[r-bryan]

This scenario is very reminiscent of the leadup to the Innovator's Dilemma. The dinosaurs grow taller and fatter seeking and thriving on the juicy foliage higher up the tree, while the scrappy little mammals claw away at its soft underbelly.

Nobody's going to fabricate semiconductors in their garage. But couldn't someone make a modest profit without first investing $2.0e10, like Intel? Or is it just that the profitability scale is such that if you had an extra $2.0e7 to invest, you're better off buying Intel stock?

[rossdavidh]

1) technically, someone is fabricating semiconductors in their garage, but as regards the world economy your point is still valid: https://hackaday.com/2021/06/29/garage-semiconductor-fab-get...

2) the equipment used in older fabs, is in many cases not even made any more. It's much like why the vinyl record manufacturing took a decade or more to ramp back up when the demand for vinyl records began going up instead of down. Nobody was making that equipment any more. The older fabs don't use the same equipment as the new fabs, except less of it; they use quite different equipment, and in some cases newer equipment actually wouldn't be able to make the older chips. I don't work in semiconductors, but I did from 1989 to 2004, and worked on several cases of trying to move old processes into newer fabs. It's not easy or quick, and in some cases you have to move the old fabs' equipment into the new fab.

[midjji]

Something is very weird with intel. Compared to fang pe around 30 or nvidia, amd around 100, intel has 10. Which combined with long term stable decently high profits is insane for an am tech company. Intel has been offered gigantic subsidies to build american fabs, and more recently just fabs period, but they arent, and at least one of these is approaching the point where they might get sued for not having even tried.

The answers I hear range from a deeply embarrassing and complete loss of competency on all levels, but primarily on the fab side, to an utterly incompetent and out of touch leadership. I favor the latter explanation as intel has been underperforming for nearly two decades now. My best guess is that intel has entered its cash cow phase, and will simply phase out product after product as they become obsolete, ending up as a half dead zombie barely supporting a few rare products in a few decades. Problem is, even if thats what is happening, their stock is surprisingly cheap. So it seems analysts seem to know something important I am completely missing.

Not to say they are the only company that fucked up, amd has been offered the same subsidies for building more fabs, and we arent talking 2020, we are talking for more than a decade, and they also havent for very unclear reasons. Amd also fucked up and completely missed machinelearning due to being unwilling to make a convenient interface or even just halfassed support for cuda. But they did that while nvidia went, ah fuck it, well let amd get every major console, and basically only make gpus with graphics ports as a side project.

Amd and nvidia is havent acted optimally and both have failed to exploit what seems like low hanging fruit, but they are highly valued in a way which matches market demand (which has been increasing quickly since 2014, not just 2020), and their improving technology. Intel however, does not even appear to have tried. Performance improvements have been incremental at best, and some "features" like the built in gpus are so terrible they mostly degrade performance.

[bsder]

> I favor the latter explanation as intel has been underperforming for nearly two decades now.

Remember "Only the paranoid survive"?

Well, people steeped in Intel took that to heart. So, when they retired or died, a lot of them had no heir apparent and their knowledge went with them.

[sliken]

No argument on the fab side, but that's easy to outsource. Samsung, TSMC, and Global Foundries will happily make Intel chips.

Alder lake is a good example, from what I can tell it's a market leading core, generally faster than the AMD competition, and a good basis to make future products. Future Intel GPUs seem likely to compete on price/perf, at least when any GPU from the last 3 generations seems to sell out instantly.

[riskneutral]

I don't think that you can build a new semiconductor factory for $20 million (2e7), especially not when there is a chip shortage happening and you need factory equipment containing such chips.

[bluGill]

There is the volume vs cost problem. You could put a fab together for under a million - but to do so your would trade labor for automation. A simple chip that a large fab can make for a profit (amortized) selling for 5 cents each would cost you more than $50,000 each to make. If you only need one chip that price is worth it, but most users of a chip are thinking a lot more and it typically turns out that getting a large fab to do your part is not only cheaper, but faster. Still you can do the highly manual process of making a chip if that is what you want to pay for.

[11thEarlOfMar]

State of the art fabs retail for US$10 Billion. TSMC, Samsung, Intel & China can afford to build them.

(for context, Freedom Tower cost US$2 Billion.)

[amelius]

Perhaps you could do it at a 1000nm node, at very low volumes.