Thread regarding Intel Corp. layoffs

Future of Intel

The future of Intel is to split the company in two, one is the silicon design group (CCG, DCAI, NEX, etc) and the other is Intel Foundry. If the company splits right now immediately immense shareholder value will be unlocked. CCG alone will sell for far more than the current overall Intel Market cap. It is foundry that is a money losing burden that is dragging the rest of the company down.

In the long run, even foundry will be break even in a worst-case scenario. The US government, regardless of who is in charge and all US based companies like NVIDIA, AMD, AMAZON, MSFT, QCOM, etc have a vested interest in seeing Intel Foundry succeed.

Both to deter risk of too much reliance on TSMC in Taiwan ... geopolitical risk but also to have better negotiation power. If Intel foundry fails ... TSMC can basically price their wafers however they way and there is nothing the customers can do about it, TSMC will be a king maker.

Intel foundry alone will sell for far more than the current Intel market cap if nothing except for it's factories, processes, employees and fab manufacturing tools! If it is truly open market, it would be bought up almost immediately by international competitors or even one of the major domestic companies. $100B is really chump change for Amazon, NVIDIA, MSFT, Apple, etc. The proprietary access to tools alone is worth $100B.

To turn Intel around, it really needs more cuts. I suspect 15K is just a start, with another 10K from voluntary attrition (from people who leave afterwards after losing trust and culture). But Intel should be around 80K or less. Compare total combined workforce of TSMC, NVIDIA, AMD with Intel. Too much bloat at Intel even after the current HC reductions. Then be methodical in R&D, no need to be fast at all just actually have a real shot of executing. Perhaps pushing on the schedule too hard may be counter productive to real progress. After all ... physics is a real limiter for everyone in the world and sooner or later the advancements will stall and Intel will be able to catch up in all likelihood.

Then it's really a matter of splitting the company up into two. This whole IDM is not going to work, no company will give out their designs 3 years ahead of time to their competition even if they are "independently" managed ... Foundries should not compete with their customers and Intel has basically taken steps towards that vision with the independent split of business units ... sooner or later, it it will happen.  

Most likely a company will make a stock & cash combined offer for Intel, I would estimate $175B to $250B range to have full control. The government will also then not have to babysit this company and keep feeding it free cash grants (non dispersed yet so that will also be a value catalyst when it happens later this quarter... will not wait until new administration to swear in).

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| 1871 views | | 17 replies (last November 8, 2024) | Reply
Post ID: @OP+1vklL1f0

17 replies (most recent on top)

Fu-k Intel..I hope they crash and burn.

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Post ID: @4yto+1vklL1f0

TOO BIG TO FAIL!

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Post ID: @2vld+1vklL1f0

They can't manage the product side, so it should be sold to some company that can handle the scale. The company is still too large to be competitive, both in products and foundry.

Maybe if they split off each division and retained a majority stake, then at least those smaller entities could stand on their own. The Intel conglomerate is turning out like what happened to GE.

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Post ID: @2cxu+1vklL1f0

If you are going to choose between product or foundry, go with foundry. Prodco has no growth and you know in this capitalist world, no growth means death. Foundry is a better bet due to geopolitical dynamics.

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Post ID: @1nqb+1vklL1f0

CraigB has a point; if Intel regain process/package leadership, splitting is not necessary. The problem is that requires a lot money, but we can’t bankroll ourselves by our current product lines. We need to grow our revenue AND generate positive cash flow. Unfortunately we are losing money. CCG revenue is not growing much. DCAI is supposed to be our growth engine, but it’s losing Xeon market share and have very low operation margin, even lower than CCG’s. Our GPU business is not gaining any traction. Don’t just blame Pat. The real problem is IFS/TD, DCAI and GPU leaders, VPs, Fellows, PEs, who have been failing us for years.

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Post ID: @1xba+1vklL1f0

I feel there are quite some to the point messages at this site and the reactions reflect quite accurately the quality of messages most of the time. The US government can really consult this site for ideas and meaningful actions to take if it wants to restore the US semiconductor dominance.

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Post ID: @1dye+1vklL1f0

Former Craig Barrett suggested breaking up intel is a bad idea...

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Post ID: @1pcd+1vklL1f0

If it does split do everything in you power to get away from the fab side. The fabless side always does well. Amd and ibm. The fabs die a slow death. Globalfoundries

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Post ID: @1zye+1vklL1f0

50K employees need to go still. As simple as that. Leadership is slowly working towards that goal. Did anyone notice Dave announced cost cutting target for 2025 as $17.5B? A few weeks ago Pat mentioned it was $10B. Are you catching my drift based on this evidence?

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Post ID: @1pyn+1vklL1f0

The design side products seems to be not as competitive as the competitor's products using the same TSMC foundry. The fab side is even worse. The best thing to do seems to split up and sell as much as possible and shut down the rest if they can not make on their own.

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Post ID: @1fpj+1vklL1f0

No future

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Post ID: @1tec+1vklL1f0

Hock Tan might be able to slice and dice the product group into shape. The foundry needs government support.

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Post ID: @gjn+1vklL1f0

Intel is shooting its own foot. There is not that many competitors in industry. Intel failed by its own missed execution, bad planning, bad culture of telling lied, and low technical expertise remains (since most experienced people are forced out).

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Post ID: @mhy+1vklL1f0

Neither will be able to survive on their right now, that is the problem. They both need each other for the time being.

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Post ID: @qmz+1vklL1f0

why do i feel ChatGPT wrote this..

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Post ID: @abe+1vklL1f0

CCG alone will sell for more than NVD, AAPL and QC combined with its vast portfolio of products that are ahead of all competitors.

What delulu.

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Post ID: @zyv+1vklL1f0

Future of Intel is either government bailout or Chapter 11 bankruptcy. Nothing in between!!

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Post ID: @tzf+1vklL1f0

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