Intel is America’s only domestic chip manufacturer. It’s not going anywhere.
Listen, I absolutely get it. Intel has not had a good second half of 2024.
It has had to lay off over 100,000 people in cost-saving measures in recent months. Its Arrow Lake processors, which I personally reviewed and found rather meh, are rather underwhelming as far as performance goes (at least in the sense that they didn’t offer any real gen-on-gen performance improvement over Intel Raptor Lake Refresh).
On the data-center side, meanwhile, Intel is getting its clock cleaned by Nvidia in terms of producing AI data-center chips, something Intel hasn’t done in a dedicated sense previously, so everyone is buying Nvidia Taiwan-produced TSMC silicon for its latest AI processors that are doing the work that five or 10 Intel Xeon processors used to do.
So people in the financial press, and increasingly in the tech press, are speculating that Intel might be a takeover target for a rival like Apple, Qualcomm, or Samsung, and people are taking these reports seriously.
All I have to say is anyone who takes these reports seriously doesn’t understand the geopolitical conditions of the semiconductor industry, all of which point to Intel remaining an independent company producing chips in the US.Intel’s position in the market
As I said, Intel’s position in the market isn’t great right now, but it’s not catastrophic. It’s still a very successful company that produces great products. Even the most recent Intel Core Ultra processors are only a disappointment in that they aren’t better than previous Intel products, but they are better (in terms of performance) than arch-rival AMD’s Ryzen 9000-series chips.
Ultimately, we are not going to see 15-20% gains gen-on-gen with general-use processors anymore. Moore’s Law is a thing, and TSMC’s 3nm chips have about as small a transistor are you’re going to be able to produce in silicon.
Any smaller and the actual stream of electrons that make a processor function is going to physically warp the dozens of atoms that make up a given transistor in the first place, leading to errors, voltage leaks, and other issues that will put the effective lifespan of sub-3nm processors in terms of months rather than years.
Intel, meanwhile, isn’t even at 3nm and it’s still producing the best processors on the planet, so Intel’s foundries have much more room to improve than TSMC’s do. As such, Intel’s rivals, who use TSMC for actually fabricating their chips, will eventually have nowhere else to turn to for improved performance other than Intel. Intel might be on the ropes now, but it has the stamina to bounce back, so to speak, in a way that TSMC simply cannot.
