Monday, June 25, 2018 [Tweets] [Favorites]

Intel and the Danger of Integration

Ben Thompson:

As Bajarin notes, 7nm for TSMC (or Samsung or Global Foundries) isn’t necessarily better than Intel’s 10nm; chip-labeling isn’t what it used to be. The problem is that Intel’s 10nm process isn’t close to shipping at volume, and the competition’s 7nm processes are. Intel is behind, and its insistence on integration bears a large part of the blame.

[…]

It is perhaps simpler to say that Intel, like Microsoft, has been disrupted. The company’s integrated model resulted in incredible margins for years, and every time there was the possibility of a change in approach Intel’s executives chose to keep those margins. In fact, Intel has followed the script of the disrupted even more than Microsoft: while the decline of the PC finally led to The End of Windows, Intel has spent the last several years propping up its earnings by focusing more and more on the high-end, selling Xeon processors to cloud providers. That approach was certainly good for quarterly earnings, but it meant the company was only deepening the hole it was in with regards to basically everything else. And now, most distressingly of all, the company looks to be on the verge of losing its performance advantage even in high-end applications.

The Menu Bar:

We talk to chip expert Ashraf Eassa of The Motley Fool about how Intel’s chip delays mess with Apple’s roadmap, to what extent Intel is on fire, why Apple is likely moving away from Intel, why Switch may have serious staying power for Nintendo, how Marzipan points to Apple avoiding the Microsoft misstep, speculation about Project Star, a way Apple could get around saying ’No’ to a hybrid, Intel’s ongoing talent hemorrhage, the path for Apple migrating to ARM, a little bit on where AMD stands, and Apple’s bonkers silicon advantage.

Previously: On the Sad State of Macintosh Hardware.

Update (2018-07-03): See also: Steven Sinofsky.

Update (2018-07-11): Jean-Louis Gassée:

Perhaps Otellini truly didn’t believe Apple could sell huge numbers of iPhones — it wasn’t a sure thing at the time. But was there also an unconscious process that blinded him to the iPod’s volumes? More strikingly, why couldn’t Otellini “see” the hundreds of millions of handsets that were being sold by Nokia, RIM/Blackberry, and Windows Mobile licensees? Nokia had sold 265M devices in 2005 and the numbers were climbing rapidly. Not at PC prices, yet, but PC-like unit volumes, nonetheless.

[…]

Just as old Cultures can no longer “see” their origins, Intel pushed under its consciousness the true source of the x86’s superiority: The margins it commanded through the Windows monopoly. Better manufacturing technology became Intel’s “conscious” explanation, but the truth was that in the PC era, non-Windows microprocessors simply couldn’t compete and had to settle for lower prices. The worst part of the Culture dictate is that Intel believed its own story, at least until it stopped working as interlopers such as TSMC came up with competitive technology. How else to explain their sale of their ARM-centered Xscale to Marvell in 2006?

Update (2018-07-20): See also: Vector.

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