Can this legendary semiconductor veteran turn decay into magic again?
After defeating AMD with its Core processor in 2006, Intel gradually experienced the pleasure of making money by "lying down". Without competitors at
, Intel, which is the "dominant" one, will no longer have the motivation to work hard to develop. During 2015-2020, the performance of the mainstream core performance of the intergenerational Core was mostly less than 10%, and the "beautiful name" of " toothpaste factory " gradually spread.
However, when Intel dominated and stopped moving forward, the seemingly calm semiconductor industry was actually undercurrents.
AMD, who has been lying on firewood for ten years, developed a Zen architecture with strong performance and was a great success under the leadership of "Mama Su" and "Silicon Immortal" Jim Keller, brought Intel, the former "King of x86" from the altar; Apple is also rising to the forefront of the road to self-developed processors, and has the confidence to give up Intel's core; Nvidia and Qualcomm are more interested in entering Intel's main business after overtaking on the curve, and are head-on with " Blue Giant ".
Since 2020, under the attack of all parties, Intel has been increasingly struggling. The total market share of CPU fell from nearly 80% a year ago to less than 65%, and its stock price has also fallen to the level two years ago.
, feeling the crisis, Intel realized that it was time to take self-help actions.
In the spring of 2021, a legendary man, , the eighth Intel CEO, the first Intel CTO, 80486 architect, and 30-year-old Intel veteran, Pat Kirsinger, returned to his old boss who had been away for 12 years at the age of 60. On the same day, Intel's stock price once rose by more than 7%.
The changes brought by Pat Kirsinger were also immediate. A group of famous semiconductor giants put down their thermos and followed him to join Intel in , , in .
Half a year later, this "blue giant" who is now slightly down and out has reappeared in the grand occasion of releasing two generations of high-performance CPUs in one year, as if it was reborn. In terms of recent decryption performance, the 12th generation Core, built with intel7 (10nm) technology and new architecture, has significantly improved performance and power consumption compared to the previous ones. During 2015-2020, Intel's "toothpaste-squeezing" performance improvements of less than 10% of Intel's intergenerational CPUs, compared with Intel's 2021 completely slapped the "toothpaste".
All of this is naturally inseparable from Pat Kirsinger's transformation of decay into magic. The story between this man and Intel will start 50 years ago.
Recalling the past, the glorious years
Then, these three young talents, both talented and aspiring, set up their own business in an old building in Mount Valle, California, and founded the later world-famous Intel (Intel).
Since the founders are all powerful technical experts in the industry, Intel seems to have a "protagonist halo" born, and can get huge financing effortlessly. According to Arthur Rock, the king of venture capital, later recalled that Noyce and his group visited him with only one and a half pages of profile information. However, in less than five minutes, they were conquered by these three talented scientists. Immediately, as much as $2.5 million in venture capital was transferred to Intel's account.
In this regard, Jerry Sanders , the founder of AMD, also from Fairchild's "Semiconductor West Point Military Academy", once joked with envy:
"Intel took 5 minutes to raise $5 million, but AMD had to spend 5 million minutes to find a way to raise $50,000." After the establishment of
, Intel, which was joined by "the halo of the protagonist", lived up to expectations. Under the leadership of Noyce, it focused on semiconductor memory technology, and gradually grew into the leader of the semiconductor memory industry in the early 1970s.
At the same time, the sharp-eyed Noyce and Moore set their sights on the microprocessor and successfully released "a landmark work" in 1971 - the first commercial computer microprocessor in human history Intel 4004. Subsequently, Intel continued to work hard and developed the famous x86 architecture in 1978, Intel 8086. Taking one step at a time, Intel gradually established the first-mover advantage of calculator microprocessors.
A year later, Pat Gelsinger, who had been living on a farm since childhood, seized an accidental opportunity at the age of 18 and passed an interview with Intel. Without any hesitation, he immediately set off from his alma mater, Lincoln Technical College, boarded the flight to Silicon Valley with great enthusiasm, and went to Intel to work as an electronics technician. Thus, Pat Kirsinger completed his first jump from farm to Silicon Valley.
By the 1980s, Japanese manufacturers entered the dynamic random access memory (DRAM) market. Under the huge impact of Japanese manufacturers, Intel has lost steadily, and its main DRAM business market share quickly dropped from more than 80% in 1974 to less than 5%. In 1984, this figure was only 1.3%. After learning from the pain, Gordon Moore, who had become the CEO of the company at this time, decided to cut off his arm and implement strategic transformation after discussing with Andy Grove. Since then, Intel gradually gave up its memory business, and instead focused on the "heart" component of microcomputer - CPU. It is this bold decision that has established Intel's position as the global chip overlord for decades since then.
During this period, Pat Kirsinger, who was doing odd jobs for the quality inspection team, worked hard in Intel's most basic position, and his weekly working hours are as long as 80-90 hours. At that time, Intel introduced policies to encourage employees to learn. As long as employees can obtain B's average score, Intel would reimburse employees for tuition. Inspired by this policy, Pat Kirsinger, who dreams of becoming an engineer, did not forget to study hard in his hard work. After unremitting efforts, Pat Kirsinger was admitted to the Department of Electronic Engineering of Santa Clara University. This gorgeous transformation from a quality inspector to a top student in the electronics department kicked off Pat Kirsinger's career like a "cheating" in the semiconductor industry.
"Only paranoid can survive" is the strong man's business creed. He also believes that:
"A successful business model must contain the seeds of destroying itself."
Therefore, during his tenure as Intel, he urged employees to constantly test new technologies, new products, explore new sales channels and new customers, and prepare for unexpected changes in their business or technology. At the same time, he established a "constructive confrontation" company culture within the company: he insisted on employees asking each other, while maintaining open communication channels between employees, encouraging people to speak out their ideas, encouraging employees to debate loudly, etc. This series of measures has created a "ruthless" atmosphere for Intel and completely stimulated the "wolf nature" of its employees.
Pat Kirsinger still remembers the severity of Andy Grove more than 30 years later. In 2018, he, who had become the CEO of VMware, recalled in an interview with " Forbes ":
"Andy has been my mentor for 30 years. Meeting him is like going to see a dentist without anesthetics."
Under the crazy encouragement of Andy Grove, Intel quickly embarked on the fast lane of development, successfully transforming from a memory chip manufacturer to the world's largest semiconductor manufacturer, with revenue from $1.9 billion to $26 billion, with an increase of more than 1,300%, becoming one of the few companies that can continue to grow rapidly after a significant adjustment in core business. With this brilliant achievement, Grove has become an idol of countless Silicon Valley entrepreneurs, including , Jobs, and .
's performance has improved significantly, and the stock price will naturally not disappoint. During the period from 1987 to 1998 when this strongman Andy Grove took charge of Intel, the highest increase in Intel's stock price exceeded 5,000%.During this period, Pat Kirsinger "fighted day and night" with circuits in the Department of Electronic Engineering of Santa Clara University. While going to school, he also transferred from the original quality inspection department to the CPU design team , and successfully obtained a bachelor's degree in electrical engineering while working in the 80286 project. Subsequently, Pat Kielsinger, who had just emerged in the semiconductor field, successfully passed the master's degree in electrical engineering and computer science at Stanford University, and participated in the research and development of the 80386 project as the "spare tire project" of the iAXP432 processor in the master's degree.
Surprisingly, most of Intel's top talents participated in the research and development of the iAXP432 suffered a tragic loss. By chance, , 80386, developed by Pat Kirsinger during the evening get out of class, became Intel's life-saving straw. Fortunately, thanks to the achievements of Pat Kirsinger and others, 80386 has maintained a leading market position for Intel. With this achievement, Pat Kirsinger has become an "not-selling product" in the eyes of Andy Grove.
After Pat Kielsinger finished his master's career at Stanford, in order to prevent him from pursuing his PhD full-time and leaving Intel, Andy Grove sent him a charming invitation:
"You can drive a simulator at Stanford University, or you can come to Intel to fly a real plane."
No one can resist the call of legend, and
By 1999, the crisis came again. Unlike the 1980s, this crisis came from the United States, and the aggressive competitors targeted Intel's proud CPU product line.
This year, AMD, who has been dormant for many years, released the K7 architecture under the leadership of the CPU wizard "Silicon Immortal" Jim Keller. With the support of the powerful K7 architecture, AMD's Athron processor has completely defeated Intel's Pentium core and became the world's fastest x86 chip. From then on, AMD, which has won the market and reputation, officially jumped to the forefront, competed head-on with Intel, and started its own glorious era step by step.
At this time, Intel, which could not produce competitors, could only watch its market be eaten away by its competitors little by little. Learning from the pain, Intel is determined to increase its scientific research efforts and develop a new architecture as soon as possible to compete with AMD's Ryzen CPU.
In 2001, under the call of Intel's fourth CEO, Krieg Berritt, Pat Kirsinger was ordered to serve as the first CTO in Intel's history, leading the development of a number of key technologies including Wifi, USB, Core , and Xeon.
At the same time, in order to get out of the decline as soon as possible, since 2005, Intel has actually adopted the famous "Pencil Plan" (Tick-Tock) to iterate its products. After it was officially proposed in 2007, the strategy was followed by major semiconductor companies and has been used to this day:
will be about two years as a cycle. Within one cycle, the process process (Tick) will be updated in the first year, and the architecture (Tock) will be updated in the second year, and it will be replaced like a pendulum.
With the unremitting efforts of the technical team led by Pat Kirsinger, the Core 2 series CPU, which beat AMD's performance and power consumption, finally came out in July 2006. Advanced process technology and significantly increased efficiency allowed Intel to achieve a Jedi counterattack. During this period, the argument of "i3 is silent in seconds" even appeared in the market (the lowest-end i3 can almost beat the entire AMD series).
This year, the goddess of luck also stood on Intel's side. At this time, AMD, the world's x86 king, was in a financial crisis because he spent $5.4 billion to "take" ATI (one of the two largest graphics chip manufacturers in the world that year) on July 24. Under the surprise attack of Intel's Core core, AMD, which could not provide R&D funds, had no resistance and quickly fell from its peak and fell into a ten-year low.After
defeated AMD, Intel became the king of x86 in one fell swoop and entered the period of "one-on-one dominance". For the next decade, Intel maintained an absolute lead in the PC processor business, and no rival in the market could match it. Whether it is a PC or a data center, whether it is Apple or , Microsoft and computers, the only priority will be Intel's Core core.
In this glorious decade, Intel's baton was held in the hands of Paul O'Denning for six years. As Intel's fifth CEO, he is the first non-technical executive in Intel's history.
In the seven years of being the helm of Intel, Paul Odening injects more commercial elements into Intel by adjusting business and cost institutions, guiding semiconductor innovation, diversified investment, etc. During this period, Intel's total revenue increased from US$38.826 billion in 2005 to US$53.341 billion in 2012, and its net profit also increased from US$8.664 billion to US$11.005 billion, firmly ranking first in the semiconductor industry.
, driven by strong business performance, Intel's stock price also ushered in an upward trend during this period. Before the financial crisis, Intel's stock price rebounded by more than 70% compared with the trough period in 2006; after the financial crisis, Intel's stock price has been rising rapidly, and in the early 2009-12, the company's stock price was close to double at the highest.
However, a crisis is also quietly brewing in glory. During this period, although Intel was brilliant in revenue data, it still relied on "living on old capital" in technology. Most of the revenue and profits are still contributed by the PC processor business. Paul Odening's attempts in new business are almost wiped out, which has caused the company's stock price to gradually become weak since mid-2012.
At the same time, during Paul O'Dening's CEO, he also made a decision that he would regret for his life - when Jobs came to him, he refused to produce chips for Apple's upcoming iPhone. This decision, which later became known as "the biggest misjudgment in Intel's history", caused the x86 king to miss the opportunity to seize the opportunity in the mobile Internet tide and suffered repeated setbacks when trying to enter the mobile device chip market.
In 2009, when Paul Odning was CEO, Pat Kirsinger chose to leave after nearly three decades of serving Intel. After laying the foundation for Intel's 10nm process, Pat Kirsinger switched to storage manufacturer EMC and continued his brilliant career in the semiconductor industry.
sails against the current, and if you don’t advance, you will retreat
One of the founders and third CEOs of Intel, Andy Grove, wrote a very famous book called "Only Paranoids Can Survive". The book mentions that for a company or individual, it is much more difficult to lead in many aspects than to lead in one aspect. For Intel, which adheres to the IDM model, it is even more difficult to maintain the lead in every link in the entire semiconductor industry chain. It is precisely because of this that Andy Grove established a crazy working culture at Intel and led Intel to a brilliant decade.
However, after defeating AMD in 2006, Intel, which had no competitors, was "cold at the height", gradually lost its "wolf nature" in comfort.
When the sixth CEO O Brian Krzanich was at the helm, it took Intel three years to launch the 14nm process, which completely miscarried the famous "pendulum plan". At the same time, Intel has not made any major breakthroughs in both mobile phone chip business and server chip business at this stage. In 2018, Brian Kozaiqi resigned in a hurry due to a workplace scandal.
replaces Kozaichi's next CEO to manage Intel, and is the company's CFO Bob Swan. Unlike the top six CEOs, Bob Swan, who only joined Intel in 2016, did not have a deep accumulation in the semiconductor business. During Bob Swan's 18-21 years as CEO, although he was able to manage Intel's financially well, he performed a disaster in the technology field. For example, until Bob Swan left office, Intel's CPU was still built with a 14nm process. In contrast, another semiconductor giant, TSMC, had a 7nm process at this time.During this period, consumers who were dissatisfied with Intel's toothpaste squeeze and inefficiency angrily gave it the "famous " of the "toothpaste factory". At the same time, Intel's talent loss during this period was also very serious. For example, Jim Keller, the "Silicon Fairy" who led AMD to develop the K7 architecture to overturn Intel and Apple to develop the A4 and A5 chips, chose to leave just two years after joining the company.
In addition, Bob Swan's use of capital has also been criticized by shareholders. As the market share has reached the ceiling and the development of new technologies has been hindered, the market has been reluctant to give Intel a higher valuation. Therefore, since June 2018, Intel's PE value has remained at around 10.
Since the PE value has been hovering at a low level and is hopeless to achieve a significant increase in the short term, Bob Swan can only consider boosting the stock price by pulling up EPS. Due to the failure to make significant technological progress, there is no hope for a short-term increase in net profit. In order to quickly increase EPS, Bob Swan used the big killer of stock repurchase. During his tenure as Intel, the company invested heavily in stock buybacks many times. However, due to a series of problems such as process delay, product delay, and the rise of competitor AMD, Intel's stock price has only fallen into a large fluctuation and has not risen significantly, which has wiped out a large amount of US dollar invested in the past.
sails against the current, and if you don’t advance, you will retreat. Intel’s stagnation prompts competitors who have smelled the opportunity to overtake work overtime to carry out research and development. When Bob Swan came to his senses, he found that he was powerless to turn the world back.
In February 2021, Intel welcomed Pat Kirsinger back like a savior to replace Bob Swan, becoming the company's eighth CEO O. Like in 2001, Pat Kirsinger, who was appointed in danger again, was once again entrusted by shareholders with high hopes of "turning the tide down and helping the building fall."
Xiaose Qiufeng is again, changing to the world
From the perspective of Intel's revenue structure, PC-related businesses have always been the cornerstone of Intel. Judging from the history of Wen Intel, PC-related businesses are also closely related to Intel's stock price performance.
At the same time, in recent years, relatively high-profit data center business accounts for nearly 30%, becoming the indicator that analysts are most concerned about; the Internet of Things, programmable departments and other businesses have become Intel's new growth points.
is different from the situation when I was restless 12 years ago. Now, Intel, which has been pulled down from the throne, has been jointly encircled by many "rises" in many main business lines including PC, data center, and the Internet of Things.
(1) AMD YES!
As mentioned above, after spending huge sums of money to acquire ATI in 2006, AMD not only had its accounts empty, but also owed billions of dollars to the bank. Due to lack of funds to invest in research and development, AMD has been unable to launch competitors that can compete with Core series CPUs for a long time, and has been in a slump since then and has fallen into a dark decade.
What is wrong with Sai's failure is that the acquisition of ATI caused a financial crisis, but after the CPU market was completely defeated, ATI was able to survive. After thoroughly understanding ATI, AMD won the favor of both Microsoft and Apple, not only obtained the GPU custom order for Apple computers, but also won the ten-year long order for Microsoft game console Xbox. With these orders, AMD was able to survive.
By 2012, AMD, which had poor revenue, had its stock price fell below $5. During this period, netizens often made such jokes about AMD:
"The meaning of AMD's existence is to prevent Intel from suffering antitrust punishment."
When everyone had no expectations for AMD, Dr. Su Zifeng, "Mama Su" saw the opportunity to achieve great things and resolutely joined AMD, which was on the verge of bankruptcy in 2012.
Under her outstanding strategic leadership, AMD has turned a declining trend, becoming organized in organization and management, and has successfully developed an advanced Zen architecture in technology. After successfully launching the first Zen with Groft, AMD turned to TSMC, which had more advanced processes during the Zen2 period, seeking OEM.
With the support of TSMC's advanced 7nm process, AMD's Zen2 processor has begun to emerge.
By the Zen3 period, AMD chips' performance indicators almost surpassed Intel's products of the same period. Computer enthusiasts who have suffered from Intel's "squeezing toothpaste" burst out with the loud slogan of "AMD YES!", cheering for the breaking of the situation of monopoly on the in the CPU market. Subsequently, AMD, which could produce excellent products, was unstoppable, and its market share in the CPU market has been rising to about 40%, which is very likely to regain its prosperity fifteen years ago.
reflected in the stock price, and the capital market also shouted the slogan "AMD YES!". After Dr. Su Zifeng arrived, AMD's stock price also raised an "exponential market".
In 2015, AMD, which had just emerged from the verge of bankruptcy, had a minimum share price of only US$1.61; now, AMD, which has returned strongly, has a stock price of as high as US$157.8. In just six years, AMD's stock price has risen by more than 90 times, with a total market value of up to US$190.6 billion, which is comparable to the market value of its old rival Intel's US$202.4 billion.
It is worth mentioning that AMD, which has digested ATI, has also begun to shine in the GPU field this year. Its newly launched RX 6000 series graphics cards, both in terms of performance and market response, are both back and forth against Nvidia's RTX 3000 series.
In addition, AMD has also performed very well in many fields such as data center business and the Internet of Things, step by step, eroding Intel's market share.
(2) Apple takes revenge, it’s not too late for ten years
At this year’s autumn new product launch conference, Apple used two “ultra-high performance” chips to slap Intel in the face; used the secondary anodized process to blacken the keyboard, resurrecting the “classic”.
The story starts with thirty years ago. In the 1990s, Microsoft and Intel reached an alliance. With the joint efforts of Microsoft and Intel, the Wintel PC compatible phone has grown vigorously and gradually occupied the market. In order to curb this trend, Apple, IBM and Motorola jointly formed the AIM alliance in 1991, and is committed to developing high-performance processors on the POWER architecture proposed by IBM to compete with the Wintel PC camp.
After several years of rapid development, the contradictions in the AIM alliance have gradually emerged. In the late 1990s, IBM believed that Apple's integrated software and hardware strategy affected the promotion of PowerPC, which greatly affected the sales of PowerPC chips, and suggested that Apple give up this strategy. However, Jobs, who had returned to Apple at this time, ruthlessly rejected the offer. Subsequently, the AIM alliance gradually collapsed. Entering the 21st century, the disappointed Motorola and IBM are no longer willing to fully support the research and development of PowerPC series chips, which has led to a crisis in the performance of PowerPC. By 2005, compared with the AMD and Intel chips with excellent performance at that time, the PowerPC chip used in the Powerbook G4 series with excellent design seemed too bad.
At the urging of users, Jobs had to give up Apple's self-developed chips and instead invest in the Intel camp. Since then, the Powerbook G4 series that Apple has worked hard to create has officially withdrawn from the stage of history, and has been replaced by the Macbook series laptops equipped with Intel processors. So, at the WWDC in 2006, the classic scene of Jobs connecting the wafer from Paul O'Dening, who was wearing a space suit, appeared.
Genius computer master Alan Kay There was a famous saying in the 1970s:
"People who really write software seriously should make their own hardware."
Jobs is also a loyal fan of this idea. Therefore, the temporary failure on laptop chips certainly cannot stop his own chip development path. As the mobile tide approaches, Apple, who is fully prepared, successfully developed the A-series chip for iPhone, and achieved great success, once again becoming the trendsetter of the times. Since then, A-series chips have always been the benchmark for mobile phone mobile processor performance. However, due to the natural defects of ARM at this time, Apple's A-series chips in the high-performance field are still far from comparable to Intel's x86 architecture.
So, in more than ten years after the first generation of iPhones, despite the continuous improvement of A-series chips, Apple still honestly used Intel's Core processors on its "productivity tool" - the Mac product line.Just as people were gradually accustomed to Intel's "toothpaste squeezing" behavior in their disgust and believed that the Mac series would continue to use Core core to ensure its smooth operation, Apple, which has accumulated enough experience in ARM architecture , led by Tim Cook , who was criticized for "insufficient innovation and inventory nemesis", unexpectedly brought M1 series chips, using Arm architecture to counterattack Intel's x86 architecture, caught Intel off guard.
was launched at the Apple autumn new product launch conference on October 18 this year, and the various models of Intel CPUs that were brought to compare were even more tragic by Apple using M1 Pro/Max. According to Apple's test data, in terms of CPU performance, the CPU performance of M1 PRO and M1 MAX, which have reached its peak power consumption by 30w, is 1.7 times that of i7-11800H at the same power consumption, and more than twice that of i7-1185G7; from the perspective of GPU performance, the graphics performance comparable to Nvidia 30 series graphics cards has turned the graphics processing performance of Intel Core core into a slag. After
released the M1 Pro/Max chip that beat the core of Intel's contemporary era, Apple changed the previous "thin, simple, and curved" design style on the new Macbook Pro, using tougher straight lines, richer interfaces and pure black keyboard areas to "resurrect" the Powerbook G4, which had to regretfully leave due to its own chip failure.
It is worth mentioning that the Apple processor, which performs so strongly, has also boosted the global market's confidence in ARM architecture processors, and has also impacted the sales of Intel's basic disk - x86 processor. Dean McCarron, chief analyst at Mercury Research, had previously stated:
"Apple's self-developed chips based on Arm architecture provide the required driving force and began to quickly seize the market share of desktops and laptops processors."
From the data, in the third quarter of this year, Arm architecture chips accounted for about 8% of the market share of PC chips, a steadily rising from 7% in the second quarter; in the third quarter of 2020, before the M1 Mac was launched, this data was only 2%.
In response to this, Pat Kirsinger could only say sadly:
"My job is to launch better products and win back their (Apple) business."
(3) Nvidia's great road
AMD fell into a serious financial crisis and entered a dark decade due to its aggressive acquisition of ATI; because its graphics processor partner ATI was acquired by its rival AMD, Intel failed to achieve success in the GPU field for many years. The acquisition of
also caused the intensity of competition in the graphics card market to suddenly decrease, and Nvidia successfully seized this opportunity. Under the leadership of "Lee Yike" Huang Renxun, Nvidia is ahead of the entire industry to fully commercialize the GPU business in the initial vertical application and gaming field. Later, when the AI industry was not favored by the market in the early stages of its development, the "green factory" foreseeed the application of GPUs in the AI market in a forward-looking manner and decisively made R&D investments. These unique technical routes such as
not only allowed Nvidia to survive in the cracks between semiconductor giants such as Intel and AMD, but also laid a solid foundation for Nvidia's subsequent outbreak. Judging from its stock, Nvidia, which has the leading position in the graphics processor and field, has also experienced an explosion since 2015. In just six years from 2015 to 2021, Nvidia's stock price rose by more than 7,000%.
Now Nvidia has expanded its business to areas with more substantial scale and profits such as data centers, professional visualization, smart cars, encrypted digital currency mining, and has built a powerful moat. In particular, in terms of " Internet of Vehicles ", Nvidia performed very well this year, and it was very likely to completely surpass Intel Mobileye.
At the same time, inspired by the great success of Apple's M1 series chips made on the ARM architecture, Nvidia also plans to enter the core CPU territory this year and builds three new processors based on Arm. Among them, Grace is based on the Arm architecture and has a revolutionary data center CPU. Focusing on large data-intensive HPC and AI applications, it will drive AI, cloud and high-performance computing to new heights.
and other businesses are almost all Intel's "core positions". At the same time, Intel, which plans to officially enter the graphics card market next year, will also be "warmly welcomed" by veteran graphics card player Nvidia.
(4) Intel goes to the left, other manufacturers go to? TSMC!
Careful readers may have noticed that TSMC is the success of AMD, Apple and Nvidia.
In the semiconductor industry, each company can be divided into three categories according to its production design and manufacturing capabilities, namely: IDM, Fabless and Foundry.
IDM The company is represented by Intel and Samsung, with both chip design and chip manufacturing, and has a complete industrial chain in the field of chip design and manufacturing.
Fabless refers to a company that only engages in chip design and sales and does not engage in production. This business model is also called the "factory model", represented by manufacturers such as Apple, Huawei, AMD, and Nvidia.
Foundry is a manufacturer that can complete chip manufacturing on its own but does not have the design capabilities, which is commonly known as the "foundry". In this model, TSMC currently performs the best.
At TSMC, Zhang Zhongmou created a business model of "semiconductor foundry", focusing only on pure chip manufacturing functions and leaving design to customers. Therefore, TSMC does not have a competitive relationship with its customers, which has also been favored by many Fables companies. After many years of deep cooperation with Apple, Huawei, AMD, Nvidia and Qualcomm, TSMC, which was originally lagging behind Intel in process processes for many years, , after taking the lead in overcoming the 7nm process process, achieved mass production of 5nm process, achieving a comprehensive lead over Intel.
Under the leadership of Zhang Zhongmou, TSMC has successfully developed from an unknown semiconductor factory to a giant in the semiconductor field, and has also become Intel's strongest competitor in manufacturing.
In addition, it is worth mentioning that Qualcomm, which is interested in entering the Internet of Things, data centers and PC markets, and Alibaba, Tencent, which are beginning to make efforts in professional fields such as server chips, are also Intel's troubles in the future.
veterans return, can Intel regain their lives?
In February 2021, 60-year-old Pat Kirsinger was ordered to return to Intel, which had been away for 12 years. Perhaps the market believes that this legendary semiconductor veteran can once again turn decay into magic. After the news of Pat Kirsinger's return for 12 years, Intel's stock price once rose by more than 7% that day.
After Pat Kirsinger's return, a large number of powerful semiconductor veterans responded to his call and gathered together with Intel, changing the normal situation of Intel's talent outflow for many years.
For example, Glenn Hinton, who was the former chief architect of Intel's first generation Core CPUs, returned after three years of retirement, and was responsible for the design and development of high-performance CPUs; Nick McKeown, a legend in the field of SDN, joined Intel to be responsible for edge computing; Greg Lavender, a former CTO of VMware and a senior Citi executive, served as the company's CTO, etc. Under the leadership of Pat Kissinger, the "Old Boys Legion" who are no longer young in "returned to twenty years old", and was passionately devoted to Intel's revival process.
As a proud disciple of legendary CEO Andy Grove, in the past ten months since Pat Kirsinger served as Intel CEO, he has done many things that are "not Intel" but are "very Intel" that make people feel the glory and pride of Intel in the Andy Grove era.
For example, Pat Kirsingeri went against the crowd and launched a new IDM2.0 strategy, using a third-party chip foundry to supplement its own processes, and specially established an Intel Manufacturing Service Department in order to better integrate into the global chip supply chain; redefine the name of future process nodes and promote process process progress; adopt a more open attitude, and even prepare to provide customers with x86 authorization in order to build a new ecosystem with customers. These strategies have also been supported by a number of semiconductor customers including Amazon AWS and Qualcomm.
At the same time, Pat Kirsinger's ideas are completely different from his predecessor in the use of capital.
mentioned earlier that during the time when former CEO Bob Swan took charge of Intel, the company invested heavily in stock repurchases many times. However, due to a series of problems such as process delays, product delays, and the rise of competitor AMD, Intel's stock price did not rise significantly, and a large amount of US dollar invested in it was wiped out. However, during the ten months Pat Kirsinger took over Intel, Intel has made almost no stock buybacks, but instead increased its R&D investment. The effect of increasing research and development has also begun to appear recently: the 12th-generation Core processor with orderly advancement of 10nm process and a significant increase in performance.
Judging from Intel's latest third-quarter financial report, Pat Kirsinger's efforts have also begun to show results. Regarding the latest financial report, Wall Street News mentioned:
PC-related businesses, the CCG department's revenue was US$9.7 billion, a year-on-year decrease of 2%, slightly higher than the expected US$9.64 billion.
The pan-data center business unit of DCG, which was reorganized in the second quarter, had revenue of US$6.5 billion, a year-on-year increase of 10%, returning to double-digit growth.
IoT segment revenue was US$1.37 billion, a year-on-year increase of 50%, exceeding the expected US$979.5 million. Among them, the IOTG department revenue was US$984 million; the autonomous driving business based on artificial intelligence had revenue of US$326 million, a year-on-year increase of 39%, continuing to set a record.
Programmable Solutions Division PSG revenue was US$478 million, a year-on-year increase of 16%, lower than expected US$493.4 million.
Nonvolatile Storage Solutions Division NSG revenue was US$1.11 billion, down 4.2% year-on-year, but exceeded the market expectations of US$1.02 billion.
Although Intel's performance in the third quarter is remarkable from the data, it may be because it believes that Intel will be difficult to turn around, or because it believes that the high investment in IDM2.0 will not get a return. The market has not paid attention to technology research and development and does not pursue short-term capital market performance. After the release of this financial report, Intel's stock price suffered a heavy blow that day, and fell by more than 9% after the market closed.
In "The Stealing of the Stealing", Eliot Spitzer, the 54th Governor of New York, clearly pointed out the value of high-tech enterprises:
"High-tech enterprises are creative enterprises, and their value and income come from actually creating products."
Review the stories of the semiconductor giant's rise and fall over the past 50 years and the rising and rising newcomers chasing each other, we can also find this. If it is simple and rough, borrowing Jiang Wen's classic lines in "Let the Bullets Fly" to summarize, the essence of high-tech companies is "technology, technology, or technology!"
Perhaps, because of this, Pat Kirsinger dared to propose the IDM2.0 strategy against the public, dared to take huge financial risks and shareholder pressure caused by the decline in performance, and also retain the complete creative capabilities in the field of chip design and manufacturing for Intel.
Perhaps, looking back at the present decades later, it is thanks to Pat Kirsinger's persistence in scientific research and not bowing to the short-term interests of the capital market that Intel has returned to the right track, and the spark of a comeback in the future can survive.
reference materials are as follows, and I would like to express my gratitude to the original author:
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