Top 5 Takeaways from Intel's announcements
- Intel still makes a lot of money, is growing revenue, and is making huge progress in datacenter and in memory/storage products. And the horrible PC market that everyone hates still makes a lot of money (yes, it is shrinking).
- MKW VENTURES TAKE: End result Intel will continue to grow with industry for a long time. Intel is not dead now or in the future
- Intel stated that Datacenter demand will enter a digestion phase in 2nd Half of 2020. Intel actually predicted this earlier and we got the idea in late 2018 that this is the way the industry works. Build to stay ahead... then rest for a while.
- MKW VENTURES TAKE: Intel can manage around this. If we combine this with overbuying that we believe happened due to pandemic, we believe that commodity markets (NAND, DRAM, HDD) will take a demand hit in coming 12 months. In memory all that matters is price which has held up well so far but will drop in 2H 2020
- Intel announced that 7nm will be delayed ... with some rambling about process 12 months and products 6 months.
- MKW VENTURES TAKE(S)
- Intel 10nm was too aggressive to start. then it didnt work... then they tried to fix it.... still didnt work. Finally, they completely redesigned the process to only modules that worked but this caused product delays since all the process files, and design rules changed. Lesson learned.
- But 7nm is even harder than 10nm... and Intel wanted to make up for 10nm delays. So they had to stay aggressive. (See "Roy McAvoy, US Open, 18th hole). Lesson unlearned.
- Intel is not the leader is process technology. The are not the largest or premier manufacturer. They do not get support from equipment vendors like before. They are a follower with a lot of talent. but other companies talent caught up
- We can go through the details of how this happened and why. But it was inevitable (see: IBM 1990s)
- Intel continues growth and financial success despite process issues and designs that are second to AMD. This has been the case for years. Intel is ramping 14nm products and winning. So we already know that Intel financial success doesn't depend on best product or process
- MKW VENTURES TAKE: Intel will succeed going forward. It will cost them 1-2B per year in waste due to product and process issues but they will still be much better off financially than AMD.
- Intel said they will look harder at outsourcing products.
- MKW VENTURES TAKE: Intel is already looking at outsourcing as a backup plan and has been or last 2-3 years. Intel will now look at parallel development and then make a choice. TSMC will win since the technology will be better, more mature, and lower cost. This will happen sooner than you think. The Fab plan is in place, product plan is in place, TSMC plan is in place. just need to pull trigger.
- This is good for Intel (Simplify development) good for TSMC (more Money) and bad for AMD. Some people said Intel won't get the support as TSMC is committed to AMD. Seriously.... they said that LOL.
Mark Webb
www.mkwventures.com
