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Intel Reports Second Quarter 2024 Financial Results

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Re: Intel Reports Second Quarter 2024 Financial Results

#11

Post by jandrese »

bluedino wrote: post #7
softfalcon wrote: post #3

This sounds worryingly like “sales are down, cut costs to maintain profitability to spike our stock numbers” and not enough focus on what I believe is actually wrong, which is that they can’t seem to reliably make competitive processors in a stiff market. Anyone else feel like this is bean counters at Intel playing the wrong game? I personally feel like leadership at Intel lost the plot almost a decade ago.

10 years from now, when the downfall of Intel is being taught at business schools, what are going to be the big takeways and now-obvious mistakes?

Probably not offering fab time to other companies when they were process leaders. TSMC ate their lunch and managed to leapfrog Intel due to their massive R&D efforts fueled by cell phone chips.

Re: Intel Reports Second Quarter 2024 Financial Results

#12

Post by softfalcon »

bluedino wrote: post #7
softfalcon wrote: post #3

This sounds worryingly like “sales are down, cut costs to maintain profitability to spike our stock numbers” and not enough focus on what I believe is actually wrong, which is that they can’t seem to reliably make competitive processors in a stiff market. Anyone else feel like this is bean counters at Intel playing the wrong game? I personally feel like leadership at Intel lost the plot almost a decade ago.

10 years from now, when the downfall of Intel is being taught at business schools, what are going to be the big takeways and now-obvious mistakes?

In my opinion, one the most reliable signs is when companies stop repeatedly investing into their product innovation. The moment they start behaving like an established behemoth (monopoly/oligopoly) and you see repeated stock buybacks and frequent layoffs, the end is coming.

This applies to most large, inefficient corporations that get too comfy with success and forget how to pivot fast, take risks, and fiercely fight for their place in the market.

Eventually, any organization that falls into this state, slowly stagnates into oblivion.

Re: Intel Reports Second Quarter 2024 Financial Results

#13

Post by softfalcon »

2OEH8eoCRo0 wrote: post #10
bluedino wrote: post #7

Earlier quoted context omitted.

10 years from now, when the downfall of Intel is being taught at business schools, what are going to be the big takeways and now-obvious mistakes?

Don't run your own fab? It makes business sense but I don't know if I like that answer. What if everyone did that? Should everyone just use TSMC? That's stupid IMO.

This is what Boeing did for their manufacturing... look how it's playing out for them now.

Re: Intel Reports Second Quarter 2024 Financial Results

#14

Post by frognumber »

2OEH8eoCRo0 wrote: post #10
bluedino wrote: post #7

Earlier quoted context omitted.

10 years from now, when the downfall of Intel is being taught at business schools, what are going to be the big takeways and now-obvious mistakes?

Don't run your own fab? It makes business sense but I don't know if I like that answer. What if everyone did that? Should everyone just use TSMC? That's stupid IMO.

Don't screw up running your own fab is the better lesson.

* Intel foundry services were perhaps a decade or two too late. Running a fab needs scale. That had to come before they lost the technology edge.

* Intel treatment and mismanagement of engineers was well-known in 2000, and you need the best and brightest.

* Leadership needs to understand core business / technology. Bob Swan. Arguably Brian Krzanich. Paul Otellini. Just a lot of clueless at the top.

Etc. The point is Intel wasn't "everyone." Intel was at the very top of the game a quarter-century ago. That was their position to lose, which they did in a spectacular fashion.

I continue to hope for a Microsoft-style comeback, but it's becoming increasingly unlikely.

Re: Intel Reports Second Quarter 2024 Financial Results

#15

Post by 2OEH8eoCRo0 »

frognumber wrote: post #14
2OEH8eoCRo0 wrote: post #10

Earlier quoted context omitted.

Don't run your own fab? It makes business sense but I don't know if I like that answer. What if everyone did that? Should everyone just use TSMC? That's stupid IMO.

Don't screw up running your own fab is the better lesson. * Intel foundry services were perhaps a decade or two too late. Running a fab needs scale. That had to come before they lost the technology edge. * Intel treatment and mismanagement of engineers was well-known in 2000, and you need the best and brightest. * Leadership needs to understand core business / technology. Bob Swan. Arguably Brian Krzanich. Paul Otell…

Don't screw up? Sage advice! I agree they are mismanaged but it also takes luck to stay in the lead.

I hope for a comeback too. My amateur worthless opinion is that Intel is struggling now but at least they have fabs. The fabless companies are going to be fucked in the long term- the fabs they contract to are all on shifting geopolitical sands!

Re: Intel Reports Second Quarter 2024 Financial Results

#16

Post by phkahler »

softfalcon wrote: post #12
bluedino wrote: post #7

Earlier quoted context omitted.

10 years from now, when the downfall of Intel is being taught at business schools, what are going to be the big takeways and now-obvious mistakes?

In my opinion, one the most reliable signs is when companies stop repeatedly investing into their product innovation. The moment they start behaving like an established behemoth (monopoly/oligopoly) and you see repeated stock buybacks and frequent layoffs, the end is coming. This applies to most large, inefficient corporations that get too comfy with success and forget how to pivot fast, take risks, and fiercely figh…

>> The moment they start behaving like an established behemoth (monopoly/oligopoly) and you see repeated stock buybacks and frequent layoffs, the end is coming.

Add to that the suspension of the dividend, and the packaging of the FPGA business (getting ready to sell it?) and the reference to idle capacity - guess they can't even fill that with their foundry business.

One thing I've noticed is that predicting timing is impossible. You can see a company showing signs of impending failure and somehow stock price still increases for a while, or the company decays slowly over a very long time. This might be a good thing since a company may save itself in some instances.

Re: Intel Reports Second Quarter 2024 Financial Results

#17

Post by tedunangst »

bluedino wrote: post #7
softfalcon wrote: post #3

This sounds worryingly like “sales are down, cut costs to maintain profitability to spike our stock numbers” and not enough focus on what I believe is actually wrong, which is that they can’t seem to reliably make competitive processors in a stiff market. Anyone else feel like this is bean counters at Intel playing the wrong game? I personally feel like leadership at Intel lost the plot almost a decade ago.

10 years from now, when the downfall of Intel is being taught at business schools, what are going to be the big takeways and now-obvious mistakes?

Go back and read the answers to when somebody asked the same question ten years ago?

Re: Intel Reports Second Quarter 2024 Financial Results

#18

Post by hylaride »

2OEH8eoCRo0 wrote: post #15
frognumber wrote: post #14

Earlier quoted context omitted.

Don't screw up running your own fab is the better lesson. * Intel foundry services were perhaps a decade or two too late. Running a fab needs scale. That had to come before they lost the technology edge. * Intel treatment and mismanagement of engineers was well-known in 2000, and you need the best and brightest. * Leadership needs to understand core business / technology. Bob Swan. Arguably Brian Krzanich. Paul Otell…

Don't screw up? Sage advice! I agree they are mismanaged but it also takes luck to stay in the lead. I hope for a comeback too. My amateur worthless opinion is that Intel is struggling now but at least they have fabs. The fabless companies are going to be fucked in the long term- the fabs they contract to are all on shifting geopolitical sands!

"but it also takes luck to stay in the lead."

It's not luck if they were riding momentum that slowed because they shifted away from proper R&D.

The fabless companies had nothing but R&D to live on and the costs of outsourcing the fab means the capital costs could be amortized over more customers (meaning intel should have probably split in two).

Intel's fabs are a generation behind and now they're capital constrained. How do you get back ahead outside of China invading Taiwan?

Re: Intel Reports Second Quarter 2024 Financial Results

#19

Post by dredmorbius »

Additional coverage from:

The Register: "Intel to dump 15 percent of staff to save costs" https://www.theregister.com/2024/08/01/intel_to_ax_headcount...>

CNBC: "Intel to cut 15% of headcount, reports quarterly guidance miss" https://www.cnbc.com/2024/08/01/intel-intc-q2-earnings-repor...>

Re: Intel Reports Second Quarter 2024 Financial Results

#20

Post by softfalcon »

phkahler wrote: post #16
softfalcon wrote: post #12

Earlier quoted context omitted.

In my opinion, one the most reliable signs is when companies stop repeatedly investing into their product innovation. The moment they start behaving like an established behemoth (monopoly/oligopoly) and you see repeated stock buybacks and frequent layoffs, the end is coming. This applies to most large, inefficient corporations that get too comfy with success and forget how to pivot fast, take risks, and fiercely figh…

>> The moment they start behaving like an established behemoth (monopoly/oligopoly) and you see repeated stock buybacks and frequent layoffs, the end is coming. Add to that the suspension of the dividend, and the packaging of the FPGA business (getting ready to sell it?) and the reference to idle capacity - guess they can't even fill that with their foundry business. One thing I've noticed is that predicting timing i…

I am convinced that the decay is often very slow. There are signs of impending failure and it frequently drags out for many, many years.

Then, eventually, you'll see a "straw that breaks the camel's back" and the hollow shell of the company will finally, fully implode.

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