> Ann Kelleher, a 24-year Intel veteran, will lead development of 7-nanometer and 5-nanometer chip technology processes. Last week, the company had said the smaller, faster 7-nanometer chipmaking technology was six months behind schedule and it would have to rely more on outside chipmakers to keep its products competitive.
I hope Intel keeps its US-based fabs and continues to upgrade them. It would be a mistake to cede this capacity to outsourcing like so much of our other manufacturing capacity. Interestingly, it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this.
This deindustrialization was driven by Wall Street.
The important metric is return on invested capital.
Manufacturing companies use a lot of capital for their factories. Shut down the factory and outsource to China, and you have the same sales with a lot less capital, so the stock goes up. Great success.
Maybe repeat by having your suppliers do more and more of the engineering. At a certain point, you are just a brand, with no actual engineering capability.
You can't compete with the people who actually know how to make the things. Then you die. See Hewlett Packard.
The US taxing companies on global income at high rates also has an effect. Say you have 50% of your sales outside the US. You pay taxes in the country where you sell the product. Then you have profits overseas. If you bring that cash back to the US, you pay the difference between the corporate rate in country X and the US, which can be a lot, say 15%.
Might as well take that money and use it to pay for manufacturing at e.g. Foxconn. So it's 15% better to invest in manufacturing capacity outside the US.
The poor health care system in the US drives up costs as well, twice what it is in other industrialized countries for worse outcome. Same for cost of housing because zoning laws won't allow building. Google was allowed to build offices in Mountain View but not residential property for the employees to live in. So everyone has to commute from somewhere else, and cost of rent is driven by how much misery you can handle.
Failures in government policy make US workers much more expensive without creating any more value or improving the quality of life for the employees.
> it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this.
This is very common misconception. The US has not deindustrialized other sectors have grown faster. US is the second largest country by industrial output. Third largest if you count EU as comparable unit.
Industrial era is over in all advanced economies. We live in post-industrial societies.
> Interestingly, it seems the US is almost unique in our mass deindustrialization
The UK has vast swathes of poverty in the deindustrialised north of England and other areas. Former mining and heavy industry towns that even today almost 40 years on from deindustrialisation are dominated by insecure, unskilled work and unemployment
>US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this.
yup, I wouldn't necessarily include SK in that list but I'm very displeased at our deindustrialization process. Most/all of it does not make sense outside a tenuous abstract global finance system.
We are losing knowledge and control every time and every day factories are allowed to leave the country.
But running a fab is a huge cost and liability while all the competition is outsourcing to TSMC. Because the process is so difficult, I think it makes sense to only have fabs that work for multiple companies. I do think US chip companies (Intel, AMD, Nvidia) and government should get together and start a fab by themselves.
> it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this.
Entire Central Europe (Poland, Slovakia, Hungary etc.) is filled with German manufacturing plants. The Germans have done plenty of deindustrialization themselves.
>Interestingly, it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this.
Related to the dollar being global reserve currency, which encourages a trade deficit. The US has a deficit equal to the next 15 biggest deficits combined. On the other hand, Germany, Japan and South Korea are top 5 trade surpluses.
The US hasn't deindustrialized at all. Industrial production has increased pretty consistently as far back as I can find data.
What has increased in pace, though, is capacity per person, so manufacturing _jobs_ have decreased. It's less of a geopolitical issue and more of a domestic employment issue.
Yes. Intel's failure demonstrates that the US no longer knows how to make chips as good as those of our geopolitical rivals. We're kept safe in large part by our technological edge. If we start falling behind in technology, it's not just a bad decade for Intel, but a hole in national security.
There is of little significance advocating a company to do that. Unless it's regulated and legislated. Any company who willingly gave up such advantange in cost would be a fool and lost its market due to such policies unless that company has other unique advantange to keep their market position. People like to talk about how they love "locally-sourced products" until they realized they had to pay double or triple.
Just spent 3 months in Hillsboro, Oregon, and Intel construction work there is full speed ahead it seems. Of course that could change pretty quickly, but right now it sure looks like they intend to keep fabs going in the US.
A CEO who is really a CFO is probably not what Intel needs right now. It's clear that their engineering culture is compromised, and i would hope that Intel would go back to their roots.
"Renduchintala was one of several key hires from outside Intel, which had been famous in Silicon Valley for developing and promoting talent from within. He was hired as part of a strategy to go after broader markets than the central processing units, or CPUs, the company became known for in the PC era."
I feel like this will go down in history as one of technology's most expensive decisions (that's not a knock on Renduchintala as much as it's my own astonishment at Intel thinking they were safe as recently as 2015).
I'm also a bit saddened by this. It confirms what we all suspected but what I secretly hoped wasn't true.
Intel for over a decade coyly hinted they had aces up their sleeves that would already have been played if they faced more competition. Graphene got kicked around in conversations for a while and then when that turned out to be a no go they talked about black phosphorus.
So after all that, aside from marginal tweaks and pretty meager die shrinks here and there, they were doing.. nothing?.. for ten years?
I mean, trying and failing isn't the same as doing nothing. But regardless, necessity is the mother of invention, so I'm sure they'll figure something out. They have 20b of cash (1/4 of AMD's total market cap) and their profits are damn good.
Make no mistake, Intel is very much aware this is a do or die situation, and I expect them to deploy all the resources at their disposal to fight both AMD and ARM. They don't have much debt and can borrow heavily and at great rates if necessary.
> "Renduchintala was one of several key hires from outside Intel, which had been famous in Silicon Valley for developing and promoting talent from within."
Which was, IMO, one of the reasons why I left Intel. I interned there and did a 2-year stint.
What I saw was a culture where almost everyone who was there began their career at Intel, or at least joined very early in their career. No one was really aware of what the rest of the industry did.
In a way, Intel used to be a FAANG, but became a victim of its success as a great place to work. The culture was so insular that they lost touch with the rest of the field.
So they promoted the CFO to CEO and now they are firing the chief engineer - that tells a lot on where the company is going and I'm afraid it's not a good place.
"If you were a product person at IBM or Xerox, so you make a better copier or computer. So what? When you have monopoly market share, the company's not any more successful.
So the people that can make the company more successful are sales and marketing people, and they end up running the companies. And the product people get driven out of the decision making forums, and the companies forget what it means to make great products. The product sensibility and the product genius that brought them to that monopolistic position gets rotted out by people running these companies that have no conception of a good product versus a bad product."
Intel processor architecture is not a leading design for 2020. Intel security is a nightmare, think Meltdown and many others. The whole BIOS and ME stuff are nightmares. So every setback for Intel could be a step forward for the IT industry and for software development. Who is worried that we don't use steam engines any more and their manufacturers have disappeared from the market? Unfortunately the long-lasting close-to-monopoly of Intel has not left too much room for new winners to develop.
Expected outcome for the delays in 10nm and now the 7nm fabrication nodes...
What I find surprising is:
1. This former chief engineer was originally poached from Qualcomm back in 2016. Qualcomm was (and remains) not comparable to Intel for market and silicon development, so why was this hire made and picked to run the entire division?
2. The original group, Technology, Systems Architecture and Client Group (TSAC) is monolithic. For as a critical item as fabrication node development, that seems counter-intuitive.
I work at a hard tech startup, and all I have been seeing are delays in launching our product. I keep seeing more work as work gets done. Much of our progress till date has been incremental. It came from either fixing bugs in sprints or unlocking new capabilities by solving hard problems.
I have never understood the point of timing work. Work takes as much "time" as it needs for getting done. It can't be accurately estimated with out actually spending time actually working on it. Clarity seems to be the most critical piece for productivity for me. Drive that, and people just can't help but work. Dealing with drudgery seems inevitable.
Add on top of this people's incompetence or I should say unreadiness for situation, it irks the managers and people responsible for delivery. Delays cascade up. But I think most delays are due to unrealistic expectations of people higher up. Irony being the expectations set by the ones that are supposed to carry out the work.
He was also the VP of Qualcomm, which lends some credence to the decision, albeit I would say that may only strengthen your point rather than weaken, given that Qualcomm also outsources their actual chip manufacturing, i.e., is fabless. So maybe this change in direction is to be expected, even if it was not desired, given his background.
> Renduchintala has spent a substantial part of his career in the SoC, mobile and internet of things areas. Prior to joining Intel, he was executive vice president of Qualcomm Technologies Inc. and co-president of Qualcomm CDMA Technologies, where he led its semiconductor business in the computing and mobile segments. He joined Qualcomm in 2004 from Skyworks Solutions Inc./Conexant Systems Inc., where he was vice president and general manager of the company’s Cellular Systems Division. Prior to Skyworks, he spent a decade with Philips Electronics, where he progressed to become vice president of engineering for its consumer communications business.
I was cautiously optimistic for Intel, when they bought Altera in 2015. I was also simultaneously worried for innovation in the FPGA industry.
AFAICT Intel has dropped the ball and failed to produce anything particularly amazing as a result of the 2015 acquisition. I would have been all over that.
Did I miss something? Why didn't they run with this.
How many hardware engineers were lost in the layoffs in 2016? [1] How much aggregate experience at developing a new process node and fixing the issues was lost in those layoffs?
It's often the senior staff who go in these exercises - they are more expensive and are more likely to be attracted to early retirement.
Intel has been fumbling stupid executive decisions that are eroding both their competitive advantage and consumer loyalty. Most recently, they decided to lock memory speed behind enthusiast chipsets.
And they oust an engineer? They are clearly searching for blame in all the wrong places.
I really hope that Intel wakes up: struggling with fab processes is not their biggest problem, their marketing strategy is. There are some really talented engineers in there, but the product segmentation and the way the "features" are sold is in my opinion not good at all.
The title is misleading. From the article it sounds like the chief engineering manager is leaving. Still not a great sign, but quite different from a chief engineer leaving. Some might argue that that's what happened with the earlier departure if Jim Keller, but Keller probably didn't do that much engineering anymore either.
My understand is intel is in this situation exactly because they don't use EUV - but "older gen" DUV - deep ultra violet and are pushing the technology farther by upping the scaling factor see[0] for more information
[+] [-] ghostcluster|5 years ago|reply
I hope Intel keeps its US-based fabs and continues to upgrade them. It would be a mistake to cede this capacity to outsourcing like so much of our other manufacturing capacity. Interestingly, it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this.
[+] [-] jake_morrison|5 years ago|reply
Manufacturing companies use a lot of capital for their factories. Shut down the factory and outsource to China, and you have the same sales with a lot less capital, so the stock goes up. Great success.
Maybe repeat by having your suppliers do more and more of the engineering. At a certain point, you are just a brand, with no actual engineering capability.
You can't compete with the people who actually know how to make the things. Then you die. See Hewlett Packard.
The US taxing companies on global income at high rates also has an effect. Say you have 50% of your sales outside the US. You pay taxes in the country where you sell the product. Then you have profits overseas. If you bring that cash back to the US, you pay the difference between the corporate rate in country X and the US, which can be a lot, say 15%. Might as well take that money and use it to pay for manufacturing at e.g. Foxconn. So it's 15% better to invest in manufacturing capacity outside the US.
The poor health care system in the US drives up costs as well, twice what it is in other industrialized countries for worse outcome. Same for cost of housing because zoning laws won't allow building. Google was allowed to build offices in Mountain View but not residential property for the employees to live in. So everyone has to commute from somewhere else, and cost of rent is driven by how much misery you can handle.
Failures in government policy make US workers much more expensive without creating any more value or improving the quality of life for the employees.
[+] [-] jjcon|5 years ago|reply
The US manufacturing share of real GDP has been pretty much unchanged since the 40s - ie it’s growth has kept up with the rest of the economy.
https://www.stlouisfed.org/~/media/Blog/2017/April/BlogImage...
[+] [-] nabla9|5 years ago|reply
This is very common misconception. The US has not deindustrialized other sectors have grown faster. US is the second largest country by industrial output. Third largest if you count EU as comparable unit.
Industrial era is over in all advanced economies. We live in post-industrial societies.
[+] [-] gmtx725|5 years ago|reply
The UK has vast swathes of poverty in the deindustrialised north of England and other areas. Former mining and heavy industry towns that even today almost 40 years on from deindustrialisation are dominated by insecure, unskilled work and unemployment
[+] [-] qserasera|5 years ago|reply
>US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this.
yup, I wouldn't necessarily include SK in that list but I'm very displeased at our deindustrialization process. Most/all of it does not make sense outside a tenuous abstract global finance system.
We are losing knowledge and control every time and every day factories are allowed to leave the country.
[+] [-] whazor|5 years ago|reply
[+] [-] burntoutfire|5 years ago|reply
Entire Central Europe (Poland, Slovakia, Hungary etc.) is filled with German manufacturing plants. The Germans have done plenty of deindustrialization themselves.
[+] [-] hammock|5 years ago|reply
Related to the dollar being global reserve currency, which encourages a trade deficit. The US has a deficit equal to the next 15 biggest deficits combined. On the other hand, Germany, Japan and South Korea are top 5 trade surpluses.
[+] [-] curiousllama|5 years ago|reply
What has increased in pace, though, is capacity per person, so manufacturing _jobs_ have decreased. It's less of a geopolitical issue and more of a domestic employment issue.
https://fred.stlouisfed.org/series/INDPRO
https://fred.stlouisfed.org/series/CAPB50001SQ
[+] [-] quotemstr|5 years ago|reply
[+] [-] criddell|5 years ago|reply
[+] [-] knubie|5 years ago|reply
Those countries also have much higher trade barriers. The US is almost unique in how few trade trade restrictions they (used to) have.
[+] [-] beaunative|5 years ago|reply
[+] [-] noir_lord|5 years ago|reply
UK did it as well, we let Arm be sold to foreign investors - I wonder if the French or German government would have allowed that sale.
[+] [-] chkaloon|5 years ago|reply
[+] [-] oblio|5 years ago|reply
The UK, Belgium did the same. The whole Communist Bloc also did it (for different reasons).
[+] [-] numlock86|5 years ago|reply
> invest into long term stability
Well, you have to choose one.
[+] [-] rehitman|5 years ago|reply
[+] [-] InTheArena|5 years ago|reply
[+] [-] headmelted|5 years ago|reply
I feel like this will go down in history as one of technology's most expensive decisions (that's not a knock on Renduchintala as much as it's my own astonishment at Intel thinking they were safe as recently as 2015).
I'm also a bit saddened by this. It confirms what we all suspected but what I secretly hoped wasn't true.
Intel for over a decade coyly hinted they had aces up their sleeves that would already have been played if they faced more competition. Graphene got kicked around in conversations for a while and then when that turned out to be a no go they talked about black phosphorus.
So after all that, aside from marginal tweaks and pretty meager die shrinks here and there, they were doing.. nothing?.. for ten years?
[+] [-] smabie|5 years ago|reply
Make no mistake, Intel is very much aware this is a do or die situation, and I expect them to deploy all the resources at their disposal to fight both AMD and ARM. They don't have much debt and can borrow heavily and at great rates if necessary.
[+] [-] gwbas1c|5 years ago|reply
Which was, IMO, one of the reasons why I left Intel. I interned there and did a 2-year stint.
What I saw was a culture where almost everyone who was there began their career at Intel, or at least joined very early in their career. No one was really aware of what the rest of the industry did.
In a way, Intel used to be a FAANG, but became a victim of its success as a great place to work. The culture was so insular that they lost touch with the rest of the field.
[+] [-] spydum|5 years ago|reply
https://www.anandtech.com/show/15846/jim-keller-resigns-from...
[+] [-] mastazi|5 years ago|reply
[+] [-] coopierez|5 years ago|reply
"If you were a product person at IBM or Xerox, so you make a better copier or computer. So what? When you have monopoly market share, the company's not any more successful.
So the people that can make the company more successful are sales and marketing people, and they end up running the companies. And the product people get driven out of the decision making forums, and the companies forget what it means to make great products. The product sensibility and the product genius that brought them to that monopolistic position gets rotted out by people running these companies that have no conception of a good product versus a bad product."
[+] [-] b34r|5 years ago|reply
[+] [-] usr1106|5 years ago|reply
[+] [-] maxpert|5 years ago|reply
[+] [-] Zenst|5 years ago|reply
[+] [-] MangoCoffee|5 years ago|reply
Intel still hold x86 license to make x86 chip. the worst outcome maybe Intel became fab less like AMD and just focus on design.
[+] [-] dreamcompiler|5 years ago|reply
[+] [-] paulpan|5 years ago|reply
What I find surprising is:
1. This former chief engineer was originally poached from Qualcomm back in 2016. Qualcomm was (and remains) not comparable to Intel for market and silicon development, so why was this hire made and picked to run the entire division?
2. The original group, Technology, Systems Architecture and Client Group (TSAC) is monolithic. For as a critical item as fabrication node development, that seems counter-intuitive.
[+] [-] metalliqaz|5 years ago|reply
[+] [-] ghostcluster|5 years ago|reply
[+] [-] elnik|5 years ago|reply
I work at a hard tech startup, and all I have been seeing are delays in launching our product. I keep seeing more work as work gets done. Much of our progress till date has been incremental. It came from either fixing bugs in sprints or unlocking new capabilities by solving hard problems.
I have never understood the point of timing work. Work takes as much "time" as it needs for getting done. It can't be accurately estimated with out actually spending time actually working on it. Clarity seems to be the most critical piece for productivity for me. Drive that, and people just can't help but work. Dealing with drudgery seems inevitable.
Add on top of this people's incompetence or I should say unreadiness for situation, it irks the managers and people responsible for delivery. Delays cascade up. But I think most delays are due to unrealistic expectations of people higher up. Irony being the expectations set by the ones that are supposed to carry out the work.
[+] [-] baybal2|5 years ago|reply
> widely seen as a No. 2 to Swan,
> has been on Accenture’s (ACN.N) board since April 2018.
> Renduchintala eventually took responsibly for turning around Intel’s process technology,
A very odd choice of a person to develop a fab process
[+] [-] basilgohar|5 years ago|reply
[+] [-] qppo|5 years ago|reply
> Renduchintala has spent a substantial part of his career in the SoC, mobile and internet of things areas. Prior to joining Intel, he was executive vice president of Qualcomm Technologies Inc. and co-president of Qualcomm CDMA Technologies, where he led its semiconductor business in the computing and mobile segments. He joined Qualcomm in 2004 from Skyworks Solutions Inc./Conexant Systems Inc., where he was vice president and general manager of the company’s Cellular Systems Division. Prior to Skyworks, he spent a decade with Philips Electronics, where he progressed to become vice president of engineering for its consumer communications business.
https://newsroom.intel.com/biography/dr-murthy-renduchintala...
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] purpleidea|5 years ago|reply
AFAICT Intel has dropped the ball and failed to produce anything particularly amazing as a result of the 2015 acquisition. I would have been all over that.
Did I miss something? Why didn't they run with this.
[+] [-] klelatti|5 years ago|reply
It's often the senior staff who go in these exercises - they are more expensive and are more likely to be attracted to early retirement.
[1] https://www.oregonlive.com/silicon-forest/2016/04/intel_quar...
[+] [-] zamalek|5 years ago|reply
And they oust an engineer? They are clearly searching for blame in all the wrong places.
[+] [-] lbill|5 years ago|reply
Linus Tech Tips made a great video about it: https://www.youtube.com/watch?v=Skry6cKyz50
[+] [-] supernova87a|5 years ago|reply
[+] [-] Uhhrrr|5 years ago|reply
[+] [-] atq2119|5 years ago|reply
[+] [-] mhh__|5 years ago|reply
[+] [-] MangoCoffee|5 years ago|reply
TSMC make it work while Intel struggle. craft is real.
[+] [-] edude03|5 years ago|reply
[0]: https://www.anandtech.com/show/13683/intel-euvenabled-7nm-pr...