Barely insightful. The rumor of Intel buying Broadcomm, ... is most likely being perpetuated by Broadcomm itself
Intel Fights for Its Future
21–30 of 198 posts
Re: Intel Fights for Its Future
#22This article makes it seem that being a major player in mobile is the only way Intel could survive. Mobile is a decelerating market, while cloud and servers, where Intel has a huge lead is an expanding market and profitable. In 2017, Intel's revenue hit an all-time high, as it did the year before, and its stock is an all time high. This is not a company "fighting for its future."
The headline is definitely sensationalist but there are threats and missed opportunities on Intel's horizon and past. The lure of mobile is the upgrade cycle as those are much shorter. The same, short upgrade cycles were a boon for intel in the hey day of desktops/laptops. The bigger threat the article fails to focus on is ARM. Singularity for apps has always hinged on write-once-run-everywhere. Intel hasn't been abl…
The picture at the beginning emphasizes ARMs rapid improvements.
It only goes out to 2014. It leaves one with the impression that ARM will soon pass Intel in performance.
This would suddenly eat into Intel’s profits.
Re: Intel Fights for Its Future
#23I think this article misses the point: Intel has nothing to gain by entering the commodity smartphone processor market. The margins are slim, and therefore doesn't make good use of Intel's advantage in semiconductor fabrication. Serial performance is important in processors, and as long as Intel is king in this area, they will have a home in server racks and workstations. I keep hearing about how cheap arrays of ARM…
In the short run, you are correct. However, by looking at history, it seems that the high-end chip manufacturers always end up being replaced by the low-end manufacturers, as the focus on cheap, small, low-power designs end up providing various strategic advantages (and raw revenue for product development). That's how Intel replaced the various RISC manufacturers in the 90s. Of course, the field is young enough that…
Exactly -- the key thing is the historical cost structures of the high-end makers makes low-end chip making highly unattractive which was why it was easy for Paul Otellini to say no to Apple to make chips for the iPhone.
In the end, low-power chipmakers like ARM have no where else to go but up -- they can slowly move up-market and over time, enjoy the same high margins but at much lower costs relative similar to entrenched players like Intel.
Re: Intel Fights for Its Future
#24Intel shall definitively be worried
Re: Intel Fights for Its Future
#25This article makes it seem that being a major player in mobile is the only way Intel could survive. Mobile is a decelerating market, while cloud and servers, where Intel has a huge lead is an expanding market and profitable. In 2017, Intel's revenue hit an all-time high, as it did the year before, and its stock is an all time high. This is not a company "fighting for its future."
But as cloud service provider grow stronger, they will begin to make their own chips, like TPU. That is a much bigger threat to Intel. Essentially, as Moore's law is effectively put into an end, people will seek to make their own customized chips, CPU will be marginalized as time goes by.
Except they wouldn't. It took Apple a decade to up their silicon to a level where it is now. For most of that time, their activity was a money sink for them. And even today, even with some of the best talent in IC design one can get in USA (PA Semi and its veteran designers from HP, Sun, Freescale, and whatever else was remaining of American semi industry), their chips are still half outsourced, 70% external IP if you remove SRAM from calculations.
Apple is company with an own silicon, but it will never be a true microelectronics company.
Google's TPUs are another examplary case. Goog did spare no money to get into the market first and secure a tech/platform lockdown. Yet, what took them at least 5 years, and extremely expensive to make reticule limit chips, was bested by a no-name Chinese fabless that blew TPUs out of the water on power/cost/performance ratio.
All American dotcoms that are actively trying to get into hardware are oblivious to the fact that there is an inherent difference in between a hardcore engineering company to a company whose topmost technical expertise is underhanded web programming.
Re: Intel Fights for Its Future
#26This article makes it seem that being a major player in mobile is the only way Intel could survive. Mobile is a decelerating market, while cloud and servers, where Intel has a huge lead is an expanding market and profitable. In 2017, Intel's revenue hit an all-time high, as it did the year before, and its stock is an all time high. This is not a company "fighting for its future."
Yes. I must say I chuckled a bit when I saw the headline. Intel is still churning out 63% gross margins. On semiconductors. That is exceptional. Intel is not fighting for its life by any stretch of the imagination.
My take is that the analysis refers to Intel's long-term prospects, not today's or yesterdays's revenue. These reports serve as a foundation to guide decisions on future long-term investments.
Re: Intel Fights for Its Future
#27This article makes it seem that being a major player in mobile is the only way Intel could survive. Mobile is a decelerating market, while cloud and servers, where Intel has a huge lead is an expanding market and profitable. In 2017, Intel's revenue hit an all-time high, as it did the year before, and its stock is an all time high. This is not a company "fighting for its future."
> Mobile is a decelerating market, while cloud and servers, where Intel has a huge lead is an expanding market and profitable.
No, it is not decelerating, it's still growing [0]. Besides, demand from other low-power applications such as IoT will only lead to increased demand for low-power (mobile) chips.
> In 2017, Intel's revenue hit an all-time high, as it did the year before, and its stock is an all time high. This is not a company "fighting for its future."
" ... as Microsoft shows, revenue is a lagging indicator in the technology business." -- pg [1]
Given enough time, all investments will eventually mature. In other words, revenue is about the past -- reaping the rewards from mature (technology) investments. Growth is about the future -- future returns can only come from nascent (technology) investments.
Growth in a new product with lots of potential applications is a much better indicator of a company's potential to continuing earning returns in the future, before that product reaches maturity (and revenue attributable to that product starts to decline). Intel needs a new product category to future-proof its existence.
[0] http://www.asymco.com/2018/02/27/the-number/
[1] http://www.paulgraham.com/ambitious.html
EDIT: as pointed out by several commenters below, I incorrectly internalized your use of "decelerate" to mean "decline" but I'll leave my comment as-is.
Re: Intel Fights for Its Future
#28Earlier quoted context omitted.
But as cloud service provider grow stronger, they will begin to make their own chips, like TPU. That is a much bigger threat to Intel. Essentially, as Moore's law is effectively put into an end, people will seek to make their own customized chips, CPU will be marginalized as time goes by.
Except they wouldn't. It took Apple a decade to up their silicon to a level where it is now. For most of that time, their activity was a money sink for them. And even today, even with some of the best talent in IC design one can get in USA (PA Semi and its veteran designers from HP, Sun, Freescale, and whatever else was remaining of American semi industry), their chips are still half outsourced, 70% external IP if yo…
I won't be so certain. An ASIC/FPGA chip that accelerates specific Database operation is already a reality. The problem is the cost effect ratio.
BTW, cloud provider already making tons of customized hardware themselves. And talking like Amazon/Google/Microsoft only have talents for web programming is short sighted and simply not sure.
https://datacenterfrontier.com/amazon-building-custom-asic-c...
Re: Intel Fights for Its Future
#29Speaking of Intel failing to innovate, has anyone seen Intel's 10nm process? Canon Lake was supposed to be out in 2016 and it has now been pushed back to mid-2018. There was a super brief update about it at CES [1]. Makes one wonder if the future is not arriving on-time as previously expected.
[1] https://www.anandtech.com/show/12271/intel-mentions-10nm-bri...
Re: Intel Fights for Its Future
#30Earlier quoted context omitted.
So why are they considering acquiring Broadcom?
To leverage their synergies.
To be fair, that is the response to all 'Why is X acquiring Y?' questions, and it's a terrible answer.
M&A is hard to do right -- most fail, and a staggering percent have all the surplus delivered to the seller instead of the buyer. See: https://www.mckinsey.com/business-functions/strategy-and-cor...
The real answer would speak to why (Intel thinks) this deal is not like the average, unsuccessful deal, and specifically why they would be able to use Broadcom's assets better than Qualcomm.
The answers here probably have something to do with datacenters and energy/heat efficiency gains when you stop being fabless, something to do with anti-trust avoidance (qualcomm is limited by anti-trust concerns much more than Intel is, without those limits the value goes up), and something to do with cost and workflow concerns. Intel has a substantial risk to their current model, which is already hitting something of a natural ceiling of cost per manufacturing facility, driven largely by precision requirements -- that ceiling is what stopped Moore's law, I think, because no one can build a facility that costs even more money than Intel -- and developing business processes that can deliver classic Intel improvements in a more fabless or fabless-friendly process could reduce that risk.
This is all pure guesswork, but I think it gets closer to the actual discussions inside the companies.