r/technology • u/Sea_Guava6513 • Jan 27 '23
Intel's 'historic collapse' set to erase $10 billion from market value Business
https://www.reuters.com/technology/intels-historic-collapse-sparks-selloff-chip-stocks-2023-01-27/?taid=63d3fd3ff6f20a0001589307&utm_campaign=trueAnthem:+Trending+Content&utm_medium=trueAnthem&utm_source=twitter1.6k
Jan 27 '23
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u/krom0025 Jan 27 '23
Yes, but "Intel sees correction in revenue after covid" doesn't get as many clicks so they have to sensationalize.
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u/Dogcatnature Jan 28 '23
The true headline is that it's still January somehow
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u/mortalcoil1 Jan 28 '23
In my mind, its still March 2020.
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u/dialate Jan 28 '23
20 years ago was 1980
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u/mortalcoil1 Jan 28 '23
Holy fucking shit!
100%, when I first read that, my literal first thought was, "Yes, what's your point?"
As in, I thought you were literally correct.
Then I did the math and felt dread.
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u/Kreth Jan 28 '23
Remember people born 2005 are this year becoming 18 and joining the workforce with us.
I started university in 2004...
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u/FartingBob Jan 28 '23
How will those poor shareholders survive :((((
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u/PoopnEvryDay Jan 28 '23
I'm a big spooky share holder. They pay dividends. A ~5% dividend.
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u/petrolly Jan 27 '23
$10B of market cap for Intel is only about 8%. This isn't a collapse. It's a correction. 40 to 80%? That's a collapse.
Heck,amazon has "collapsed" about 50% in the past 18 months. Not many stories about that.
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u/Doggleganger Jan 27 '23
When stock goes down, it COLLAPSES.
If you say something bad, you have SLAMMED.
If there's disagreement, it's a WAR.
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u/nelsonblaha Jan 28 '23
Reddit Comment BRUTALLY DESTROYS hyperbolic headlines!!!
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Jan 28 '23
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u/ArenjiTheLootGod Jan 28 '23
I don't know why but, for some reason, anytime a journalist uses the words "claps back" in the title of an article I feel just a little embarrassed. Kind of like when your Mom tries out some new slang she heard from a song on the radio, somewhere around that level.
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u/Sweaty-Willingness27 Jan 28 '23
LootGod UNPRECEDENTEDLY MORTIFIED by journalists, BRUTALLY MURDERS all of their mothers
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u/Distinct_Target_2277 Jan 28 '23
This is the absolute best way to mock your children if you want to embarrass them in front of their friends. Just throw a little "it's bussin" "fo real do" or "that's lit" every here and there.
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u/wheat_beer Jan 28 '23
SLAM, BLASTS, DESTROYS
Translation: Disagrees with. Or at worst, rebuked.
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u/Guywithquestions88 Jan 28 '23
If you say something bad, you have SLAMMED.
I'm fairly certain they fire all the journalists who don't use the word SLAMS somewhere in the headline of every political article.
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u/CreativeGPX Jan 28 '23
It's also worth noting that this "correction" is expected. During the pandemic and quarantine cloud services skyrocketed. Intel is dominant in that area so it also had tons of sales. Now, that's going away back to normal.
The issues with our tendency to look at year-on-year stats is that sometimes a totally normal or good year could look bad only because of some really exceptional thing that happened the year before. The fact that Amazon, Google and Microsoft are laying people off doesn't mean the tech industry is declining. It means that the past couple of years these companies were artificially inflated due to how they were uniquely positioned to capitalize on the pandemic situation.
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u/Cryect Jan 28 '23
Yeah, the layoffs are a small fraction of the amount all the major tech companies hired during COVID. Been good for smaller tech companies to be able to hire more easily after hiring freezes at tech companies last year.
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u/amazinglover Jan 27 '23
There have been tons of stories on Amazon and their "collapse".
They are in the same situation as Intel though not a market correction but an overexpansion correction as they expected online sales to remain as is once every opened up.
Guess what Amazon people still love to shop on person and they all realize Alexa sucks.
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u/petrolly Jan 27 '23
I'm being sarcastic using the word collapse. This is hyperbole in Amazon's case wrt their business. No credible articles about an actual collapse in their business. Their share price, yes that has collapsed but to keep it in perspective they're still worth about a trillion. With a T.
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u/amazinglover Jan 27 '23
I figured as much since you put quotes around yours it was why I used the same.
Just like this Intel article none of these business are "collapsing" soon.
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u/norieeega Jan 28 '23
Also it means exactly zero for the company in terms of actual production and profitability. It only means stock holders buy and sell shares at a different price.
People that bet on how much other people will bet in the future are upset that their bets didn't follow through.
Remember, kids. Short term investors are parasites and scavengers. All they want is buy stock cheap and sell it more expensive. They don't give a fuck about what they buy and sell as long it makes them money. They don't care if what they do tanks the company. All they care about are their own short term profits. No matter how many other people they fuck over in the process.
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u/wampa-stompa Jan 27 '23
Got you to click on the article though
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u/RogueJello Jan 28 '23
$10B of market cap for Intel is only about 8%. This isn't a collapse. It's a correction.
Not only is it a correction, it's one that's happened to Intel just about every earnings release for the past 8-10 quarters over and over again.
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u/Vince1128 Jan 27 '23
From the article:
The company has been steadily losing market share to rivals like AMD, which has used contract chipmakers such as Taiwan-based TSMC (2330.TW) to make chips that outpace Intel's technology.
"AMD's Genoa and Bergamo (data center) chips have a strong price-performance advantage compared to Intel's Sapphire Rapids processors, which should drive further AMD share gains,"
It looks like Intel should reconsider the way they're doing business and how they're trying to reach their users.
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u/ActualSpiders Jan 27 '23
Well, until bad decisions and poor management start hurting senior executives _now_, instead of hurting the company _five years down the road_ after the execs have all moved on to bigger paydays, there's no reason to stop making bad decisions.
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u/Reasonable_Ticket_84 Jan 27 '23
Well they just replaced their CEO in 2021 who was nothing but a beancounter with no background in semiconductors and put in a guy who actually knows semiconductors. The problem is the damage is done and will take years to sort out.
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u/ActualSpiders Jan 27 '23
IIRC Boeing had a similar problem leading to their 737Max disaster - CEO and senior leadership had been engineers with operational experience, replaced with an account, who was replaced with an accountant... they ran the company purely for short-term profits, cut corners, ignored design flaws & risks... then their planes started falling out of the sky.
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u/d01100100 Jan 27 '23
They had 2 successive CEOs that were brought up with Jack Welch's "GE Way". When they finally elevated a CEO (Muilenburg) who had come up through the ranks as an engineer, he took the blame for the 737MAX and was fired. The majority of the decisions that lead to that disaster were made by his predecessor (McNerney).
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u/tas50 Jan 27 '23
I'm glad the business world is finally starting to realize that maybe just maybe Jack Welch was an idiot.
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u/the_stormcrow Jan 28 '23
Dude just acquired enough other corporations/holding companies to bury losses in/under capitalize until he stepped down. Then the reckoning came due.
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u/Sanpaku Jan 28 '23
Welch saw that financing was the major profit center, and thought product wasn't as important.
Alas, without product there's little to finance.
The core competency of GE was engineering, all the way from jet turbines to consumer countertop appliances. When the accountants and MBAs became the leaders, profits temporarily increased, but a lot of the core competency was lost.
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u/GilgameDistance Jan 28 '23
And a colossal asshole too. Like more than most CEOs.
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u/Not_FinancialAdvice Jan 28 '23
David Gelles recently wrote a book about Welch and the far-reaching effects his influence have had on American business.
https://www.simonandschuster.com/books/The-Man-Who-Broke-Capitalism/David-Gelles/9781982176440
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u/cougrrr Jan 27 '23
Seems like a great plan though. The one thing everyone knows is that Jack Welch's mindset of infinite growth capitalism is both sustainable and humanly possible. I mean providing more value for the shareholders, forever, to an infinite degree, certainly isn't mathematically impossible or anything. I mean we'd never base our entire economic system on something that cannot literally be done by humanity because that seems like an insane way to wildly swing from rapid growth to layoffs and recession in some sort of pattern that would make those occurrences more and more likely and happen more and more frequently.
We'd definitely never do that in our country, in which your healthcare access is directly tied to your employer in most cases.
And Boeing, the company that took billions in tax subsidies from the state they were formed in for decades, would never fall into that trap and then run to Chicago for tax breaks at the drop of a hat. And then leave Chicago as soon as that deal was up. They'd also never move major plane manufacturing like, I don't know, the 737 MAX to overseas plants and South Carolina. They'd never let manufacturing of those planes get so bad that airlines started to refuse delivery until they had to pay to ship entire planes from South Carolina back to Everett, the plant they said they didn't need, so the planes could be fixed for delivery (because that was cheaper than just paying workers in the first place).
None of this would ever happen under Jack Welch's guidance for sure.
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u/lyzurd_kween_ Jan 28 '23
You forgot to plug in that this is underpinned by constant population growth so it’s technically not all a Ponzi scheme yet
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u/Ivebeenfurthereven Jan 28 '23
That sounds great. How many more humans can the planet take?
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u/Bebilith Jan 28 '23
I think the humans have already independently called that and decided for themselves.
Falling birth rates everywhere.
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u/Toast_Sapper Jan 27 '23
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u/Coliver1991 Jan 28 '23
I saw that recently, its absolutely mind-boggling that James McNerney and Dennis Muilenburg aren't in prison. Their actions led to the deaths of 346 people.
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u/Xalbana Jan 28 '23
Hey, if you want to commit mass murder, become a CEO. They'll fine the company or the company will settle with the victims.
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u/National_Yogurt213 Jan 28 '23
Executives have designed an economic system where they elevate each other and protect each other above us peons
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u/Benny-Harvey Jan 28 '23
You only get in trouble if you try fuck over other rich people like Elizabeth Holmes did
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u/Aaod Jan 28 '23
Steal a million dollars from someone and you are criminal scum who goes to prison. Steal a dollar from a million different people and you are just a smart businessman.
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u/jigsaw1024 Jan 28 '23
Hey, if you want to commit mass murder
for profit
If you do it for funsies, that will still more than likely get you in real trouble.
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u/bigforknspoon Jan 27 '23
Thanks! I just commented about this documentary and that I couldn't remember the title.
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u/mju9490 Jan 27 '23
Yep. It pretty much all started going downhill for Boeing after they merged with McDonnell Douglas back in the late 90s.
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Jan 27 '23
Boeing had engineers in leadership
McDonald Douglas had beancounters
both showed in their quality history
Boeing and McDonald Douglas merged. They kept Boeing's name, kept MDD leadership.
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u/doyletyree Jan 28 '23
Hurts just about everywhere it’s applied. I’ve worked in the resort industry and I’ve seen good outfits Get saddled withMBAs who know only the bottom line and the experience goes downhill dramatically.
Worst is being in place while this is happening and trying to explain to the bean counter why things don’t work operationally verses on paper. Awful.
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u/0pimo Jan 28 '23
Big part of Boeing's problems started after they merged with McDonnell Douglas.
Boeing was always an engineering first type of company, and the Mickey D's management that took over post merger only gave a shit about share price.
My father worked for Lockheed and helped design the L-1011. He absolutely refused to fly on anything McDonnell Douglas built because he thought their designs were garbage and unsafe.
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u/AgentTin Jan 28 '23
This is what happens everywhere. Eventually the MBAs take over and destroy the company for profit, it should be illegal, both the practice and MBAs.
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u/bitchSphere Jan 28 '23
following the ‘97 merger with McDonnell Douglas. MD bean counters took the helm and two decades of that leadership lead to the disaster. But hey, the MD acquisition let Boeing cash in on the military industrial complex teat they had been missing out on.
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u/new_refugee123456789 Jan 28 '23
McDonnell Douglas bought Boeing with Boeing's money and, speaking as a flight instructor and aircraft repairman: Just drive.
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u/stormrunner89 Jan 28 '23
Or how hospitals used to be owned by physician groups, but are now owned by investors that want profit and don't really care about patients.
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u/SoleilNobody Jan 28 '23
Don't forget the Catholics who will insist you receive healthcare adherent to their religion only, they own a lot of hospitals too.
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u/average_zen Jan 27 '23
100% this. Horrible things happen to innovation based companies when the bean-counters take over.
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u/Swift_Koopa Jan 27 '23
Boeing comes to mind
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u/d01100100 Jan 27 '23
And Southwest Airlines.
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u/Long_Educational Jan 27 '23
After reading the accounts from Southwest Airlines pilots on how the previous CEO failed to make investments in IT reservation and workforce management systems for 8 years straight while extracting wealth for the C-suits, it was clear what had happened.
What was unexpected was hearing a podcast a few weeks back from NPR of all places, that was obviously written as a PR damage control press piece. Straight up shilling for Southwest. I didn't know NPR did that kind of work. So much for thorough investigative journalism from NPR.
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u/tas50 Jan 27 '23
It's really night and day when you compare it to airlines that saw the writing on the wall and embraced technology. Alaska went all in and quickly rolled out things like custom apps on ipad/iphones for pilots/flight attendants and even e-ink based baggage tags. Southwest took that same $$$ and pocketed it hoping it wouldn't impact the business. We saw how that ended up.
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u/SevenandForty Jan 28 '23
United of all airlines is actually pretty good at it too; their app is one of the best of airlines out there and their on time performance has improved a lot since the early 2010s IIRC
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u/ccb621 Jan 28 '23
Are you sure the podcast was from NPR? The Daily (from The New York Times) did an episode that most felt was heavily influenced by a PR team: https://www.reddit.com/r/Thedaily/comments/1087ism/the_southwest_airlines_meltdown/.
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u/bigforknspoon Jan 27 '23
I saw a documentary a few years ago that I wish I could remember what it was called. I think it was about Boeing and I remember one line said that, I believe, one of the founders in the board room looked to his left and saw all accountants and looked to his right and saw all lawyers and then he knew all innovation was dead.
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u/LinkFast719 Jan 27 '23
I worked for Spirit Aerosystems (former Boing company) and heard how they wen from an engineering based company to essentially a general contractor farming everything out to the lowest bidder. That did not work well for them.
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u/Missus_Missiles Jan 28 '23
Also did time with Spirit, a year after the divestiture.
Spirit got a lot of bloody noses on those early non-boeing contracts because they didn't know how to bid jobs. "When we were still Boeing Wichita, we could just put in pricing estimates for work, win it. And if we ran over, it didn't matter. It was all internal fab/assembly. We got paid."
They learned pretty fast though when those early jobs stung. Their pricing was meant to be competitive. But not that competitive.
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u/dman928 Jan 27 '23
McDonnell-Douglass bought Boeing with Boeings money.
They used to be engineering focused, now they pander to the stock market and almighty share price
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u/Strykker2 Jan 27 '23
still no idea who thought that was a good idea, boeing buys MD, because MD is kinda failing, then puts MD management in charge of Boeing, and somehow doesn't expect to follow the same path as MD...
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u/dman928 Jan 27 '23
Iirc that purchased them for their military contacts. But I never understood how the MD people ended up in charge. They lost all trust after the DC-10 fiasco
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u/tankerkiller125real Jan 27 '23
Rule one if you have investments in a company that replaces the CEO with a bean counter.... Sell, sell every last dime you have in them and invest elsewhere. Even if you temporarily gain money 4 months into the CEO you will lose money in the long term.
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u/corgi-king Jan 27 '23
The stock price will be high for awhile. Then the long term effects will show, like 737 Max. Same thing happened to mass layoff, stock goes up and shit will show in few years.
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u/snubdeity Jan 27 '23
He's a piece of shit but Elon Musk had a great article about this years ago, about how the "MBA-ization" of every industry is hugely detrimental to America
Planet money also had a podcast not to long ago about why MBAs suck
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u/appsecSme Jan 28 '23
But the Musking of industries also sucks. I don't see how he's any better than the MBAs that he railed against.
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u/gomer_throw Jan 28 '23
Sounds like he's implemented many of the same cost-cutting measures at Twitter that these MBA guys do
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u/sowhyarewe Jan 27 '23
This is the final fallout from decisions under Krzanich. Shaw the ex CFO just maintained the direction, I don’t think he wanted the job. Still swinging to a loss and guidance like that is quite a feat.
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u/Turbots Jan 27 '23
Can confirm that patrick gelsinger is a genius and great leader, but he has such an immense challenge ahead of him. They fucked up Intel good.
He is the guy that helped design and buils the 386 chip i think, he's incredibly smart, kind and does what he says.
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u/BlueCoatEngineer Jan 28 '23
I got to meet him when I was a baby engineer close to twenty years ago. We had a box-o-FPGAs system we were using for presilicon testing and he stopped by to check it out. I remember him nerding out over it and asking tons of great questions about how it worked under the hood. I considered going back to that shitshow when I saw the news that he’d been made CEO. Luckily, their hiring team is as bad as it was when I was there. They called me back for an interview the day I started for their competition. :-)
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u/Bay101Casino Jan 28 '23
This is a story as old as time itself.
Intel has dropped hard after every earnings report. It doesn’t matter if Intel was in the glory year v1, v2, v3 or the doom eras v1, v2, or present.
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u/nubbiecakes_ Jan 27 '23
The problem is the damage is done and will take years to sort out.
Isn't that just proving the point made in the comment you replied to? The Ceo who knew nothing didn't have to deal with the fallout of his actions, he moved on already.
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u/Zomunieo Jan 27 '23
Up till 2005, every Intel CEO was drawn from the manufacturing department, which makes sense for a company whose business is making the most complex type of manufactured product in the world.
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u/punninglinguist Jan 27 '23
Fortunately, Congress is very much in the mood to prop up American chip manufacturers, as part of our new Cold War with China.
The incoming CEO will probably benefit from generous tax breaks and subsidies.
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u/BentPin Jan 27 '23
Don't forget about the Intel CEO before the bean counter. He had a very busy schedule of banging his female employees while AMD had just released the first Ryzen processor that would go on to wreck Intel in both the consumer and Data Center Space.
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u/dravik Jan 27 '23
Honestly, banging his secretary doesn't have much impact on how he managed long term technical risk.
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u/Local_Debate_8920 Jan 27 '23
I would say it shows he doesn't manage long term risk well.
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u/Annihilator4413 Jan 27 '23
The current execs will 'retire' and move on to another big tech company
to run into the groundI mean... 'manage', leaving the problem for the next execs.20
u/-The_Blazer- Jan 27 '23
Senior executives are never actually hurt by their bad decisions. I've never heard of a CEO becoming destitute and homeless as can happen to normal people when a company goes under and lays off everyone. It's one of the reasons why shit like the 2008 crisis happen - the people who are responsible for destroying the economy never feel any of the effects.
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u/gburdell Jan 27 '23
Every single executive except Sandra Rivera has turned over in the past 2 years, including the BOD chairman
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u/noskillsben Jan 27 '23
investors who are in it for the long run need to demand that from executives instead of demanding quartly growth. I mean if you wan that, or you could just demand unsustainable high profit growth and sell when the consequences are near.
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u/billyions Jan 27 '23
Shareholders (of all companies) should demand transparency and accountability.
Citizens should demand it of our political, policing, and community solutions as well.
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u/CmdrShepard831 Jan 28 '23
That's exactly what they're dealing with now from Brian Krzanich and Bob Swan. The current CEO has an engineering background and is actually trying to right the ship by spending money on employees and tooling rather than spending all their cash on useless efforts like stock buybacks. The article's claim is also pretty overblown as the share price has been hovering around $28 for months and only dropped a dollar (from $29 to $28) after this announcement. The 'historic collapse' happened several quarters ago when shares fell from their typical ~$50 price they'd been sitting at for years.
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u/G_Morgan Jan 27 '23
It is just the Intel boom/bust cycle:
Make a really good processor
Push AMD towards non-existence
Continue to make more or less that exact same processor for 5 years with minor adjustments
Panic when AMD make a processor that blows yours away
Lose market share
Make a really good processor
I actually think Intel might be at 6 right now. Their latest desktop offerings don't look terrible next to the AMD ones at least which they did when Ryzen shipped.
Still a long way to go on server market though
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u/blearghhh_two Jan 27 '23
They've always had their process and fab to back then up though, which were always at the top of the heap. If they were a bit behind on their processor design it meant they had work to do in order to catch up but their fabs were as good or better than anyone elses.
Then they bet on the wrong horse when patterns got smaller than the wavelength of light they were using to etch. Intel looked at the market around extreme ultraviolet lithography (EUV), which most companies had given up on, and bet the farm on being able to get to where they needed with multipatterning. TSMC committed to the company that was still working on EUV lithography - ASML.
Then ASML pulled off everything they said they were going to be able to with EUV, TSMC looked like geniuses and Intel was stuck with delayed nodes, low yields, and no headroom on their designs.
So they've boarded the EUV train now, and are trying to catch up, but they're in a situation they've never been in before:. Their designs are behind and their process is behind. It's not going to be easy to recover.
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u/sowhyarewe Jan 27 '23
They didn’t choose multi-patterning, it’s more expensive and harder to get yields. They had no choice, the process to make Intel architecture was not working in EUV. Intel invested $4B under Krzanich in ASML. TSMC’s process must have fewer or simpler critical layers needed for EUV and maybe some better tool selection in etch.
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u/topdangle Jan 28 '23
EUV was not ready for the WILDLY unrealistic schedule they had under Krzanich. They wanted > 2x density node shrinks back to back in 4 years, hoping for 10nm around 2016, when it took about 3 just to pull off a proper performing 14nm node, and then another 4~5 to pull off a proper 10nm (now intel 7) without EUV.
It wasn't until around 2019 that ASML had a good handle on producing EUV machines and TSMC was first in line to purchase mass quantities while intel and samsung were wary due to the huge delays in the past and the high operating costs of EUV. Now TSMC has the most EUV machines by far, allowing for more EUV layers while keeping production volume high, but even TSMC had to cut down on layers and density to hit production targets on 3nm.
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u/sowhyarewe Jan 28 '23
I can tell you that Intel had at least 10 of those in D1 (represents a billion dollars or so). That’s enough for several thousand wafer starts a week if the machines were reliable, which they weren’t. If anyone has interest in learning about EUV and seeing the inside of a fab, Engadget did a great video 2/21 on YouTube.
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u/cyrfuckedmymum Jan 28 '23
Intel uses a similar number of layers with their planned EUV. The simple fact is with EUV you can use less layers anyway and only the most critical layers used quad patterning to begin with. When double or tri patterning is quicker and produces accurate enough results on lower layers there is no reason to use EUV.
EUV wasn't ready at all in 2017 when Intel tried to aim for 10nm to be ready, it WAS ready for 2020 when TSMC started using it and when Intel finally got 10nm out but on far worse yields.
It also wasn't just quad patterning at all, they had major issues with cobalt and their gate design. If EUV was the only issue they could have installed EUV and jumped to 7nm quickly once EUV was available, they can't because that isn't their only issue.
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u/kilkenny99 Jan 27 '23
I wonder to what extend TSMC's business model just gives them a built in advantage when it comes to innovating & advancing their processes.
ie: Does TSMC have a built-in advantage over Intel since they build chips for practically *everyone*, while Intel only manufactures for themselves? TSMC is doing all sort of designs, chip architectures, etc, and have more different/diverse production lines going on at the same time. So there is all this parallel learning & cross-pollination of manufacturing tech and knowledge going on within the company. So they make more constant, iterative improvements because with all these varied chip clients they're iterating way more often.
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u/BaneOfAlduin Jan 28 '23
It’s a double edged sword now. Nodes have gotten small enough that fundamental physics are becoming issues rather than size/density.
Because of this, most nodes are being designed specifically AROUND the products it will make. In broader terms, we will start seeing node shrinks designed around density, energy/thermal, or speed. You can probably get size-able leaps in 1.5-2 of those categories but not all 3 anymore. This would cause say a node designed with higher density and speed getting focused towards CPUs/gpus compared to density and energy going towards memory or highly efficient, low power CPUs
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u/Dragon_Fisting Jan 27 '23
it's because Intel owns its fabs. AMD spun off their foundries decades ago, and they are reaping the benefits. Independent foundries compete with each other, so they invest heavily in R&D to get an edge. Intel was having trouble for years getting their node size down but never allocated enough resources into doing it because they were still kicking AMD's ass.
AMD made a lot of positive changes in their side, but they benefited massively from being able to just order their chips from TSMC, who was able to outdevelop Intel thanks to all the money pouring in from Apple and the other phone manufacturers. All of a sudden AMD was on the same performance footing without having to spend all that R&D money themselves, and now even Intel is ditching their own foundries for TSMC on the GPUs and most of the latest CPUs.
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Jan 27 '23
Just something to keep in mind with the current political climate.
AMD’s benefit could become a nightmare if China decides to go after Taiwan. It would touch Intel a bit too(arc gpus), but it would absolutely devastate AMD since they are fully dependent (GloFo doesn’t make that much of their current lines) on TSMC.
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u/Due-Woodpecker6586 Jan 27 '23
If Taiwan gets invaded the tech industry is fucked. Intel could still make processors, but they won't have boards or laptops to put them in.
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u/Anleme Jan 28 '23
Everything everywhere is fucked if Taiwan gets invaded. The US imported $36 billion from China & $7 billion from Taiwan just in Nov-2022.
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u/Chemmy Jan 27 '23
TSMC is building fabs in Arizona. Their first fab will be producing their N4 process in 2024 there.
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Jan 27 '23
Yep, Intel also has a couple more coming up. Issue is the building is slated to be done in 2024 assuming no issues. Then you have staffing and training, which is up in the air. Maybe 2026 for latest fabs (5&3nm) so it’ll be a bit to get them to scale and full output.
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u/wampa-stompa Jan 27 '23
Why do you think we have the CHIPS Act, TSMC is building a fab in Arizona.
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Jan 27 '23
That’s going to be years from now. Building slated to be done sometime in 2024 (according to TSMC) then you have staffing and training. After that they have to get operations running smoothly to get full output. I’ve guessed in another reply 2026 at earliest, but may be longer than that. We just don’t know. What we do know as of now is AMD has threat to their business they can’t control.
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u/pmotiveforce Jan 27 '23
Not just that, but they are dependent on competing with all the other companies making any kind of high end chip. Single sourcing your entire product from another company and putting yourself entirely at their mercy can obviously be dangerous.
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u/notFREEfood Jan 27 '23
Your argument is entirely recency bias. For a good chunk of time after AMD spun off its fabs, Intel was smoking everyone on process node technology; every other chip generation had a process node improvement (the tick-tock cycle), and this combined with AMD flubbing with Bulldozer gave Intel a dominant position. Back before Intel ran into issues with developing their process node tech, people said Intel's integrated approach was superior because it guaranteed access to the best process node on the market.
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u/happydemon Jan 27 '23
Regarding consumer processors they definitely seem to be catching up.
I went AMD for my latest rig but after the fact, I realized that Intel was on par or better at lower cost than AM5, at least prima facie. I was pretty surprised.
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u/kaplanfx Jan 27 '23
Intel single core performance is still better. That used to matter the most to gamers but it is becoming less relevant over time as games and game engines become much more multi-threaded.
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u/Spot-CSG Jan 27 '23
This has been being said since my phenom II 6-core lol. You aren't wrong but I'm just saying.
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u/stormdelta Jan 28 '23
The difference is that AMD's per-core performance is competitive with Intel now, and has even surpassed it at a couple points though I think Intel's been ahead more often than not still. Most games do use multithreading to some degree now, but even low-end chips these days are at least 4-6 cores so it's a bit of wash.
The new high cache chips AMD has are also complicating things, as some things very disproportionately benefit from it, notably a lot of games.
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u/happydemon Jan 27 '23
Agreed and this made me consider Intel because heavily modded Skyrim is a favorite gaming choice for me. It tends to run the Papyrus scripting engine better on Intel systems because of its single core performance. Ditto for Total War games. Anyways I haven't upgraded in 5 years and I figured it didn't matter at this point because the game is so old.
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u/MrShadowHero Jan 27 '23
i think you are making the better decision. amd chips are at what 165W max? the new x3d's are 125w? meanwhile intel chips have been pushing the power usage up to increase performance. its like going from a v4 to a v8 car engine. well now the v4 has a turbo and a cold air intake on it and its keeping up with your v8, and they can still toss on those 4 more cylinders IF THEY WANT TO.
amd's chip performance still has a lot of room to grow for what their current design style is. intel is already pushing the limit of what can actually be handled by a cooler, sometimes pushing past that already. this gen or next gen is the last we will see intel keeping up with AMD's chiplet design unless intel completely redesigns how they do their chips from the ground up, but that is something that will take several YEARS for them to do
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u/9-11GaveMe5G Jan 27 '23
You mean higher cost for same or worse performance isn't a compelling sell??
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u/LoganGyre Jan 27 '23 edited Jan 27 '23
It works for Apple!
Edit: holy fuck apple bros it’s a joke i used my iPhone to send it just laugh and move on.
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u/EscaperX Jan 27 '23
apple doesn't sell performance. they sell their ecosystem.
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u/duranarts Jan 27 '23
I’m actually kind of glad this is news. For a long time, Intel just wasn’t innovating and only released incremental changes. I have purchased my last three AMD processors for the past years. This data just shows how powerful and necessary competition can be.
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u/mapoftasmania Jan 27 '23
Key issue here is that offshoring chip production is a national security issue. Intel is part of an active DoD program to make more chips in the US.
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u/MzFlux Jan 28 '23
This comment needs more attention.
For more than one reason, even.
Here’s a brief review through short term memory:
The House’s CHIPS for America act Pelosi’s visit to TSMC created quite the stir with Chinese relations The Dept of Homeland Security issued warnings against buying Chinese made hardware due to concerns of spying.
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Jan 27 '23
Nobody is collapsing. These corporations can play petty games between one another, but these chip manufacturing companies are far too important and crucial to the world as a whole. The mere value in the training and expertise of the employees is worth more than gold. Intel will get a government money injection and move on. Which is good, because there isn't exactly anybody yearning to jump into this space, nor many people with the expertise required.
Chip manufacturing is literally at the top of the pole of some of the most advanced and complicated shit we've ever done as a species. Nobody would just let all of that be thrown away.
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u/drawkbox Jan 27 '23
Exactly Intel is important to the expansion of taking back manufacturing in the US on chips. China played themselves on that. Now the propaganda about "collapse" it is a typical authoritarian style push against opposition.
Intel is too important and getting massive investment. Others have won due to higher state level investment, Intel is finally getting that to compete.
File this under, not gonna happen...
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u/ElessarTelcontar1 Jan 27 '23
My understanding is that DOD only buys intel cpus not amd….. your own chip industry is important for national security.
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u/Doggleganger Jan 27 '23
Not sure why you're mentioning China. China is not the dominant player in fabs. You may be thinking of TSMC, which is the Taiwan Semiconductor Manufacturing Company. That's based in Taiwan. Japan and the US also have a ton of fabs, and in general, fabs are spread out over the world.
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u/theFrankSpot Jan 27 '23
They mean the stock price fell, which analysts (for reasons) use to evaluate the success and performance of a business. Investors and their funds lose money, and even tho those groups do literally nothing in the running of the business, their losses can outright ruin a company. It’s been a shit fact for years, and killed a company I once worked for. Our revenue dropped a little one year, and we missed expectations by a bit. Our income was still substantially higher than our debt and expenses, but once “The Street” decided we weren’t viable anymore, we suddenly weren’t. Customers left in droves, despite no change in our products, services, or performance. People saw that plunging stock price and simply decided we weren’t any good anymore. They drove the company into bankruptcy, and 12k of us lost our jobs.
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u/narrat Jan 27 '23
I'm told from someone living in Rio Rancho/Albuquerque that Intel is building like crazy. Cranes everywhere. I doubt they're planning to fade away.
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u/staticbrain Jan 27 '23
Guess people are tired of paying extra to use the whole processor they bought.
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u/flirtmcdudes Jan 27 '23
i remember way back when I got a hyper threading intel CPU when they were still fairly new, and then realized that all the games I was playing really could only work with 1 core anyway.... so games ran like shit. I was like COOL. technology ROCKS lol
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u/MajinBuuMan Jan 27 '23
We've come a long way in just the last 10 years for that stuff lol.
But yeah that was 2000s big programming architecture. One core, one application. More or less. So cores had to be big and beefy to run everything on it. Like try the original Crysis, it'll run worse than remastered as everything tries to run off a single thread.
I'm glad we're actually using CPUs in software better now.
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u/FriendlyDespot Jan 27 '23
I remember the switch from single-core to multi-core processors much differently. Back before our CPUs had more than one core, we often had to close out other applications to get demanding applications like games to work right, because all the context switching in the CPU would absolutely kill performance and consistency. It was amazing when we got more cores and I no longer had to shut down my browser, and AIM, and MSN, and whatever else I had running before starting a game.
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u/VexatiousJigsaw Jan 27 '23
Yeah the benefits to multitasking are often underappreciated. Even in programs optimized for a single thread, you are likely running more than one programs and dozens of processes overall. Add together hpyerthreading and asynchrous IO and other Operating System/Kernel level optimized multi-threaded logic, you almost have to try intentionally to build a user-level program which does not benefit atleast tangentionally from more cores.
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u/Nose-Nuggets Jan 27 '23
Enterprises love step up programs
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u/contorta_ Jan 28 '23
yeah it might be hated in consumer markets, but in enterprise it's a pretty compelling option. pushing an upgrade to capacity into another financial year without having to do a major physical replace (very costly)? fantastic.
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u/Amaeyth Jan 28 '23
This article seems a bit sensational and dramatic. Intel is far from a collapse. They're a gigantic company and have already returned to form in the desktop space. Moreover in 2 or so years when markets begin bulling again extra domestic capacity will prove crucial.
The previous Intel execs allowed the company's R&D to decay as they took profits against a lackluster AMD. Engineering costs money, and so it comes as no surprise that spinning up additional fabs, new node processes, and a new hardware division right before a fed-induced recession places them in choppy waters.
Shareholders really feel like leeches sometimes.
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u/roboninja Jan 27 '23
So I guess buying INTL 10 months ago at what I thought was the low was not a good idea?
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u/Carbidereaper Jan 27 '23
It’s still technically good intel has a major advantage compared to other processors manufacturers. It has its own semiconductor fabs meaning total vertical integration
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u/FuzzeWuzze Jan 27 '23
Intel still has some of if not the best dividends in tech stock.
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u/blazze_eternal Jan 27 '23 edited Jan 27 '23
Honestly surprised this wasn't expected. They're reinvesting a lot into manufacturing.
*edit, a word.
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u/sethonomics Jan 27 '23
More fear mongering in my opinion… stated proper it would show, most companies fail due to their own incompetence
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u/MickCollins Jan 28 '23
The PC market isn't dying, but you just don't see people doing a refresh anytime soon because they're spending all the money they would on a new motherboard and processor on groceries and other shit that's had prices magically raised on them. Like no one is buying overpriced graphics cards right now either.
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u/Wild_Guess_7402 Jan 27 '23
The more things change the more they stay the same.
Intel will be back, we’re going through a cycle just this time numbers are bigger.
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u/Martipar Jan 27 '23
This isn't unexpected, the writings been on the wall for Intel for a while, their manufacturing problems and slow uptake of newer manufacturing techniques has had then lagging for a few years now.
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u/average_zen Jan 27 '23
Intel's problems started 3+ years ago. At its core Intel is a technical innovation company. What they have failed to do is innovate and the market has passed them currently.
Not saying they can't return from this, but unless they have some "next-level shit squirreled away in a back room" they're in for a rough ride.
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u/thenoizehound Jan 28 '23
Every single publicly traded stock is down, especially in the tech sector but that won't stop these sorts of articles, especially if they know it's a company that everyone will get a hard-on pretending is failing.
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u/QristopherQuixote Jan 27 '23
Let's not forget a huge drop in PC sales. This is affecting both Intel and AMD.
https://images.idgesg.net/images/article/2023/01/pc-sales-idc-numbers-100936262-orig.jpeg
The cell phone, home gaming consoles, and inflation have made home PCs less and less attractive. Since so many common things like taxes and email can be done from a browser, installed software is becoming less important as well.
Server sales have dropped as well. Intel's losses are not going 1:1 to competitors.
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u/unordinarilyboring Jan 28 '23
Didn't elon personally lose more than that? My scale of historic is off.
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u/Firm-Journalist-1884 Jan 27 '23
losing Apple put a dent in their bottom line, I’d imagine. Then there’s this massive smartphone market where they have no foothold because everyone is using ARM-based processors. AMD is eating their lunch in the consumer PC market where ARM has not yet taken over.
The walls are really closing in on Intel. Their processors are hot, slow, and outdated. Superior technology is available plentifully at a better price every which way you look.
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Jan 27 '23 edited 20d ago
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u/Firm-Journalist-1884 Jan 28 '23
One of those “death by 1,000 papercuts” scenarios imho
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u/BatteryPoweredFriend Jan 28 '23
Consumer space picture hasn't changed much, contrary to what people think. The point they're all missing is the massive surge in remote office and WFH meant 2020 & 2021 saw abnormally high demand, particularly for laptops. But that demand is not the sort to keep on buying new machines every few years or so; once they have something that can browse the web and run excel + word, it's all the performance they need and their next "upgrade" will be closer to in 5-8 years time, if not longer.
Desktops account for a small fraction of the market, especially the DIY space and while Intel has lost some marketshare in laptops, it's mostly to Apple not AMD.
The really bad thing is what's happening with their DCAI numbers. This has historically been their most important segment, with the highest margins, most reliable revenue stream & having the most dominant market position. But the problems here aren't just Intel's terrible YoY results, it's a long-term erosion of their presence from this entire market by AMD, Nvidia & ARM on multiple different fronts.
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u/newtrawn Jan 27 '23
Holy shit, AMD's market cap is higher than Intel's. I don't think I've ever seen that.
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u/ProcyonHabilis Jan 28 '23
"No words can portray or explain the historic collapse of Intel," said Rosenblatt Securities' Hans Mosesmann, who was among the 21 analysts to cut their price targets on the stock.
"Please someone quote me" begged Hans Mosesmann, as he shat out the most dramatic one-liner he could think of.
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u/krom0025 Jan 27 '23 •
Why does every single article written about any topic nowadays contain the words "collapse, historic, worst ever, worst case scenario, epic, slammed?" It's getting ridiculous. Their stock lost 6%. That is not a collapse. Intel isn't filing for bankruptcy. They didn't even lose money. They just had a decrease in profits. Cry me a river. The world will be fine.