just brew it! wrote:
Now Intel is the one running up hill and into the wind. TSMC has the economies of scale from the smartphone market providing a huge wind at their backs.
Something needs to power all the back-end systems that provide the services those smartphones rely on. And until pretty recently, AMD was not a credible player in the enterprise market. Intel has economies of scale too.
Replace "smartphone" with "PC" and "Intel" with "IBM" and it's a new verse of the same song.
The market for x86 CPUs is approximately 200 million units per year. The market for iPhones alone is about 200 million units per year -- the entire smartphone market is over a billion units per year.
Meanwhile, the costs of moving to new processes continues on the same exponential growth curve they've always been on. https://www.extremetech.com/computing/2 ... ocess-node
“3nm will cost $4 billion to $5 billion in process development, and the fab cost for 40,000 wafers per month will be $15 billion to $20 billion.”
even if these new transistor types can be refined and brought to market: design cost. The price of a 3nm chip is expected to range from between $500M to $1.5B, with the latter figure reserved for a high-end GPU from Nvidia.
Intel *can* afford to pay that amount - they have the profits to fund it. But will that be justifiable to the bean counters and Wall Street? Or will the bean counters conclude that it's cheaper to just outsource production to TSMC and use those profits to pay dividends?
The thing is, I think the bean counters are wrong. Intel isn't going to be able to hang on the way IBM has, just gradually shrinking while paying out dividends checks. Intel has nothing like the vendor lock-in that IBM *still* enjoys with its mainframe business. Nobody cares if their AWS Linux server is running Intel or AMD chips, and soon few may care if it's running ARM. Intel is far more vulnerable than they seem to realize. Losing their manufacturing edge means they compete only on design, and they don't seem to have much of a design edge.
So bottom line... I agree that Intel has the money to stay in the race. But shortsighted beancounter math would say that they don't have the economies of scale to make the investment worthwhile. Yet the beancounters aren't appreciating how fast and far Intel can fall if they are forced to compete on design alone. Intel is at huge risk right now and I'm so skeptical their management knows it or knows what to do about it.
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