Intel shares tumbled after the incoming CEO pledged to regain the company’s long-lost lead in chip manufacturing, countering growing calls from some large investors to shed that part of its business.
“I am confident that the majority of our 2023 products will be manufactured internally,” Pat Gelsinger said on a conference call to discuss financial results. “At the same time, given the breadth of our portfolio, it’s likely that we will expand our use of external foundries for certain technologies and products.”
He plans to provide more details after officially taking over the CEO role Feb. 15, however Gelsinger was clear that Intel is sticking with its once-mighty manufacturing operation.
“We’re not just interested in closing gaps,” he told analysts on a conference call Thursday. “We’re interested in resuming that position as the unquestioned leader in process technology.”
Keeping production in-house may be bad for Intel because its manufacturing technology has fallen behind Taiwan Semiconductor Manufacturing Co., which makes chips for many of Intel’s rivals… “Where investors are going to be disappointed is that some were expecting some sort of larger announcement of a strategic partnership with TSMC,” said Edward Jones & Co. analyst Logan Purk.
MacDailyNews Take: Gelsinger has the unenviable (besides the huge paycheck and golden parachute) task of trying to rally the tired troops of a stagnant maker of hot, slow, insecure x86 chips after being thoroughly embarrassed by Apple’s first-generation M1 chips.
He’s either faking it with some corporate rah-rah talk or he’s got a screw loose.
Wait until he sees Apple’s M2, M3, etc. He’ll be running to TSMC begging for help.
Patty should transition beleaguered Intel into a maker of “lifestyle” hotplates. Intel would be really good at that.
(Our apologies to computer fan makers worldwide. We know you love Intel utterly and completely.)
See also: M1 benchmarks prove Apple Silicon outclasses nearly all Intel Macs — January 13, 2021
I don’t feel bad for him taking over Intel. He will make a personal fortune…. win, lose, or draw.
Apple has for the last couple of months been shipping computers with processors which outperform most Intel chips. In the Mac mini, they have even reduced the price by $100 and significantly improved the performance over the previous model.
OSX does not depend on Intel and it’s going to be interesting to see how other manufacturers will respond. The choices are essentially to stick with Intel, or to go with a different architecture, which will need a different operating system.
Intel are trying to play catch-up but starting from way behind Apple. Apple’s way of keeping quiet about it’s intentions until the product is ready to ship makes things very difficult for rivals. By the time that they realise the need to match what Apple is doing, Apple has been doing it in secret for several years and is already working on the next couple of future iterations.
As much as I like Apple and the M1, I am in no way willing to encourage anyone to give up on US manufacturing and have it all done overseas. It would be wonderful if US companies had the skills to manufacture what Apple designs.
I happen to love hot plates. I’m offended. therefore.
I am impressed with Gelsinger.
No point in settling for 2nd place. He is not shooting for financial targets, he is shooting at the only target that really matters. Being the best. Sounds rather Steve Jobs like. (Jobs had nearly the same task. A tired, old has been company.) A lot of people thought Jobs was nuts to come back to Apple. Time will tell whether Gelsinger is up to the task.
this new intel ceo is just crap… 2023 talk about 7nm where everyone already advanced to new chip and technology. Good luck to you intel makin your own chip.. doesnt even produce good yield and your chip already passe.. apple, google and many others are moving away from intel chip because of traditional method no innovative and intel stock should be worth mayb 20 to 30 by 2023.
Gelsinger has a huge task ahead of him.
Intel is way behind in process technology which partly stems from overconfidence. The prior three process transitions (ending with the transition into 14 nm) went so well for Intel that they got over confident and decided to throw the kitchen sink into the 14 to 10 transition. That basically killed the 10 nm process for several years as they could not get all those new things to work and transition to 10 nm at the same time.
So… Intel went back to slowly adding each of those innovations to the 14 nm process. That’s how they ended up with the “14 nm”, “14+ nm”, “14++ nm”, and “14+++ nm” processes. There’s even rumors that there will be a “14++++ nm” process that won’t be called that.
Intel has been shipping 10 nm in full production quantities for a limited number of chip designs for under a year. Yes, Intel’s 10 nm process is effectively almost the same as what TSMC calls it’s 7 nm process in chip density and energy efficiency, but, and it’s a very important but, TSMC and others have already started shipping 5 nm chips in full production quantities. Intel is thus, optimistically, two years behind.
In order to be the process leader again by 2023, Intel will have to be shipping some variant of its Core processors at 5 nm by 31 December 2023. If the design rules hold, that would be roughly equivalent to the 3 nm design node by TSMC and others. TSMC already projects doing 3 nm by the end of 2023, but rumors are that they won’t make it. (I would not bet any large sums against TSMC making it).
Can Intel get from barely shipping 10 nm trough 7 nm and getting to 5 nm to take the lead by the end of 2023? It’s in theory possible, but that’s a nearly impossible goal.
Should Intel go for it? Absolutely.
However… Intel needs to remember the insanity that led to the initial attempt at the 14 to 10 nm transition.
Then there’s the architecture issue. IF Intel can regain the lead in design nodes, they still need to update their architecture. The Apple M1 is a much more modern architecture. Intel has quite a way to go in modernizing its architectures even to match the M1 let alone take the lead.