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Intel's biggest mistake, Gelsinger is WRONG

A

Arthur Hanson

Well-known member
Intel's and Andy Grove's biggest mistake was not having the right successor and executive team to continue his mantra "Only the paranoid survive." Having the right culture is everything and with the technical world advancing at an ever-accelerating rate, there is less and less time and room for error. Dealing with an ever-increasing acceleration requires a certain paranoia to survive. You not only have to focus on constant acceleration internally, but also keep your eyes and mind open to the unexpected coming out of left field. On this, Gelsinger is needs to make strategic changes to the process of dealing with ever increasing acceleration and not look backwards at mistakes already made. Dealing with mistakes by studying the past, takes your eyes off the future. Any thoughts, comments and additions on this sought, for as an investor in tech, looking at technology through different points of view has been critical and while successful, I have made many mistakes. Looking at the bigger picture is key and focusing on separate single issues can be dangerous business and investment wise. Thanks
 
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Arthur Hanson said:
Intel's and Andy Grove's biggest mistake was not having the right successor and executive team to continue his mantra "Only the paranoid survive." Having the right culture is everything and with the technical world advancing at an ever-accelerating rate, there is less and less time and room for error. Dealing with an ever-increasing acceleration requires a certain paranoia to survive. You not only have to focus on constant acceleration internally, but also keep your eyes and mind open to the unexpected coming out of left field. On this, Gelsinger is needs to make strategic changes to the process of dealing with ever increasing acceleration and not look backwards at mistakes already made. Dealing with mistakes by studying the past, takes your eyes off the future. Any thoughts, comments and additions on this sought, for as an investor in tech, looking at technology through different points of view has been critical and while successful, I have made many mistakes. Looking at the bigger picture is key and focusing on separate single issues can be dangerous business and investment wise. Thanks
Click to expand...

Pat Gelsinger's rationale to point out the past mistakes may probably include:

1. The situation is bad, let's face it.

2. If the situation doesn't improve faster enough, don't blame on me. I inherited all these problems.

Unfortunately, most those people who led Intel into today's problems had retired happily or moved on to other places.
 
Arthur Hanson said:
Intel's and Andy Grove's biggest mistake was not having the right successor and executive team to continue his mantra "Only the paranoid survive."
Click to expand...
Paranoia is not good. They distrusted customers and even failed to communicate internally. Grove may not have intended that, but it is the culture he initiated. You do not need to be paranoid in order to be the best. It is such an inward looking, oblivious pattern.

The TSMC culture "learn from your customers and earn their trust" (my summary of their behavior) has proven far more constructive.

The paranoid are lucky if they survive, his title was catchy but wrong.
 
Tanj said:
Paranoia is not good. They distrusted customers and even failed to communicate internally. Grove may not have intended that, but it is the culture he initiated. You do not need to be paranoid in order to be the best. It is such an inward looking, oblivious pattern.
Click to expand...
Maybe the right kind of paranoia:
* Who's catching up with us and how are they doing it ?
* We've got to obsolete ourselves before other companies do.

was replaced with the wrong kind of paranoia ?
* How do we keep these margins and keep everyone else out of "our" market ?
* Everybody is trying to steal our IP, even our customers so don't let anybody know anything about our products, process, etc.

When you are a near-monopoly, everyone is "out to get you", but you can't let it turn into non-productive and dehabilitating "protect at all costs" rather than "grow new markets" strategy.
 
milesgehm said:
Paranoia is a mental illness. Not a basis for a healthy culture. Words have meaning.
Click to expand...
In this age of rampant IP and business process theft, caution or paranoia and keeping defenses up and being prepared to go on a legal/court offense is key. The faster a system of any type advances, the more key adequate defenses are required as it is also required to launch legal attacks to protect your property physical and intellectual. To be defenseless is to be a fool, it is important to live and function in the environment you are in, whatever that may be.
 
Arthur Hanson said:
In this age of rampant IP and business process theft, caution or paranoia and keeping defenses up and being prepared to go on a legal/court offense is key. The faster a system of any type advances, the more key adequate defenses are required as it is also required to launch legal attacks to protect your property physical and intellectual. To be defenseless is to be a fool, it is important to live and function in the environment you are in, whatever that may be.
Click to expand...
Yeah, but Intel got so zealous about protecting all their proprietary internals that they essentially cut themselves off from the rest of the fast evolving semiconductor ecosystem, and put on blinders. They eventually couldn’t separate “Differentiated and better” from “different, just to be different”. That paranoia turned into a form of arrogance.

This was all complemented by Intel becoming somewhat arrogant. We were like, “Hey, just drop the equipment off at the front lobby, and we will take care of running it.” The industry had moved rapidly, and we needed to learn from those capabilities and bring those experiences. We are now leaning into those relationships at scale to garner their best learnings into our development. For instance, I regularly meet with the CEO and the CTO of ASML (also known as ASML Holding), the EUV (extreme ultraviolet lithography) equipment provider. We have committed in a big way to EUV. That was a fundamental mistake that Intel made.

www.theverge.com

Pat Gelsinger came back to turn Intel around — here’s how it’s going

The Intel CEO is betting big on a new manufacturing site in Ohio.
www.theverge.com www.theverge.com
 
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KevinK said:
Yeah, but Intel got so zealous about protecting all their proprietary internals that they essentially cut themselves off from the rest of the fast evolving semiconductor ecosystem, and essentially put on blinders. They eventually couldn’t separate “Differentiated and better” from “different, just to be different”. That paranoia turned into a form of arrogance.

This was all complemented by Intel becoming somewhat arrogant. We were like, “Hey, just drop the equipment off at the front lobby, and we will take care of running it.” The industry had moved rapidly, and we needed to learn from those capabilities and bring those experiences. We are now leaning into those relationships at scale to garner their best learnings into our development. For instance, I regularly meet with the CEO and the CTO of ASML (also known as ASML Holding), the EUV (extreme ultraviolet lithography) equipment provider. We have committed in a big way to EUV. That was a fundamental mistake that Intel made.

www.theverge.com

Pat Gelsinger came back to turn Intel around — here’s how it’s going

The Intel CEO is betting big on a new manufacturing site in Ohio.
www.theverge.com www.theverge.com
Click to expand...
I agree with you, but the one part of paranoia, is looking around and not inward. You constantly have to see where the market is going and what technologies, competitors and economic conditions demand. Like when a country gets an unqualified leader, one must adjust as we have seen financial conditions change radically as in interest rates doubling in a very short period of time.
 
He was not paranoid. I think he judged that poorly.

Also, he was lucky to be riding that rocket at that time. The sources of success in that era used many outside inspirations. Like the new micro-op superscalar architecture that allowed them to respond to RISC, where key players brought the ideas into the company where the paranoid walls were not yet fully erected.
 
hist78 said:
Ok. Can we find a better word to replace the "paranoid"?
Click to expand...
The concept of strategic paranoia is part of corporate culture because of Grove's 1999 book. Words have more implied meaning, in the US at least, now than they did in 1999. I would also like to add that there's a technical difference between using paranoia as a description of a temporary or conditional state of mind and the using it as the name of a mental health condition. The mental health condition is properly called Paranoid Personality Disorder. Paranoia as a term in US English does not typically describe mental illness.
 
Tanj said:
Like the new micro-op superscalar architecture that allowed them to respond to RISC, where key players brought the ideas into the company where the paranoid walls were not yet fully erected.
Click to expand...
A tidbit only computer architects above a certain age seem to remember... the first commercial superscalar processor was IBM's RS/6000 in 1990. Off topic for sure, but I miss the IBM of decades ago. I still remember as a college student being fascinated by the System 38's architecture. All right, I'll stick to the topic of the thread. 🤫
 
Arthur Hanson said:
If that is so, why was Andy Grove such a success?
Click to expand...
Man was a genus. Before even knowing he was the CEO of intel, I originally learned about him from the Deal-Grove oxidation model and other such discoveries/inventions he made.


I think you are failing to remember the other 2/3 of the quote.

"Success breeds complacency. Complacency breeds failure. Only the paranoid survive."

The point is NOT to assume that any of your coworkers are spies for Toshiba, NEC, Hitachi, etc. Or that all of your customers plan to leak your data to said competitors. The point IS that successful companies DO NOT rest on their laurels or accept the status quo. Before the Japanese came into the DRAM business intel was the king of the world on process tech. Operationally intel (and every other American semi firm at the time ran their fabs inefficiently). Once the Japanese came in with excellent manufacturing capability the American firms got their butts handed to them until they shaped up and developed the techniques needed to have world class manufacturing. In the interview with Pat in question, he claims the same deal happened with IA. The 3+ year process lead covered faults with their arch and given AMD's weakness they didn't bother pushing the limits.

If this Grove quote was followed intel would have kept innovating in the late 2000s/ early 2010s as if their lives depended on it. They also would have looked for the next strategic inflection point and see what/when intel needed to go all-in on to avoid stagnation and or decay.

In my opinion Intel and Nvidia are the perfect tale of two cities of this quote in action. Intel had a dominate lead on PC CPUs and mostly just sat on it. Outside of expanding to server CPUs they didn't ever fully commit to doing anything beyond continuing on their CPU business. In that same timeframe NVIDIA took their gaming GPU leadership, turned that into a big GPGPU market, and once you had the LLM AI training boom NVIDIA capitalized on this to their full extent to the point that gaming GPUs are practically a side business. Even on bets that were kind of flops like crypto NVDIA still came out on top and made a good chunk of change before the floor fell out from under them. To me Jensen is the Grove of this century and for chip designers.
 
blueone said:
A tidbit only computer architects above a certain age seem to remember... the first commercial superscalar processor was IBM's RS/6000 in 1990. Off topic for sure, but I miss the IBM of decades ago. I still remember as a college student being fascinated by the System 38's architecture. All right, I'll stick to the topic of the thread. 🤫
Click to expand...
Actually, IBM was renaming registers on the last high-perf 370s, and Seymour Cray invented scoreboarding while still at CDC. Both imply some level of superscalar. But it really came into its own as VLSI had the transistor budget and clock rates started to leave DRAM far too slow.
 
blueone said:
A tidbit only computer architects above a certain age seem to remember... the first commercial superscalar processor was IBM's RS/6000 in 1990. Off topic for sure, but I miss the IBM of decades ago. I still remember as a college student being fascinated by the System 38's architecture. All right, I'll stick to the topic of the thread. 🤫
Click to expand...

That is the "Innovator's Dilemma". IBM really struggled with this ... as I believe Intel did also.

I worked at IBM for many years. I was one of the first people to use RS6000 around 1989/1990 for IBM chip hardware analysis. I got a bunch of crap about using the UNIX RS6000 instead of mainframe analysis capability -- because we were designing/supporting chips that went into mainframes. The Executive told me that I was undermining the product that was paying our salary. I told him that I was not going to do a long-term market analysis of the options every time I wanted to do some engineering analysis. (sure he wasn't happy about that comment)

I understand the dilemma that IBM (and Intel with CPU) had because they were making so much profit from the existing products.
 
ChrisGar said:
That is the "Innovator's Dilemma". IBM really struggled with this ... as I believe Intel did also.
Click to expand...
IMO, Intel most certainly does suffer from this syndrome, and has for decades. This is one of the reasons I was dismayed by Gelsinger's appointment as CEO. He is the high priest of x86 CPUs being the center of the universe. I do like the IFS initiative though, so I think he's a mixed bag strategy-wise.
 
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