# Intel contemplates outsourcing advanced production, upending Oregon’s central role

#### nsaspook

Joined Aug 27, 2009
8,648
https://www.oregonlive.com/silicon-...production-upending-oregons-central-role.html

The model led Intel to become Oregon’s largest corporate employer and one of the state’s major economic engines, convening researchers from all over the world to engineer new chips as the company spent billions of dollars on equipment to manufacture their microscopic marvels.

Now, Intel is laying the groundwork to toss the old model out the window. It is openly flirting with the notion of moving leading-edge production from Oregon to Asia and hiring one of its top rivals to make Intel’s most advanced chips.

The company says a decision is likely in January.

It’s a momentous choice that follows a string of manufacturing setbacks at the Ronler Acres campus near Hillsboro Stadium, failures that have cost Intel its cherished leadership in semiconductor technology – perhaps forever.

#### Hymie

Joined Mar 30, 2018
991
To me this seems like a bad idea.

Some years ago I worked with a UK company designing and manufacturing ventilators for the medical market. Although not majorly high tech, the boss of the company knew he could move production to Asia and increase his profits. But he also knew that if he did, he would almost certainly find copycats of his products on the market, available cheaper because they did not have to bear the development costs (and would possibly be devoid of any legally required medical approvals).

#### WBahn

Joined Mar 31, 2012
26,398
To me this seems like a bad idea.

Some years ago I worked with a UK company designing and manufacturing ventilators for the medical market. Although not majorly high tech, the boss of the company knew he could move production to Asia and increase his profits. But he also knew that if he did, he would almost certainly find copycats of his products on the market, available cheaper because they did not have to bear the development costs (and would possibly be devoid of any legally required medical approvals).
I don't think that's too much of a concern here. It appears that the outsourcing would go to TSMC, which is a top-tier and highly professional and ethical semiconductor fab. Given the kind of customers that they do the bulk of their business with, any games like you are talking about would pretty much kill the company.

#### prairiemystic

Joined Jun 5, 2018
189
Intel has no choice right now but to outsource fab. 7nm tech is way late and before that, their 10nm tech was 4 years late. But TSMC is under threat from china and who knows how that will play out, aside from the IP getting ripped off.

The previous Chief Engineering Officer was an outside hire (from Qualcomm). He failed to bring the mobile market to Intel, or address competition from ARM, or really deliver anything. He got canned last August. But years too late.

Intel seems to be stuck with King of the Hill mentality - but their monopoly over processors has been slowly eroding and Moore's Law is fading.
I would say they are on a death spiral and it's way late for them to get it together. I still can't stop laughing about the Atom processors, dozens of expensive, mediocre variants. Broadcom (ARM) had them beat years ago.
I think they need to simplify their offerings and lower their markup, stop wasting R&D in markets they don't understand well. Imagine the engineering resources in rolling out a dozen new processors every couple years, and then they don't sell so great.

#### schmitt trigger

Joined Jul 12, 2010
463
I also think that it is a bad idea.
Once that a company outsources its technical leadership, it is a downward spiral, and there is no regaining it back.

#### nsaspook

Joined Aug 27, 2009
8,648
https://www.bloomberg.com/news/arti...smc-samsung-to-outsource-some-chip-production
Intel Corp. has talked with Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. about the Asian companies making some of its best chips, but the Silicon Valley pioneer is still holding out hope for last-minute improvements in its own production capabilities.

After successive delays in its chip fabrication processes, Santa Clara, California-based Intel has yet to make a final decision less than two weeks ahead of a scheduled announcement of its plans, according to people familiar with the deliberations. Any components that Intel might source from Taiwan wouldn’t come to market until 2023 at the earliest and would be based on established manufacturing processes already in use by other TSMC customers, said the people, asking not to be identified because the plans are private.

#### prairiemystic

Joined Jun 5, 2018
189
When you headhunt a CEO with (VMware) software background, put him into a hardware company - I predict a total trainwreck. Hardware is not software, software is not hardware and learning the difference is very painful. Most managers can't do it.

Intel has made so many huge mistakes for many years- fumbling mobile, the Atom processor, 7nm process failure, ignoring ARM etc. it's way too late to correct course?
Just feel bad for another American industry dying out due to incompetent leadership.

#### nsaspook

Joined Aug 27, 2009
8,648
https://www.eenewseurope.com/news/intel-TSMC-5nm
Market analyst Trendforce reports that foundry TSMC is to start making Intel's Core i3 process later in the year on a 5nm process. This follows Intel's well documented problems with its leading edge process technology at 10nm and 7nm.

The Core i3 move to a 5nm process is set to be followed by mid-range and high-end CPUs being produced for Intel by TSMC on a 3nm process in 2H22. TrendForce did not give a source for the information, simply referencing "investigations."

Yes, they dropped it but Intel will be around for a good long while IMO.

#### dl324

Joined Mar 30, 2015
13,082
When you headhunt a CEO with (VMware) software background, put him into a hardware company - I predict a total trainwreck.
You should do a little research before dissing Gelsinger. He started working at Intel when he was 18, worked on the 486, and had 30 years with the company before leaving because PSO anointed Sean Malloney as the next CEO.

The train wreck happened when BK was picked for CEO. He was a fab guy with no vision. The only worst decision would be to make Swan CEO - a bean counter who couldn't even count beans.

#### wayneh

Joined Sep 9, 2010
17,153
Yes, they dropped it but Intel will be around for a good long while IMO.
Only by inertia. I wouldn’t personally invest one dollar in Intel. I mean, the odds of doubling your money seem quite remote.

I certainly don’t know much about them but I don’t see anything they have that cannot be, or hasn’t already been, done better by others. What right do they have to stay in the market?

They had a great ride but markets evolve. It’s often the market leader that suffers change the most and that seems to apply to Intel. It’d be great if they can find their way but reality is a bitch.

https://www.wsj.com/articles/intels-new-chief-has-no-quick-fix-11610562666

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#### nsaspook

Joined Aug 27, 2009
8,648
Only by inertia. I wouldn’t personally invest one dollar in Intel. I mean, the odds of doubling your money seem quite remote.

I certainly don’t know much about them but I don’t see anything they have that cannot be, or hasn’t already been, done better by others. What right do they have to stay in the market?

They had a great ride but markets evolve. It’s often the market leader that suffers change the most and that seems to apply to Intel. It’d be great if they can find their way but reality is a bitch.

https://www.wsj.com/articles/intels-new-chief-has-no-quick-fix-11610562666
Yea, but Newton's first law part two, inertia moves galaxies.

I remember when people said AMD was toast, it's time for Intel to

#### nsaspook

Joined Aug 27, 2009
8,648
https://www.taipeitimes.com/News/biz/archives/2021/01/23/2003751049
Samsung Electronics Co is considering spending more than US$10 billion building its most advanced logic chipmaking plant in the US, a major investment that it hopes would win more US clients and help it catch up with industry leader Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). The world’s largest memory chip and smartphone maker is in discussions to locate a facility in Austin, Texas, capable of fabricating chips as advanced as 3 nanometers, people familiar with the matter said. Plans are preliminary and subject to change, but for now the aim is to start construction this year, install major equipment from next year, then begin operations as early as 2023, they said. Intel Corp’s troubles ramping up on technology and its potential reliance on TSMC and Samsung for chipmaking only underscored the extent to which Asian giants have forged ahead in the past few years. The envisioned plant would be its first to use extreme ultraviolet (EUV) lithography, the standard for next-generation silicon, in the US, the people said, asking not to be identified talking about internal deliberations. If Samsung goes ahead, it would effectively go head-to-head on US soil with TSMC, which is on track to build its own US$12 billion chip plant in Arizona by 2024.

#### prairiemystic

Joined Jun 5, 2018
189
You should do a little research before dissing Gelsinger. He started working at Intel when he was 18, worked on the 486, and had 30 years with the company before leaving because PSO anointed Sean Malloney as the next CEO.

The train wreck happened when BK was picked for CEO. He was a fab guy with no vision. The only worst decision would be to make Swan CEO - a bean counter who couldn't even count beans.
I didn't know he had hardware background with Intel, especially with the jump to software at VMware.
I've never known an exec that can manage both, as like I say hardware and software are two totally different birds.

If Intel could not go into damage control mode and slash/cut/outsource, just stay the course even just keeping manufacturing up, look at the present wafer shortage, they could add American stability. I'd say their product lines are a sloppy mess and not competitive. FOCUS.

#### dl324

Joined Mar 30, 2015
13,082
I didn't know he had hardware background with Intel, especially with the jump to software at VMware.
I've never known an exec that can manage both, as like I say hardware and software are two totally different birds.
A simple search would have given you his background.

Intel's first 4 CEO's (Noyce, Moore, Grove, and Barrett) had engineering backgrounds. Otellini was an exceptional case and was successful without an engineering background. At least BK had a technical degree and was a long time Intel employee. What he lacked was vision and management competence. Swan was a bean counter who didn't come up through the ranks, so he didn't know the culture, and he didn't even want the job. That was a huge mistake and the fault lies mainly with chairman of the board (Bryant).

If Intel could not go into damage control mode and slash/cut/outsource, just stay the course even just keeping manufacturing up, look at the present wafer shortage, they could add American stability. I'd say their product lines are a sloppy mess and not competitive. FOCUS.
This is on BK, Swan, and Bryant. BK was a fab guy. The fact that he couldn't keep process development on track makes it abundantly clear that he was the wrong choice. They could have gone with Kirk Skaugen or Diane Bryant (they approached Gelsinger and he turned them down). Swan didn't have an engineering background, had no credibility with manufacturing or engineering, and couldn't even count beans.

Gelsinger was credited with being the architect for the 486, but I don't think that's accurate. One person can't develop a computer architecture and John Crawford was still around.

Gelsinger has credibility with engineering and I think he understands the national security implications of having a microprocessor development company that isn't 100% dependent on foreign manufacturing capabilities and capacity.

#### prairiemystic

Joined Jun 5, 2018
189
No mention of Venkata “Murthy” Renduchintala? "... the chipmaker’s chief engineering officer and group president of its technology, systems architecture and client group" resigned in August.
"He was among Intel’s highest-paid executives, with \$26,885,400 in total compensation for the year that ended on December 28, 2019".
He sure didn't bring any mobile over from Qualcomm as promised.

#### dl324

Joined Mar 30, 2015
13,082
No mention of Venkata “Murthy” Renduchintala?
If they had made him CEO, there would have been a mass exodus of long time employees. He was not well liked, was arrogant, was an outsider, and didn't understand Intel culture or business.

He was another of BK's big mistakes. A lot of Intel talent left under BK's watch. Including a lot of forced retirements and layoffs.

#### Hymie

Joined Mar 30, 2018
991
It looks like Intel are in agreement that too many chips are made in Asia – I wonder which chip manufacturers could be to blame for outsourcing their operations to the Far-East?
https://www.bbc.co.uk/news/technology-56512430

#### wayneh

Joined Sep 9, 2010
17,153
It looks like Intel are in agreement that too many chips are made in Asia – I wonder which chip manufacturers could be to blame for outsourcing their operations to the Far-East?
https://www.bbc.co.uk/news/technology-56512430
Intel may be able to convince somebody that they need to stay in the manufacturing business for strategic national interests, but that argument hasn't helped a lot of industries before them. It's pretty much the last gasp of an uncompetitive player, to appeal to forces outside the market. If you're competitive, you don't need such things.