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This is exactly the purpose of competition, it shouldn’t be news.
Also, Intel's long history of using unethical tricks to preserve their market share while avoidig competing on price also makes this a historical turn of events.
Intel is NOT competing against AMD only. In the past couple of years, we’ve seen a number of big tech companies developing their own chips. Focusing on AMD would be quite myopic from a strategic pov. This market is only getting more competitive. Either you compete on performance or price.
These companies are already not paying anything close to the list price, though.
This will make it harder for them to invest in production technology, which will make it harder for them to catch up to TSMC. It might be the only move they can make, but that doesn't make it a great one.
Is this not just the efficient-market at work? Simplistically: Intel's chips aren't as good as AMDs so it has to drop prices. And for future investment Intel still has ~ $24 billion cash on hand as of June 2021 [0] [0] https://www.macrotrends.net/stocks/charts/INTC/intel/cash-on...
This is exactly the purpose of competition, it shouldn’t be news.
This will make it harder for them to invest in production technology, which will make it harder for them to catch up to TSMC. It might be the only move they can make, but that doesn't make it a great one.
Intel has $24.8 billion in cash. https://www.macrotrends.net/stocks/charts/INTC/intel/cash-on... Intel dropping their prices and thus revenue temporarily should not affect their ability to compete at all. They're not THAT badly mismanaged to the point they're out of cash.
They are also doubling down on fab tech to catch up with TSMC. Markets working as intended.
Well... I find that a bit of a stretch. I'd rather say we happen to be lucky. What if TSMC was a company that was about as good as Intel on specs and price. Would the market be "working" then? A new player might come along. That new player would need to have 20 billion dollars of money to play along though.
Chips though... chips are a market and it is working as a market. IMO chips are a rare example of Real economics in the modern economy, as opposed to the intangible-only economy that used to be mostly banking. A notable feature of the chip market is the persistent demand, the ability to demand/consume more computing than chip manufacturers can produce.
Compare to cars, say 100 years ago. Most people didn't have one yet. Demand could keep up with supply, markets grow fast, and also make consistent efficiency gains,. Eventually though, the market saturates. People have cars and just need periodic replacements. The market isn't growing. People still want lower prices, or shinier cars. If they get lower prices, the market will shrink. Efficiency gains in mature markets can degrow a market, if demand is saturated. If car factories becomes twice as efficient, we'll probably have fewer of them. Our demand is not that flexible.
Same thing happened with smartphones and laptops, to a degree. They do what they do well and we only need one each.
In order to have a learning curve anything like Moore's law, the chip market has to grow every year. That requires a lot of demand, to offset all the efficiency gains. I don't think a lot of markets have the demand potential to support a Moore's law. In this scenario, market's working pretty well.
Intel needs better (especially with less energy consumption) chips not lower price. If Intel will lower the price they will have less cash for R&D and this is the trouble for intel now: not much competitive chips. And where are again at the beginning of the circle. I hope they will make an internal review of their offices/laboratories/whatever, is not a price issue with the chips, is a performance and technical issue…
They are also doubling down on fab tech to catch up with TSMC. Markets working as intended.
Well... I find that a bit of a stretch. I'd rather say we happen to be lucky. What if TSMC was a company that was about as good as Intel on specs and price. Would the market be "working" then? A new player might come along. That new player would need to have 20 billion dollars of money to play along though.
From what I understand, quite a few national governments are at least looking into setting up their own local chip plants since semiconductors have become a critical industry. On that scale, $20b is not a huge speed hump.
Intel is NOT competing against AMD only. In the past couple of years, we’ve seen a number of big tech companies developing their own chips. Focusing on AMD would be quite myopic from a strategic pov. This market is only getting more competitive. Either you compete on performance or price.