip in it. Every missile, bomb, single-use drone, and artillery shell has sensors and guidance. These are expended in use.
Instead of maintaining these "rounds", the military simply asks for a new, improved, and more expensive version of them, and destroys / gives away the old versions.
It's not just one country buying these, it's the entirety of NATO.
What
Are
You
Talking about.
Ordnance gets expended, goes boom.
> Moreover, the military wants parts for decades, so you're stuck building obsolete parts on an obsolete process.
Intel recently built expertise in this area, so I think they are a good match.
Intel recently built expertise in this area, so I think they are a good match.
> The volume is small
That is changing with the drone warfare becoming large part of the future wars. US military (and pretty much everyone else) will make drones major focus of advancement and there is definitely lot of money to be made by supplying chips for those.
That is changing with the drone warfare becoming large part of the future wars. US military (and pretty much everyone else) will make drones major focus of advancement and there is definitely lot of money to be made by supplying chips for those.
That's an horrible business if you plan on being nimble and competitive and blow away customers with your innovations.
My read is Intel isn't going for that trajectory anymore and stabilized for markets where politics can play a larger role.
My read is Intel isn't going for that trajectory anymore and stabilized for markets where politics can play a larger role.
Intel hasn't been nimble for a while. It's a huge organisation. Makes sense to attach themselves to the military, both sides need a stable, reliable partner for a long-term relationship.
>so you're stuck building obsolete parts on an obsolete process.
"Stuck"? Generally speaking, they can charge an arm and a leg for those older parts due to small volume. When I previously worked at a company that supplied hardware for a military application, they were still buying decades old hardware at about a 10x markup from when it was still in production for the general commercial market.
Heck, in 2019 Global Foundries sold a 20 year old fab that IBM built in Fishkill to ON Semiconductor for $430m. IBM originally built it for ~$2.5B. You don't think they got their money's worth and then some? ON didn't buy it as an act of charity, they've clearly got a plan to continue printing money building chips out of that fab.
https://en.wikipedia.org/wiki/GlobalFoundries
https://www.semiconductor-technology.com/projects/ibm_fishki...
"Stuck"? Generally speaking, they can charge an arm and a leg for those older parts due to small volume. When I previously worked at a company that supplied hardware for a military application, they were still buying decades old hardware at about a 10x markup from when it was still in production for the general commercial market.
Heck, in 2019 Global Foundries sold a 20 year old fab that IBM built in Fishkill to ON Semiconductor for $430m. IBM originally built it for ~$2.5B. You don't think they got their money's worth and then some? ON didn't buy it as an act of charity, they've clearly got a plan to continue printing money building chips out of that fab.
https://en.wikipedia.org/wiki/GlobalFoundries
https://www.semiconductor-technology.com/projects/ibm_fishki...
Between ASIC and FPGA it's cheap enough to do for any (large competent) company, but choosing an enterprise is a guarantee they'll be around to ship too. Or a separate fab can be set up (or purchased from another company) to run batches of "obsolete" chips that then can be resold for washing machines and ink printer carts etc.
Modern military uses more cots and less bespoke designs because developing cutting edge custom asics is so horrifically expensive.
But also custom ASICS are no longer necessary because things are so fast and military acquisitions are much slower than commercial development: the state of the art commercial tech state of the art will go through several iterations before a single military product is released so why chase the bleeding edge?
Unless they have really classified tech like a productively useful quantum computer or something, it’s just a better idea all around to use off the shelf or very slightly modified off the shelf parts. (Feature flags, extra testing, expanded environmental margins, etc, but not total redesigns)
Unless they have really classified tech like a productively useful quantum computer or something, it’s just a better idea all around to use off the shelf or very slightly modified off the shelf parts. (Feature flags, extra testing, expanded environmental margins, etc, but not total redesigns)
> so you're stuck building obsolete parts on an obsolete process.
Isn't this what every corporate wants? Steady supply of income with no R&D, marketing, etc.
Isn't this what every corporate wants? Steady supply of income with no R&D, marketing, etc.
Keeping the obsolete process alive can be very expensive.
Could you elaborte? Maybe with illustrative example? (Intuitively it would just seem like a good thing)
Keeping a factory alive is not free. If you have committed to delivering a certain product for the next 30-50 years, you need to be able to deliver that product even in year 49. Even if it's only three parts and the factory is only profitable when producing thousands a year.
Some costs that will crop up even without investing in R&D and maintenance: - Factory maintenance. The lights need to stay on, the floors need to be swept and the bearings need to remain greased. Things like ISO and security certifications also need to be kept up to date. - The longer a product runs, the more likely it is that the original employees on the production line retire or leave for another job. This means you'll need to be able to find and train new people for a job that uses tools and methodologies no longer used anywhere else. It will probably be more expensive to hire for those jobs than for jobs where people learn transferable skills that they could use in the rest of their careers. - After 40 years, many of the components in the production machinery will be difficult to come by. A CNC machine from that time might use the (then brand new) 286 processor. If it breaks, where would you source extra 286 processors? Alternatively you can redesign the process to use up-to-date components, but that costs a lot of extra money. - Usually the demand for components drops off over time as the world moves on to something more modern. For example, demand for components of older fighter jets will slowly drop off as new airframes are no longer being built and the existing ones slowly get taken out of service. This means you'll need to spread the fixed costs of the above points over fewer and fewer components over time. - Finally, the need for R&D and marketing doesn't actually go away. If you only focus on producing (say) targeting processors for the F16, your company will go out of business at the latest when the last F16 leaves service. Your shareholders will probably not be happy about that, so it's still important to invest in gaining new contracts too.
Some costs that will crop up even without investing in R&D and maintenance: - Factory maintenance. The lights need to stay on, the floors need to be swept and the bearings need to remain greased. Things like ISO and security certifications also need to be kept up to date. - The longer a product runs, the more likely it is that the original employees on the production line retire or leave for another job. This means you'll need to be able to find and train new people for a job that uses tools and methodologies no longer used anywhere else. It will probably be more expensive to hire for those jobs than for jobs where people learn transferable skills that they could use in the rest of their careers. - After 40 years, many of the components in the production machinery will be difficult to come by. A CNC machine from that time might use the (then brand new) 286 processor. If it breaks, where would you source extra 286 processors? Alternatively you can redesign the process to use up-to-date components, but that costs a lot of extra money. - Usually the demand for components drops off over time as the world moves on to something more modern. For example, demand for components of older fighter jets will slowly drop off as new airframes are no longer being built and the existing ones slowly get taken out of service. This means you'll need to spread the fixed costs of the above points over fewer and fewer components over time. - Finally, the need for R&D and marketing doesn't actually go away. If you only focus on producing (say) targeting processors for the F16, your company will go out of business at the latest when the last F16 leaves service. Your shareholders will probably not be happy about that, so it's still important to invest in gaining new contracts too.
> Even if it's only three parts and the factory is only profitable when producing thousands a year.
If that is the case you manufacture more than enough and put them on a shelf.
> Some costs that will crop up even without investing in R&D and maintenance
Obviously. You put those costs in the contract and make the costumer pay for them.
If they want to fab 3 chips a year that is going to cost them dearly. This is not a property of the old processes. This is a property of low volumes.
If that is the case you manufacture more than enough and put them on a shelf.
> Some costs that will crop up even without investing in R&D and maintenance
Obviously. You put those costs in the contract and make the costumer pay for them.
If they want to fab 3 chips a year that is going to cost them dearly. This is not a property of the old processes. This is a property of low volumes.
You have to manufacture enough parts for if wwiii breaks out even though odds are it won't and even if it does the military will probable notewant those parts - but they might.
Ok. Built in (reasonable) assumption which I was missing - demand decreases very significantly.
If you are a company facing bankruptcy because your process technology is not competitive with world leaders like TSMC and Samsung, you resort to military work. Intel is like the Boeing of the semiconductor industry except it might be less crucial to the industry.
> Moreover, the military wants parts for decades
nothing wrong with this. Government pays for the product. The product should be serviceable whether the company becomes defunct or business shifts. At this point, military or consumer should be able to give blueprints of the parts to different manufacturer or manufacturer it themselves.
nothing wrong with this. Government pays for the product. The product should be serviceable whether the company becomes defunct or business shifts. At this point, military or consumer should be able to give blueprints of the parts to different manufacturer or manufacturer it themselves.
There are three things that already exist and address these kinds of concerns (I've removed some, but not all, color commentary, this is somewhat effective but definitely not 100%):
Data Rights - Every acquisitions contract includes data rights. The specific data varies by contract. For things like an LRU, the data rights may include schematics. This is, in theory, enough information to recreate the device but may leave out certain key proprietary pieces. Like if a 1980s era LRU had an M68k, no schematics from Motorola will be included. But the architecture is known so recreation is technically feasible. The schematics also offer a foundation for producing a like-product replacing the obsolete components, though a project like that can take years.
ICD - Interface Control Document. The device itself becomes a blackbox. Instead a description is provided, along with other requirements and spec documents, on how it behaves. The good ICDs are really enough to start a clean room project without ever needing to crack open the to-be-replaced devices. Unfortunately the good ones are rare, they often stop getting updated at some point and modern ICDs are shit compared to the documentation from last century.
COTS - DOD (and the US gov't in general) has had a major 30+ year push to go COTS as much as possible. Obviously this doesn't work for everything, but go back to that M68k example. There's no reason to ask for a custom chip when a COTS one will do. Same for other parts of major systems. Computer motherboards can be COTS (or very near) even if the chassis is bespoke to make it form and fit suitable for its intended environment. COTS, in theory, also makes it possible to do incremental refreshes more easily. Like replace that computer hardware in the custom chassis every 5 years, it's not trivial but it's a small jump and updating software components in such "short" (by DOD standards) increments is hardly onerous. In practice, updates may not happen for 20+ years which is a more substantial undertaking.
These, and other things that are supposed to be done in acquisitions, largely resolve the "What will we do in 20 years when the supplier has gone under" questions.
Data Rights - Every acquisitions contract includes data rights. The specific data varies by contract. For things like an LRU, the data rights may include schematics. This is, in theory, enough information to recreate the device but may leave out certain key proprietary pieces. Like if a 1980s era LRU had an M68k, no schematics from Motorola will be included. But the architecture is known so recreation is technically feasible. The schematics also offer a foundation for producing a like-product replacing the obsolete components, though a project like that can take years.
ICD - Interface Control Document. The device itself becomes a blackbox. Instead a description is provided, along with other requirements and spec documents, on how it behaves. The good ICDs are really enough to start a clean room project without ever needing to crack open the to-be-replaced devices. Unfortunately the good ones are rare, they often stop getting updated at some point and modern ICDs are shit compared to the documentation from last century.
COTS - DOD (and the US gov't in general) has had a major 30+ year push to go COTS as much as possible. Obviously this doesn't work for everything, but go back to that M68k example. There's no reason to ask for a custom chip when a COTS one will do. Same for other parts of major systems. Computer motherboards can be COTS (or very near) even if the chassis is bespoke to make it form and fit suitable for its intended environment. COTS, in theory, also makes it possible to do incremental refreshes more easily. Like replace that computer hardware in the custom chassis every 5 years, it's not trivial but it's a small jump and updating software components in such "short" (by DOD standards) increments is hardly onerous. In practice, updates may not happen for 20+ years which is a more substantial undertaking.
These, and other things that are supposed to be done in acquisitions, largely resolve the "What will we do in 20 years when the supplier has gone under" questions.
It's so sad to see how miserable ICDs have gotten. Some of them are just REST APIs and you are on your own to figure out what everything means, it's pathetic. The old ones, you can (and I have) interfaced with stuff from the 80s without any customer input.
(alright, it has happened though that they needed to wheel out the old-timer who was around when the hardware was originally delivered, come integration time - since the way you hook up to the thing isn't always clearly described. But the software was fine!)
(alright, it has happened though that they needed to wheel out the old-timer who was around when the hardware was originally delivered, come integration time - since the way you hook up to the thing isn't always clearly described. But the software was fine!)
Yep. The older the ICD, the better it seems to be. I miss the era of dedicated technical writers, too. We received an "ICD" from a vendor and it's just garbage. It's incomplete, for one, and kind of just ends in the middle of things and leaves out crucial details so we can't use it without reverse engineering their system. A major problem is that it appears their developers are their document writers now, and they just don't do it, either out of laziness or insufficient time (higher priority dev tasks in the queue). They've been publishing the same incomplete document for years.
Wafers come in batch sizes of a FOUP, these are the little sealed boxes you see the robots on the tracks moving around a semiconductor factory. One might only need one wafer of chips or less for a project, those other unused wafers go in storage after some testing. When the military needs spare parts, those wafers can be brought out of storage and diced and packaged (if we will even still do that in the future).
This technique is already done for things with long operational lifetimes. It would be nice if we made a distributed (geographically) wafer bank so that we will have a long supply of semiconductors, esp after a civilization scale catastrophe.
https://en.wikipedia.org/wiki/FOUP
This technique is already done for things with long operational lifetimes. It would be nice if we made a distributed (geographically) wafer bank so that we will have a long supply of semiconductors, esp after a civilization scale catastrophe.
https://en.wikipedia.org/wiki/FOUP
Interesting. But why store the somewhat unwieldy wafer instead the packaged chip? I’d imagine that doesn’t add much cost but makes storage significantly simpler.
Storing the wafers avoids paying the costs for packaging and testing in the case the chips will not be needed.
Moreover, the packaged chips typically require a much larger volume for their storage than the wafers. A wafer may contain many thousands of chips.
The wafers are normally stored in dry nitrogen, to avoid their chemical degradation during long term storage.
Moreover, the packaged chips typically require a much larger volume for their storage than the wafers. A wafer may contain many thousands of chips.
The wafers are normally stored in dry nitrogen, to avoid their chemical degradation during long term storage.
The analogy of a wafer bank to a seed bank is new to me. I would imagine the wafer bank is a bad idea, because they would just be playbooks that would lead to the collapse. So kinda pointless.
I can't read the article, and so it probably mentions this but I think this is a big case of "the past was prologue".
DOD is making a big bet that anything chip and silicon is going to be really hard to acquire past 2027.
This may be a great big gravy train for Intel.
DOD is making a big bet that anything chip and silicon is going to be really hard to acquire past 2027.
This may be a great big gravy train for Intel.
can't they just create enough for decades and stock pile it somewhere?
When I used to work in defense contracting, this is precisely what we (the contractor) did. We would buy up all available stock of any difficult-to-replace parts (often specific SBCs) when the manufacturer announced end of life.
There's a market in conforming interface and ABI spec meeting hardware to emulate the boot and upgrade devices for German tanks, or some other hardware. Sd card or USB behind, giant milspec plug to the fore.
Ben Rich talks about this being a rough spot for dealing with military contracts in the epilogue of his book, Skunk Works. I think it depends on the contract, for plane parts they did not allow for storage of parts :(
I guess they want the capacity to make planes indefinitely, if a really big war happens?
[deleted]
What normally happens is they will store a bunch of chips for the future and then shut the line down, when they need more they'd have to use a newer chip in it's place.
“Stuck making obsolete parts” sounds great. Guaranteed revenue without needing to stay competitive.
The article makes it sound like a sort of special deal, but Intel does run a foundry service now, so in theory that means that they aren't picking and choosing who their customers are -- anyone with money can buy manufacturing capacity.
It wasn't clear from what was said before the paywall whether Intel would be manufacturing products designed by the government or another third party, or if these are going to be Intel-designed products. (It's not all too out-of-the-ordinary for Intel or any other chip designer to make a variant of a product with certain application-specific tweaks for certain customers.) If Intel is designing the product, then that's a lot more than ordinary foundry services.
It wasn't clear from what was said before the paywall whether Intel would be manufacturing products designed by the government or another third party, or if these are going to be Intel-designed products. (It's not all too out-of-the-ordinary for Intel or any other chip designer to make a variant of a product with certain application-specific tweaks for certain customers.) If Intel is designing the product, then that's a lot more than ordinary foundry services.
sounds right up intels ally.
As much as we all love to dunk on Intel, it's good to have competition. Even if it's via the support of the military industrial complex, we still all benefit when there are more companies making chips (especially at home for those in the US).
I don’t like dunking on Intel. It’s one of the only advanced all American foundry left, I don’t want them gone.
Their technology deserves a lot of praise but their anti-competitive business practices should be shamed. If there was a way to separate the two i would love to see intel as a business go bankrupt but intel as a foundry live on.
Their existence seems tenuous at this point so any criticism, warranted or not could bring the whole thing down in my opinion. At that point the only place making advanced chips is the far east.
If a bit of fair criticism can bring down whole company, they are already gone. Unfair criticism can be easily debunked and any rational person will ignore it.
Market needs as much competition as possible since everybody else benefits from that, but it needs to have some solid foundations, not just wishful thinking or protectionism. if there will be a market hole, others will fill in. If you can't trust ie British or other western chips, why should rest of the world (aka 95% of mankind) trust US ones.
Market needs as much competition as possible since everybody else benefits from that, but it needs to have some solid foundations, not just wishful thinking or protectionism. if there will be a market hole, others will fill in. If you can't trust ie British or other western chips, why should rest of the world (aka 95% of mankind) trust US ones.
Eh I don’t think anyone in the states will fill the hole if intel collapses so talk of a robust market and competition is kind of moot. I feel you have to do whatever it takes to prop it up because once it’s gone it’s never coming back.
We don’t all benefit when the MIC gets more chips..
The MIC invented this communications medium.
and a Finn invented the kernel that powers the servers, a Frenchman invented the compression used in the bitstreams, and a German made the standard library/runtime that everything else stands atop: if we gave loyalty to all the inventors we're benefiting from right now it would be impossible to go to war with anyone.
You say that as if it's a bad thing.
> if we gave loyalty to all the inventors we're benefiting from right now it would be impossible to go to war with anyone.
You say as if that is some bad thing?
You say as if that is some bad thing?
and they might not have been able to without that MIC that everyone likes to dunk on
golergka(1)
Feels a bit like moving back to Mom and Dad's house.
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> The deal also reflects a lack of other options for the Biden administration: Pentagon officials have insisted on sourcing cutting-edge semiconductors from an American company, and Intel is the only US maker of advanced processors.
This is what failing to secure competition in a sector can lead to: Oligopolies are inherently risky. Good (mostly for a rent-extracting few) while the sailing is good, but not resilient in turbulent weather
While there are many factors at play when looking at the path of such a large and centrally placed corporate entity, a key aspect of Intel's decline must be the long stagnation of the Wintel era.
Intel's missing out on both the mobile and numerical computing (dont call me "AI") revolutions share this in common: they did not fit the Microsoft dominated universe / cashcow of so many decades.
Its a delicious twist plot that Microsoft seems to be escaping from that Wintel tomb of their own creation (or at least faking it well enough for a government job), while Intel needs to scrape the bottom of the barrel.
This is what failing to secure competition in a sector can lead to: Oligopolies are inherently risky. Good (mostly for a rent-extracting few) while the sailing is good, but not resilient in turbulent weather
While there are many factors at play when looking at the path of such a large and centrally placed corporate entity, a key aspect of Intel's decline must be the long stagnation of the Wintel era.
Intel's missing out on both the mobile and numerical computing (dont call me "AI") revolutions share this in common: they did not fit the Microsoft dominated universe / cashcow of so many decades.
Its a delicious twist plot that Microsoft seems to be escaping from that Wintel tomb of their own creation (or at least faking it well enough for a government job), while Intel needs to scrape the bottom of the barrel.
Ok I guess, but the survival of Intel Foundry still depends on whether their node process is competitive with TSMC. Do we know the progress on "5 nodes in 4 years" plan, is it being executed well?
(Disclaimer, I work for Intel but have no non public information about this and naturally don’t speak for them. I am a little more biased towards wishing them be successful than the average person perhaps.)
Yes, by all accounts the latest node (Intel 18a, which ought to be competitive with the latest tsmc node) is healthy and on schedule. Very Recent pronouncements by the cfo support this (I think it’s extra significant that it’s the cfo because he knows like nobody else how much hot water he’d be in if he were misrepresenting the likelihood of success).
That’s one thing I don’t understand about the Intel negativity; the whole world is lining up for tsmc (rightfully so). Either directly if you’re one of the major customers who can’t produce products fast enough to sell them (nvidia) or indirectly (if you want to buy nvidia). but the only realistic near-future competitor to tsmc isn’t seen as such, despite the great need (ie worth the time to investigate and worth the risk to try as a fab).
If the current stock price is to believed, Intel should be bought for its assets, which makes absolutely no sense to me personally. As far as I’m concerned its the only possible short term path to breaking open the silicon supply chain gridlock, exacerbated by the ai hype.
Yes, by all accounts the latest node (Intel 18a, which ought to be competitive with the latest tsmc node) is healthy and on schedule. Very Recent pronouncements by the cfo support this (I think it’s extra significant that it’s the cfo because he knows like nobody else how much hot water he’d be in if he were misrepresenting the likelihood of success).
That’s one thing I don’t understand about the Intel negativity; the whole world is lining up for tsmc (rightfully so). Either directly if you’re one of the major customers who can’t produce products fast enough to sell them (nvidia) or indirectly (if you want to buy nvidia). but the only realistic near-future competitor to tsmc isn’t seen as such, despite the great need (ie worth the time to investigate and worth the risk to try as a fab).
If the current stock price is to believed, Intel should be bought for its assets, which makes absolutely no sense to me personally. As far as I’m concerned its the only possible short term path to breaking open the silicon supply chain gridlock, exacerbated by the ai hype.
Ben Thompson has been covering Intel’s precarious position for over a decade (well before the market finally realized it) and the latest update is not looking good:
Intel’s is technically on pace to achieve the five nodes in four years Gelsinger promised (in truth two of those nodes were iterations), but they haven’t truly scaled any of them; the first attempt to do so, with Intel 3, destroyed their margins. This isn’t a surprise: the reason why it is hard to skip steps is not just because technology advances, but because you have to actually learn on the line how to implement new technology at scale, with sustainable yield. Go back to Intel’s 10nm failure: the company could technically make a 10nm chip, they just couldn’t do so economically; there are now open questions about Intel 3, much less next year’s promised 18A.
https://stratechery.com/2024/intel-honesty/
Intel’s is technically on pace to achieve the five nodes in four years Gelsinger promised (in truth two of those nodes were iterations), but they haven’t truly scaled any of them; the first attempt to do so, with Intel 3, destroyed their margins. This isn’t a surprise: the reason why it is hard to skip steps is not just because technology advances, but because you have to actually learn on the line how to implement new technology at scale, with sustainable yield. Go back to Intel’s 10nm failure: the company could technically make a 10nm chip, they just couldn’t do so economically; there are now open questions about Intel 3, much less next year’s promised 18A.
https://stratechery.com/2024/intel-honesty/
I know that post, but the problem is he is just extrapolating from history. Not a bad thing in absence of real information, but... Well, let's hope he's wrong. :-)
Thank you! I agree we should be rooting for Intel. Good luck to you and your coworkers!
Didn't they have a GPU card with 128GB of RAM?
Pretty smart move for LLMs, if they can get the software stack working.
Pretty smart move for LLMs, if they can get the software stack working.
Do you always need the most advanced chips for the military or could use an older technology generation like in industrial machines? For example, the F35 uses older chip generations.
It's mixed. But even if you stick to older generation chips, someone has to supply them which means someone has to make them. Foreign manufacturing and sourcing is a political and security headache even if you go through the hoops to show a secure supply chain and address all their concerns. I had "cybersecurity" people refuse open source project use because someone in France (an ally) had a commit. Don't let them look at the Linux kernel commits... I wouldn't want to deal with that for hardware.
Also F-35 is not something anyone should aspire to. That system, its software in particular, was a project management disaster. LM went to shifts to try to address being late to complete the software. They literally thought they could double or triple their staff to catch up, idiots had never read The Mythical Man Month apparently.
Also F-35 is not something anyone should aspire to. That system, its software in particular, was a project management disaster. LM went to shifts to try to address being late to complete the software. They literally thought they could double or triple their staff to catch up, idiots had never read The Mythical Man Month apparently.
It depends on the application. Things like terminal guidance systems for hypersonic intercept run on CPUs like an ancient MIPS R3000/4000. It doesn’t need anything more. If you are trying to do real-time processing and fusion of the F-35 sensor suite or an AEGIS system, it is extremely compute intensive and so they live much closer to the bleeding edge with regular upgrades because there is an almost unlimited appetite for more processing power if available to support capabilities.
You often see a mix of really old and really new. They only use the latest greatest, ASICs, or similar when there is an absolute advantage to be gained by doing so. The old platforms are proven and reliable so no reason to not use them if they do the job and they often do.
You often see a mix of really old and really new. They only use the latest greatest, ASICs, or similar when there is an absolute advantage to be gained by doing so. The old platforms are proven and reliable so no reason to not use them if they do the job and they often do.
Performance is a key metric of course, but reliability would seem to be an even bigger consideration. I imagine it's similar to the challenge faced by designers of equipment designed to go into space.
The elephant in this particular room is probably autonomous or semi-autonomous weapons that need edge AI acceleration. Using older chips won't be an option for next-generation weapons, I suspect.
Yes, the advanced requirements are clear but I don't think that covers all the military needs (e.g. tanks). The bottom line of my question is if this is a great business opportunity for Intel because you can use legacy chips to cover the deal which are much less expensive to produce than advanced ones. Basically, higher ROI.
The F35 program started in the early 90s.
A great deal for Intel, who undoubtedly lost huge business from Apple when they adapted ARM/Silicon a few years back.
It's a very uneducated feeling, but it feels as a new low for them. Given the ARM/AMD races that seem to have put a shadow on Intel in the past few years. Intel used to be a source of inspiration at least for me, and this makes me sad seeing them become defense contractors.
I find it hard to imagine that they weren’t before- to be honest.
Compared to AMD, Intel is distinctly a “US” corporation, outside of that image they have large R&D centre's in Israel.
US corporations that deal with the military very often have a similar setup.
Lots of talk about Intel running their own fabs is taken with a “National Security” mindset, and, isn't it the large “too big to fail” corporations that end up very close to government anyway, even if they are very removed from being the best? Oracle comes to mind.
Compared to AMD, Intel is distinctly a “US” corporation, outside of that image they have large R&D centre's in Israel.
US corporations that deal with the military very often have a similar setup.
Lots of talk about Intel running their own fabs is taken with a “National Security” mindset, and, isn't it the large “too big to fail” corporations that end up very close to government anyway, even if they are very removed from being the best? Oracle comes to mind.
Why is Intel more American than AMD?
American CEO instead of Taiwanese American
Consider that most people born outside of the USA are not eligible for military clearances despite being US Citizens
In this respect, the DoD would likely prefer the most “American” company possible, I.e with buy America provisions.
Consider that most people born outside of the USA are not eligible for military clearances despite being US Citizens
In this respect, the DoD would likely prefer the most “American” company possible, I.e with buy America provisions.
Mostly marketing/branding, but also that AMD is using TSMC of course.
If you asked someone not in tech "which one is american" out of AMD and Intel, they would say Intel; despite the "A" in AMD literally standing for "American"...
If you asked someone not in tech "which one is american" out of AMD and Intel, they would say Intel; despite the "A" in AMD literally standing for "American"...
Another too big to fail handout by the US government.
This on top of all the too big to fail money for them
to prove once again that they dont know how to build
modern fabs. (Unless Taiwan does most of the work)
> The secretive program, called Secure Enclave
Not to be confused with Apple's Secure Enclave, which is also chip-related. They could have picked a more unique name I think.
Not to be confused with Apple's Secure Enclave, which is also chip-related. They could have picked a more unique name I think.
The program could've been named Secure Enclave before apple named their thing Secure Enclave, due to the program's "secretive" nature.
Apple running with the generic term was kinda silly. Secure enclave was literally the academic term to describe things like sgx.
I'm not recommending anything but I've been investing in $INTC for a while now. Your doubt and dismissal of it is exactly why the price is down. 10 years ago, I bought $AMD at $2.50 on the same hunches.
Do with this information what thou whilst.
Do with this information what thou whilst.
I’m in the same boat. The only thing that worries me are reports about a dysfunctional engineering culture here on Hacker News. I’ve seen big companies succumb to this and never recover. Any thoughts on this aspect / risk?
I agree. These red flags have been at Intel for 15 years. It's why I shorted them a few times.
Basically their chips don't suck, they're still selling them in large volumes, they still own the market, amd has had supply issues ... Intel is not in the same places that Sun, DEC, and Yahoo were.
I mean look: https://www.pcgamer.com/hardware/processors/intel-is-still-t...
Intel is 78% of the market, AMD is 13% but AMD has a marketcap of over 3x on Intel?! Hrmm. Sounds like some correction is going to happen soon and it's probably with the one trading at $19.
I know they bombed on mobile, but so did Microsoft. I know RISC V, loongson and ARM are vying for marketshare, but various architectures to unseat Intel's dominance have come and gone for 40 years.
Seeing a 3x return on intc in the next 24 months is fiscally more possible than it is for securities like the $3TB market capped NVIDIA. But yes, crystal balls are impossible and my name is not Warren Buffet.
Basically their chips don't suck, they're still selling them in large volumes, they still own the market, amd has had supply issues ... Intel is not in the same places that Sun, DEC, and Yahoo were.
I mean look: https://www.pcgamer.com/hardware/processors/intel-is-still-t...
Intel is 78% of the market, AMD is 13% but AMD has a marketcap of over 3x on Intel?! Hrmm. Sounds like some correction is going to happen soon and it's probably with the one trading at $19.
I know they bombed on mobile, but so did Microsoft. I know RISC V, loongson and ARM are vying for marketshare, but various architectures to unseat Intel's dominance have come and gone for 40 years.
Seeing a 3x return on intc in the next 24 months is fiscally more possible than it is for securities like the $3TB market capped NVIDIA. But yes, crystal balls are impossible and my name is not Warren Buffet.
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AMD market cap is (probably mistakenly) based on AI not legacy x86 CPU sales.
You mean the thing that AMD has no software support for but Intel has tons of support for?
I wonder how Intel engineers feel about this. Maybe this is the final push to seek greener pastures.
Some, sure. Most either won't care or will actively welcome it. Of those that stay, a minority will request to not work on DoD projects, which are requests that will almost certainly be granted.
There are much, much larger reasons than that to leave the company. For example: their inability to say "Hey, we're going to be losing money for a while, so bear with us. Sorry that we can't prop up the share price with stock buybacks.", instead laying a bunch of people off and cutting penny-ante perks and not-penny-ante benefits to "right the ship".
There are much, much larger reasons than that to leave the company. For example: their inability to say "Hey, we're going to be losing money for a while, so bear with us. Sorry that we can't prop up the share price with stock buybacks.", instead laying a bunch of people off and cutting penny-ante perks and not-penny-ante benefits to "right the ship".
link: https://www.militaryaerospace.com/computers/article/16710194...