
Intel Plunges as It Weighs Exit from Manufacturing Chips - apta
https://www.bloomberg.com/news/articles/2020-07-24/intel-considers-what-was-once-heresy-not-manufacturing-chips
======
greenyoda
The CEO's quote doesn't suggest an "exit from manufacturing chips", contrary
to the sensational headline. Rather, he talks about outsourcing production in
exceptional situations. This is what he said:

> _“To the extent that we need to use somebody else’s process technology and
> we call those contingency plans, we will be prepared to do that. That gives
> us much more optionality and flexibility. So in the event there is a process
> slip, we can try something rather than make it all ourselves.”_

~~~
tgflynn
But there's already been a process slip.

> Intel’s current best technology, known as 10 nanometer in the industry, was
> scheduled to appear in 2017 and is only now making it into high-volume
> production. And when the company reported results on Thursday, it said the
> next iteration -- 7 nanometer -- would be delayed by a year.

So a three year delay for 10 nm and an indeterminate one for 7 nm all while
TSMC already has 7 nm in production and is working on 5 nm.

If Intel does start outsourcing EUV, given the very large investments needed
for that technology, I don't see how they would ever recover their lead.

Also this isn't just about Intel. The US invented the semiconductor industry
and has been at it's forefront since the beginning. It looks like that is no
longer the case and that the only company in the world with a cutting edge
semiconductor fab capability is headquartered in a country China claims as its
own.

~~~
exmadscientist
> But there's already been a process slip.

They mean to say "another" process slip, but they've said that so many times
it's starting to look bad. (And if their leadership was less clueless, they'd
realize their mistakes there, but I've digressed....)

Another place the marketers have taken over is in the naming. It's widely
accepted that TSMC 7FF "7nm" is the peer to Intel P1274 "10nm", and general
consensus is that TSMC 5FF "5nm" is the peer to Intel P1276 "7nm".

~~~
tgflynn
> It's widely accepted that TSMC 7FF "7nm" is the peer to Intel P1274 "10nm"

I think there's one huge difference there though. As I understand it TSMC 7nm
is an EUV process while Intel's 10nm is not.

So it looks like the bottom line is TSMC has mastered the next major fab
technology and Intel has not.

~~~
exmadscientist
TSMC's original 7nm process 7FF did not use EUV. They did introduce EUV for
certain layers in N7+, their "second generation" 7nm process. Don't confuse
N7+ with N7P, the performance-improved version of 7FF....

There's more information at [https://fuse.wikichip.org/news/2567/tsmc-
talks-7nm-5nm-yield...](https://fuse.wikichip.org/news/2567/tsmc-
talks-7nm-5nm-yield-and-next-gen-5g-and-hpc-packaging/) or
[https://community.cadence.com/cadence_blogs_8/b/breakfast-
by...](https://community.cadence.com/cadence_blogs_8/b/breakfast-
bytes/posts/tsmc-may-2020) .

(This is why I always try to give the full name of the process, in as much
specificity as I know it; it's very easy to talk at cross purposes about N7+
and N7P despite them being quite different.)

~~~
tgflynn
OK, but it still looks like N7+ has been shipping for almost a year so I think
my main point still stands.

------
supernova87a
A friend of mine likes to quote the advice of an engineering professor: "The
closer your product gets to the physics of a problem, the less money you're
going to make."

With relevance to this situation, I guess the interpretation is that you can
rarely make a lot of money when the competitive advantage is just that you
have 18 months on a certain chip technology before others learn how to do it.
Because the pure knowledge of how to do something can't keep you safe forever.
It seems to be a constantly shrinking margin against others who are getting
more and more sophisticated.

Maybe they saw this and recognized a losing game in part of their territory.
Maybe more attention needs to be paid to what differentiating factor has
become, even if it changes what Intel is about. I have no idea, but I hope
they do!

------
ksec
The title is incorrect to say the least, Intel isn't weighing on Exit from Fab
manufacturing at all. They are simply contemplating the idea of outsourcing.

I think it needs a little more context regarding the reaction from analyst.

> _“You didn’t need to read any more,” Sanford C. Bernstein analyst Stacy
> Rasgon said. “Whatever little credibility they had is out of the window.”_

Few months ago Intel CEO in an Investor meeting promised 7nm by late 2021, and
to regain its lead in manufacturing by 2023 with 5nm GAA ( "Gate All Around"
also known as Nanowire ). That is not entirely impossible considering TSMC is
scheduling their take on GAA with 2nm in 2024. So Intel would be one year
ahead again. Volume will be an order of magnitude smaller but at least Intel
could get that headline win.

So in less than 4 months, Intel is now saying the 7nm is delayed by 6 months,
and dont expect 7nm consumer product until _late 2022 and 2023_.

That is why they have loss all credibility. They burned most of it with 10nm,
and whatever is left is now gone with this report as well.

Also note something that is not discussed anywhere, ( At least as far as I can
tell ). Why a 6 months delay of 7nm, initially scheduled late 2021, then
suddenly becomes "dont expect 7nm consumer product until late 2022 and 2023. "
Which is 12-14 months delay.

------
tgflynn
This topic seems to be of prime importance to the US tech industry. I'm very
surprised no post on this has yet made it to the front page.

~~~
wmf
It's been discussed pretty extensively:
[https://news.ycombinator.com/item?id=23932082](https://news.ycombinator.com/item?id=23932082)

~~~
tgflynn
Well that's odd. I've been scanning the front page quite frequently since I
heard about this on Friday and yet somehow missed this.

------
jmpman
Will real estate next to their fabs be the next thing to plunge? There are
going to be many unemployed engineers in a concentrated area with minimal
transferable skills to local companies outside of the fab.

~~~
rbecker
The fabs will probably keep being used for a long time to come, even if Intel
exits. There's a large market even for non-cutting-edge nodes.

------
person_of_color
This is bad for our country.

~~~
236dev
In terms of security, Intel has been bad for a while. The last good chip was
the Intel Core 2 Duo. Everything since then has had basically spyware on the
processor via the Intel Management Engine. It doesn't matter if it was
manufactured/designed in the US or not when you have exploitable proprietary
software running on your processor. The only way to truly be free and have a
decent insurance of security is with a fully open source, free system which
includes your processor and bios.

