If AMD is the ultimate case study, kiss goodbye to Intel’s fabs.
When Intel announced the return of Pat Gelsinger as CEO back in 2021, it was to pretty universal acclaim. But now he’s gone and it feels like all hope is in tatters. So, what does it all mean for Intel? If Intel’s arch rival AMD is any guide, you can kiss goodbye to Intel’s fabs.
Hold that thought. Gelsinger’s return in 2021 seemed like a hugely positive development and that arguably came down to two things. First, he was an engineer and not a money man. Second he was a great communicator.
For what felt like the better part of a decade, Gelsinger’s keynote was the unambiguous highlight at the annual Intel Developer Forum techfest in San Francisco. He was passionate, engaging, convincing. To hear Gelsinger speak was to believe the future of tech was bright and that Intel would be driving it.
But now Gelsinger is toast and it’s not hard to understand why. As things stand right now, Intel has very little that’s truly tangible to show for the Gelsinger era, at least from an outside perspective.
The company’s financials have been getting worse and worse, with its most recent results returning the largest loss in Intel’s history. Meanwhile, it’s losing market share to AMD in its core CPU segments and it doesn’t even seem to be able to get the basics right after a huge debacle involving crashing and instability problems with its bread and butter desktop CPU products and delays launching key server chips.
The final ignominy in all this was Intel being replaced by Nvidia in the totemic Dow Jones Industrial stock index. Yes, there has been the odd ray of light. The new Lunar Lake laptop chip is pretty good, for instance. But it apparently doesn’t make Intel much money thanks to being mostly made by TSMC and using on-package RAM. So Gelsinger has said Intel wouldn’t do it that way again.
At the heart of all this is are Intel’s problematic fabs, the industrial units where chips are actually manufactured. The harsh reality is that those fabs have, to a greater or lesser extent, been dysfunctional for a better part of a decade.
More importantly, there’s limited hard evidence that the problem has been fixed. Gelsinger’s plan involved what he claimed would be five new silicon production nodes in four years.
However, the reality was that the plan only involved two truly new nodes, of which only one has entered limited production in chips you can actually buy and Intel increasingly relies on TSMC to manufacture its products which says all you need to know about what Intel thinks about its own fabs.
