Posted on 06/06/2023 5:25:56 AM PDT by FarCenter
Ever since CEO Pat Gelsinger announced Intel was opening its fabs to contract manufacturing, the question has been: for whom?
Who was going to pay to have their chips made by an American giant with such a spotty reputation for execution and whose process tech has been not only falling behind TSMC and Samsung, but even Intel's own roadmaps at that?
At Computex last month, Nvidia CEO Jensen Huang revived the question, reminding reporters his GPU giant was open to the idea of using Intel's assembly lines; Huang said as much this time last year.
To be clear, Intel Foundry Services (IFS) – which wants to make chips for all kinds of customers, just like TSMC, Samsung, and UMC do – has won some victories in the two years since it was introduced, just not for the kinds of process tech that grabs headlines. Last summer, MediaTek announced it would use Intel to fabricate some chips on a 22nm node.
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Intel has fabs to build
As we've pointed out on multiple occasions, building a foundry business doesn't happen overnight. A single leading-edge fab can cost $10-15 billion and take more than four years to finish.
Intel's existing capacity was sized to meet its internal needs. To meet demands as a contract manufacturer, it needs to build fabs — lots of them.
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Intel still needs to commercialize a competitive process node
But four or five new fabs still won't do Intel much good if it doesn't have a competitive product to sell. Yes, Intel could churn out chips – like microcontrollers and simpler system-on-chips – on larger nodes, but then it'll have to compete against all the cheap contract factories out there doing the same. Chipzilla is, publicly at least, gunning for contracts for high-end, relatively expensive nodes and features, such as multi-die interconnects, stacking, and packaging.
Despite Intel's challenges bringing its 10nm and 7nm process nodes to market — we're still waiting for the latter — there's actually reason to be optimistic.
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Don't forget about cost
Even if Intel can build enough fabs and commercialize a competitive process node, it ultimately has to compete on cost. Unless your process tech is miles better than the competition, nobody is going to pay more for the privilege of using it.
This is perhaps the biggest unknown at this point. Intel will have at least one customer that can act as a showcase — for better or worse — of what their fabs are capable of: Intel.
Intel’s stock has stagnated for a decade, while Nvidia has gone up 50X in the same time.
Intel’s stock has stagnated for a decade, while Nvidia has gone up 50X in the same time.
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It seems to me that the CPU market is more competitive and has lower margins than the GPU market. Gamers in particular will pay a premium for performance.
You are correct but the bit coin miners also had an impact. The future of that is uncertain
Intel tried this back 10 years ago.
Internal fighting between managers doomed it.
Nvidia was going to be their first major customer.
Intel loosing Apple and management in-fighting cratered the stock.
I hope Pat can pull it together but I am not sure if its possible.
Too much India vs Chinese vs Mormon in-fighting.
Let’s not forget woke-ism, and firing people because they didn’t toe the line on it.
A huge unknown question and answer is: China/Taiwan and TSCM? The greater the risk of Chinese aggression the more Intel’s plans will be profitable...
One of the things that has always surprised me about the CPU/computer business is that FPGAs never really made an impact. When I first read about them (many) years ago, it seemed like a natural solution to a lot of problems where you need decent compute power for specific problems. If you can basically reprogram the CPU itself on the fly, you can do some interesting things. Security would be an issue, but security is an issue regardless.
FPGAs have been used in bitcoin mining to provide higher hash rates with lower power consumption.
OTOH, you need to be able to integrate the FPGA with the CPU using a buss that can keep the FPGA busy. So it becomes a problem in engineering a specialized system with custom circuit boards, etc.
And if you have sufficient capital and time, ASICs beat FPGAs.
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