Intel's Foundry Business Hinges on 14A Node Success

[TheLostSwede]

In response to a question about Intel's foundry strategy from Timothy Curry—a UBS analyst—Intel CEO Lip-Bu Tan mentioned that although the company has a team that is laser focused on developing its 14A node, the node hinges on customer commitment at the moment. This obviously includes Intel itself, but also its potential third party customers and if there will be enough business for Intel to make money on the upcoming node. Lip-Bu Tan said that it "has to meet my requirement in terms of performance and yield. It's a lot of responsibility to be serving our customers, make sure that we can deliver the result—consistent, reliable result—to them, so that their revenue can depend on us."

It's clear that Intel's new CEO is very focused on revenue for the company and its customers, which makes sense considering the current situation at Intel. However, the question is if TSMC will be able to handle potential future business from Intel, as they will most likely be the only viable option for Intel, if the company decides that the investment into its 14A node doesn't make financial sense. The company has already announced that it will "further slow the pace of construction in Ohio to ensure spending is aligned with market demand" while cancelling its announced fab in Germany altogether. Admittedly the German fab was never intended to be a leading edge fab, but with so many cancelled projects, one has to wonder where Lip-Bu Tan will take the company and without third party customers, it sounds like Intel's foundry business might soon give up on trying to be a cutting edge foundry. For now, a lot hinges on its current 18A node and if it can attract enough third party interest for it.



View at TechPowerUp Main Site | Source

 

[TheLostSwede]

The interesting part in the earnings call audio recording starts around 37:40 in, but it wasn't possible to link directly to that part due to having to enter som company details to get access to the recording.

 

[oxrufiioxo]

The beginning of the end it seems...

 

[TheLostSwede]

The beginning of the end it seems...

View attachment 409297

I'm not sure it's that bad, but it seems like Intel has had a fair share of problems with 18A, based on what was said on the call. I guess we'll have to wait and see how Intel's next generation of 18A chips performs, before we know if the new CEO will decide to change the focus of the foundry business or not.

 

[oxrufiioxo]

I'm not sure it's that bad, but it seems like Intel has had a fair share of problems with 18A, based on what was said on the call. I guess we'll have to wait and see how Intel's next generation of 18A chips performs, before we know if the new CEO will decide to change the focus of the foundry business or not.

Me who is someone that loves all things tech I really want intel to turn this around because if all we have is TSMC for silicon gamers are going to get the shaft over and over. It sucks that Samsung is also not doing too well we really need at least a second player for advanced chip making.

Will it actually help who knows but having only 1 player is never a good thing.

 

[phanbuey]

I still remember how sad i was when AMD spun off Glofo - in retrospect it was the right move, but man they almost didn't make it after that.

 

[TheLostSwede]

Me who is someone who loves all things tech I really want intel to turn this around because if all we have is TSMC for silicon gamers are going to get the shaft over and over. It sucks that Samsung is also not doing too well we really need at least a second player for advanced chip making.

Will it actually help who knows but having only 1 player is never a good thing.

Oh, I'm all for competition and having a single, leading edge foundry would be terrible. Intel as a chip "designer" isn't going anywhere any time soon though, but the question is if the new leadership will allow them to stay competitive for now. Maybe it'll be a good thing for them to be the underdog for a while, but I doubt it'd humble them, they're a US company after all.

I still remember how sad i was when AMD spun off Glofo - in retrospect it was the right move, but man they almost didn't make it after that.

It also shows how important the right leadership is, Intel clearly hasn't had that for a long time and I'm not sure this is it either.
Can't say I miss this guy being in charge of AMD, although he wasn't nearly as bad as a couple of his predecessors.

 

[Sol_Badguy]

It also shows how important the right leadership is, Intel clearly hasn't had that for a long time and I'm not sure this is it either.

Is he a leader or a boss?

 

[oxrufiioxo]

Yeah, I'm not overly concerned about intel when it comes to making CPUs giving how their foundries are doing they are likely better off with TSMC.

That still sucks for us though if only one silicon maker has all the top companies locked up and can just set the price to whatever makes the bottom line look the best.

 

[SRB151]

When I saw the company jettison Pat right in the middle of straightening out the foundry side, I wasn't sure what the board was up to. When they hired Tan, I stwasn't sure.. Not that I've seen all of the moves that he's made so far, the mass layoffs, cancelling outside sales of 18A, and now, stating that 14A will be cancelled without external customers (when he just cancelled the pilot for that idea, and can't guarantee 14A will work as promised but needs to sell 14A in order to bring it to market., I'm convinced Tan is there to right the ship for sale to vulture capitalists and salvage the stock price, not right the ship as a chipmaker.

Remember, Intel can't sell of it's gem, the x86 license, without AMD's permission. And without foundries, Intel is just another fabless designer that can probably only be sold without the x86 going with it.

 

[TheLostSwede]

Is he a leader or a boss?
View attachment 409305

Yeah, good question. So far he seems to be a boss in my book, but I haven't paid that close attention to be honest.

Yeah, I'm not overly concerned about intel when it comes to making CPUs giving how their foundries are doing they are likely better off with TSMC.

That still sucks for us though if only one silicon maker has all the top companies locked up and can just set the price to whatever makes the bottom line look the best.

In fairness to TSMC, they have at least until recently, been quite Taiwanese and not done what I think many other companies would've done in their situation and doubled or trebled their prices just because they can. A lot of the cost increases they're forwarding to their customers are real world cost increases. That said, I'm not so sure that is still the case with their latest nodes, as it seems like they're now worried about a few things. First you have the new Japanese Rapidus consortium which I think is worrying TSMC to a degree and then you have new of new types of ICs that are no longer based on silicon, even though they might still be a decade away. This is making TSMC concerned about its future and it seems likely they're trying to make sure they have enough money in the bank for when a day comes where they have to re-learn everything they know about making chips.
TSMC is obviously investing in a lot of other things as well, to make sure they can continue to produce the kind of final chips that their customers need/want and this isn't free either, but is often not taken into account when the cost per wafer is being discussed. TSMC re-invests a lot back into the company to be able to stay on the cutting edge, which is getting silly expensive today and this is also why it seems like Lip-Bu Tan wants to see that Intel is getting something back on its investments in cutting edge nodes, since the foundry part is technically a secondary business for Intel.

@SRB151 x86 is actually quite worthless today, since almost everything has moved to x64, which was an AMD design from the beginning, even though Intel has added its own bits to it since then. In a modern operating system, very very little still needs anything legacy x86. That doesn't mean Intel doesn't have some useful patents still, but x86 ain't it.

 

[oxrufiioxo]

In fairness to TSMC, they have at least until recently, been quite Taiwanese and not done what I think many other companies would've done in their situation and doubled or trebled their prices just because they can. A lot of the cost increases they're forwarding to their customers are real world cost increases. That said, I'm not so sure that is still the case with their latest nodes, as it seems like they're now worried about a few things. First you have the new Japanese Rapidus consortium which I think is worrying TSMC to a degree and then you have new of new types of ICs that are no longer based on silicon, even though they might still be a decade away. This is making TSMC concerned about its future and it seems likely they're trying to make sure they have enough money in the bank for when a day comes where they have to re-learn everything they know about making chips.
TSMC is obviously investing in a lot of other things as well, to make sure they can continue to produce the kind of final chips that their customers need/want and this isn't free either, but is often not taken into account when the cost per wafer is being discussed. TSMC re-invests a lot back into the company to be able to stay on the cutting edge, which is getting silly expensive today and this is also why it seems like Lip-Bu Tan wants to see that Intel is getting something back on its investments in cutting edge nodes, since the foundry part is technically a secondary business for Intel.

Even if they don't directly do it if everyone uses them we will have less of each product with all the tech companies both bidding for allocation and getting limited allocation which means they are going to focus on the professional market for everything they make.

Now even if there was ample silicon would gamers still get screwed probably but at least that won't be a factor lol.

I'm not blaming TSMC in the sense that we have terrible pricing due to them they should charge whatever they feel is right for a specific product node but just having nobody else even if they don't raise prices significantly would still be bad for consumers because distributors and scalpers will screw us instead lol.

 

[freeagent]

I want Intel to succeed, and I hope they do!

Monopolies are how we got into this mess to begin with.

 

[bonehead123]

Is he a leader or a boss?
View attachment 409305

Well back in the day, the old saying was:

"If you wanna be a top manager, you can either lead, follow or get the f*ck out of the way"

I sincerely hope that Tan da Man is the former, cause otherwise, Intel will surely die a painful death, and as others have already said, having only 1 chip maker will be even MORE painful, especially for us little people who just want affordable chips that work ootb

 

[Visible Noise]

Intel is going to be fine. The US DOD won’t let them go under.

 

[SRB151]

@SRB151 x86 is actually quite worthless today, since almost everything has moved to x64, which was an AMD design from the beginning, even though Intel has added its own bits to it since then. In a modern operating system, very very little still needs anything legacy x86. That doesn't mean Intel doesn't have some useful patents still, but x86 ain't it.

I think you missed the point. The cross licensing agreement applies to all x86 related items between Intel and AMD. SSE, x64, etc. are all under the agreement to prevent Intel from rewriting the spec to lock out AMD. That's mostly what the Itanic was all about. If Intel could have produced a new server architecture without x86, they could have cornered the server market. And since AMD sank it by creating x64 on top of x86, AMD was forced to surrender it to Intel per the cross license.

In other words, only Intel and AMD can make x64 chips, and the terms of the cross license that apply to a sale of the license still apply as well.

 

[Hecate91]

having only 1 chip maker will be even MORE painful, especially for us little people who just want affordable chips that work ootb

I want competition as well, though AMD is far from even being close to a monopoly, and Intel isn't going anywhere as long as they keep getting govt money to keep their fabs running. Intel still has the OEM market and brand recognition from the average consumer.
But I've had no issues with AMD cpu's running out of the box.

 

[SRB151]

I want competition as well, though AMD is far from even being close to a monopoly, and Intel isn't going anywhere as long as they keep getting govt money to keep their fabs running. Intel still has the OEM market and brand recognition from the average consumer.
But I've had no issues with AMD cpu's running out of the box.

Pat got the money for building the new fabs that Tan is canceling left and right. I think they're on their own as long as the goal is string the government along without really building a new fab (or keep the old ones running, for that matter).

 

[Dr. Dro]

I think you missed the point. The cross licensing agreement applies to all x86 related items between Intel and AMD. SSE, x64, etc. are all under the agreement to prevent Intel from rewriting the spec to lock out AMD. That's mostly what the Itanic was all about. If Intel could have produced a new server architecture without x86, they could have cornered the server market. And since AMD sank it by creating x64 on top of x86, AMD was forced to surrender it to Intel per the cross license.

In other words, only Intel and AMD can make x64 chips, and the terms of the cross license that apply to a sale of the license still apply as well.

I still believe that Itanium was poorly timed, even considering the massive delays and troubled development of the Merced and McKinley architectures. By 2001, most computers were still running Windows 95/98, 32-bit applications in their relative infancy and full compatibility with 16-bit software was still necessary. The whole distribution dynamics and logistics made even Windows Me something that was hard to accept, as well.

One of the chief complaints about that OS is that it was unstable (largely a byproduct of VXD being dropped and almost every WDM device driver being written for Windows 98 SE instead) and that MS-DOS mode was removed, Windows XP was still some time away, and most machines that were in operation for these markets were barely powerful enough to run NT 4, something completely counter-intuitive and very expensive for the average consumer at the time. Dropping an all-new, pure 64-bit ISA in that market was never going to work. Heck, unless you're Apple with its tremendous amount of vertical integration and have zero regard for backwards compatibility, it's a difficult proposition today. With modern compilers and advanced software emulation, I don't believe Itanium would have flopped anywhere near as hard, especially if it could pull its weight in benchmarks and priced well.

x86's patent time is slowly ticking, I believe that most essential patents to make an AMD Clawhammer-compatible (1st gen Athlon 64) should be just about expiring or expired very recently, unfortunately Google is very uncooperative and researching that turns out to some of my own posts on this forum about this subject... it's just an educated guess based on patents lasting between 17 to 20 years.

 

[N/A]

I understand that 14A greatly simplifies what 18A already does with high numerical aperture lithography. I'm all for just skipping the nodes and go for 10A.

 

[sLowEnd]

Wasn't it supposed to hinge on 18A? I guess it's hinging on 14A now?

 

[kondamin]

Isn’t intel 3 mature now and ready to be used for other projects?

 

[TheEndIsNear]

I am of the opinion that this guy is here to tank intel

 

[TheLostSwede]

Even if they don't directly do it if everyone uses them we will have less of each product with all the tech companies both bidding for allocation and getting limited allocation which means they are going to focus on the professional market for everything they make.

Now even if there was ample silicon would gamers still get screwed probably but at least that won't be a factor lol.

I'm not blaming TSMC in the sense that we have terrible pricing due to them they should charge whatever they feel is right for a specific product node but just having nobody else even if they don't raise prices significantly would still be bad for consumers because distributors and scalpers will screw us instead lol.

Let's hope Rapidus can deliver on their promise, although 2 nm in 2027 might not be good enough for modern graphics chips by then...

Intel is going to be fine. The US DOD won’t let them go under.

But would you want an Intel that focuses on making chips for them and no longer for their current markets?
Defence is always behind the curve when it comes to chips and they're most likely happy with chips from a few years ago.

 

[bgx]

Now I can see the difference between Pat and LBT.

It was said that Pat bet intel company on 18A. Seems like there will be very little external customers to 18A.

LBT winds down the investment to foundries as this is too dangerous and too coslty without any guarantees it will bring revenues, while keeping possibilities to expand in case customers are coming in.

Looks like a reasonable and more secured strategy to me.

made 40% profit with intel share this year (buying when low - 18$ and selling at around 24$ several time this year as intel keep bouncing).