Friday, August 30th 2024
Report: Intel Could Spin Out Foundry Business or Cancel Some Expansion Plans to Control Losses
According to a recent report from Bloomberg, Intel is in talks with investment banks about a possible spin-out of its foundry business, as well as scraping some existing expansion plans to cut losses. As the report highlights, sources close to Intel noted that the company is exploring various ways to deal with the recent Q2 2024 earnings report. While Intel's revenues are in decline, they are still high. However, the profitability of running its business has declined so much that the company is now operating on a net loss, with an astonishing $1.61 billion in the red. CEO Pat Gelsinger is now exploring various ways to control these losses and make the 56-year-old giant profitable again. Goldman Sachs and Morgan Stanley are reportedly advising Intel about its future moves regarding the foundry business and overall operations.
The Intel Foundry unit represents the biggest consumer of the company's funds, as the expansion plans across the US and Europe are costing Intel billions of US Dollars. Even though the company receives various state subsidies to build semiconductor manufacturing facilities, it still has to put much of its capital to work. Given that the company is running tight on funds, some of these expansion plans that are not business-critical may get scraped. Additionally, running the foundry business is also turning out to be rather costly, with Q2 2024 recording a negative 65.5% operating margin. Separating Intel Product and Intel Foundry may be an option, or even selling the foundry business as a whole is on the table. Whatever happens next is yet to be cleared up. During the Deutsche Bank Technology Conference on Thursday, Pat Gelsinger also noted that "It's been a difficult few weeks" for Intel, with many employees getting laid off to try to establish new cost-saving measures.
Source:
Bloomberg
The Intel Foundry unit represents the biggest consumer of the company's funds, as the expansion plans across the US and Europe are costing Intel billions of US Dollars. Even though the company receives various state subsidies to build semiconductor manufacturing facilities, it still has to put much of its capital to work. Given that the company is running tight on funds, some of these expansion plans that are not business-critical may get scraped. Additionally, running the foundry business is also turning out to be rather costly, with Q2 2024 recording a negative 65.5% operating margin. Separating Intel Product and Intel Foundry may be an option, or even selling the foundry business as a whole is on the table. Whatever happens next is yet to be cleared up. During the Deutsche Bank Technology Conference on Thursday, Pat Gelsinger also noted that "It's been a difficult few weeks" for Intel, with many employees getting laid off to try to establish new cost-saving measures.
113 Comments on Report: Intel Could Spin Out Foundry Business or Cancel Some Expansion Plans to Control Losses
If the industry is lucky, IFS will soon split from Intel and join them.
Without node advantage, AMD never done well
And AMD is losing that now.
Has nothing todo with your fanboyism thinking TSMC is charging too much out of some sort of friends politics.
Sadly for AMD Intel uses 3nm TSMC in a few months, Arrow Lake incoming
And in 2025, Intel 18A is running at full power
I hope AMD prepares for price cuts across the board, Ryzen 9000 already cheaper than 7000 on launch, tough times incoming for AMD
AMD's move to both Ryzen and (C/R)DNA was excellent.
Who do you think is ASML's prime customer? Not Intel. It must be regretting to ignore EUV/DUV for so long.
AMD made a comeback with Ryzen using 14nm from GloFo, while Intel had a more than mature 14nm(+++++++++).
Access to more advanced nodes isn't everything. Silicon design engineering plays a big role.
So please, use reasonable arguments.
It's nothing special, other then you have a tidy bit of more space to pack transistors, and from a performance standpoint compared to a older gen, have either less power at the same clocks, or have higher clocks at the same power.
Best example was RX480 vs RX580 - a 14nm vs 12nm, where the 12nm would offer either lower power at same clocks, or higher frequencies due to the additional headroom. AMD picked higher frequencies from the stock 1200Mhz to 1333Mhz but without the faster ram or memory bandwidth, scalability would be terrible.
The whole I/O die is made on a older node (14nm if i'm correct) - actually clever and saves costs.
You are mixing apple and oranges. 5 to 4 is not a big jump because it’s literally the same node, just optimized. Same with your 14 to 12 example - it’s the same node. And no, 480 and 580 used the exact same chip. The shrink was with the 590.
N3, on the other hand, is a fully new smaller node. It’s a significant advancement. The elephant in the room, of course, is how exactly Intel 3nm is going to compare to TSMC 3nm. The whole nomenclature has become kinda pointless, really, since it’s just a vaguely broad denomination.
Intel has been competing just fine, using worse nodes for years now, imagine when they get node-advantage again, which is very soon
I'm out of this thread.
Multi-threaded app performance is in favor of Intel thanks to raising amount of e-cores.
14700K (8P+12E) wins in applications over 13700K (8P+8E) by around 5%. That may not be much but it's thanks to +4 e-cores and very slightly increased clocks.
14700K stands somewhere between 7900X and 9900X in app performance. 12 regular cores with HT vs. 8 regular + HT + 12 e-cores.
AMD has no real hybrid architecture in desktop - something like Ryzen AI 300 series but with 8 Zen-P cores and 8/12 Zen-c cores. I'd like to see how that that would match 8P+12E from Intel.Intel has in their presentetation that 3nm will bring them 18% improvement in perf/watt ratio. That's not enough for them to get on par with efficiency of Zen 5 CPUs.
Hopefully their own presentation is wrong and the perf/watt ratio will improve much further. We need competition.Their Arrow Lake was supposed to be on their own Intel 20A process, yet it will be made (along with Lunar Lake) by TSMC on 3nm.
As for their 18A, I'll believe when I see it. Intel stated that first fully functioning chips fully made on 18A will arrive in 1st half of 2025 and will be in shops shortly after. Let's see.