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The Fall of Intel

F

Fred Chen

Moderator
A couple of interesting, very likely debatable, points from Professor Bill Lazonick in this video:
1. It looks like he feels Intel did too much stock buybacks, much more than R&D investment, due to their importance to compensation.
2. He suggests PG got the boot due to close ties with Biden, in light of Trump's incoming presidency.

 
Last edited by a moderator:
That's an interesting but superficial point. Firing PG for a superficial reason is pretty typical of Intel though. More likely, as he mentions, the massive unprecedented loss in 2024 was the catalyst for the firing. The loss, he implies, could have been much smaller if severance costs had been less (fewer buyouts) and if the change in strategy hadn't stranded so much equipment cost. That makes sense to me. PG went Leroy Jenkins on spending and paid the price. Now Intel is minding costs again which is a positive.
 
benb said:
That's an interesting but superficial point. Firing PG for a superficial reason is pretty typical of Intel though. More likely, as he mentions, the massive unprecedented loss in 2024 was the catalyst for the firing. The loss, he implies, could have been much smaller if severance costs had been less (fewer buyouts) and if the change in strategy hadn't stranded so much equipment cost. That makes sense to me. PG went Leroy Jenkins on spending and paid the price. Now Intel is minding costs again which is a positive.
Click to expand...

BK did not get fired as Intel CEO for an inappropriate relationship, that everyone already knew about. BK was a bad CEO but the Intel BoD refused to accept that they made a mistake hiring him. PG was not fired, right? The Intel BoD said he retired but it was the same as BK, Pat Gelsinger made too many mistakes. If a BoD says either retire or we will fire you that isn't really retiring.

If you look at the recent press with CC Wei and Jensen Huang you will see that they are very good friends. Same with Lisa Su and CC Wei. Pat Gelsinger not so much. Pat is a polarizing figure and that is not a good thing. I do not think politics had anything to do with it. A good CEO plays nice with all, except for Elon Musk of course. Lip-Bu Tan plays nice with all and that includes a lot of very influential people.

My blog on Monday 8/25 talks about Intel's Pearl Harbor Moment. https://semiwiki.com/category/semiconductor-manufacturers/intel/
 
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A couple of new and interesting data points on this topic popped up on my feed this morning.

First, another view on Intel and the “US semiconductor industry” - bottom line is that it takes a village. It’s beyond the capability of just one company or country to make leading edge semiconductors happen.

www.economist.com

America’s fantasy of home-grown chipmaking

To remain the world’s foremost technological power, the country needs its friends
www.economist.com www.economist.com

A now-retiring Gadi Singer was absolutely a technical change-making force for Intel design. But looking at his list of breakthroughs, it’s surprising how much talent was applied to products and technologies that Intel failed to ride to market success. Most were cases of poor market / product fit.

www.linkedin.com

My Four-Decade Adventure as a Change Agent in Blue

After 42 (!) years at Intel, it is time to bid farewell. It was a wonderful journey, especially the exceptional people that shared this adventure with me.
www.linkedin.com www.linkedin.com
 
KevinK said:
First, another view on Intel and the “US semiconductor industry” - bottom line is that it takes a village. It’s beyond the capability of just one company or country to make leading edge semiconductors happen.
Click to expand...
Don't forget Intel did this before before TSMC was so dominant so it's not impossible for Intel to get tech leadership but I don't think Intel will have cost leadership they can achieve through combination of products and IFS margin stacking.
 
IMO

Stock buy backs dont have any effect on the company... it does prevent stock dilution. Intel spend TOO much on capex and R&D. Who comes up with these ideas that Intel doesn't spend on R&D? The stock holders, who own the company, like and approve buybacks and Intel spends more on R&D than other companies.

On paper PG is the worst performing CEO in tech. Right or wrong, he clearly destroyed stockholder value and invested heavily in foundry which was clearly a failure (he made forecasts to the board, they did not come true, they failed according to Pats goals and lost billions)....

LBT is making all the correct decisions and the stockholder value will probably return.
 
Daniel Nenni said:
BK did not get fired as Intel CEO for an inappropriate relationship, that everyone already knew about. BK was a bad CEO but the Intel BoD refused to accept that they made a mistake hiring him. PG was not fired, right? The Intel BoD said he retired but it was the same as BK, Pat Gelsinger made too many mistakes. If a BoD says either retire or we will fire you that isn't really retiring.

If you look at the recent press with CC Wei and Jensen Huang you will see that they are very good friends. Same with Lisa Su and CC Wei. Pat Gelsinger not so much. Pat is a polarizing figure and that is not a good thing. I do not think politics had anything to do with it. A good CEO plays nice with all, except for Elon Musk of course. Lip-Bu Tan plays nice with all and that includes a lot of very influential people.

My blog on Monday 8/25 talks about Intel's Pearl Harbor Moment. https://semiwiki.com/category/semiconductor-manufacturers/intel/
Click to expand...


semiwiki.com

Intel’s Pearl Harbor Moment - Semiwiki

There is a lot of talk about where Intel went wrong, the latest is missing AI, but people seem to forget one of the more defining blunders in the history of Intel. In April of 2012 Kirk Skaugen, the new general manager of Intel’s client PC group, moderated a Q&A with Mark Bohr, a 33+…
semiwiki.com semiwiki.com
 
KevinK said:
A couple of new and interesting data points on this topic popped up on my feed this morning.

First, another view on Intel and the “US semiconductor industry” - bottom line is that it takes a village. It’s beyond the capability of just one company or country to make leading edge semiconductors happen.

www.economist.com

America’s fantasy of home-grown chipmaking

To remain the world’s foremost technological power, the country needs its friends
www.economist.com www.economist.com

A now-retiring Gadi Singer was absolutely a technical change-making force for Intel design. But looking at his list of breakthroughs, it’s surprising how much talent was applied to products and technologies that Intel failed to ride to market success. Most were cases of poor market / product fit.

www.linkedin.com

My Four-Decade Adventure as a Change Agent in Blue

After 42 (!) years at Intel, it is time to bid farewell. It was a wonderful journey, especially the exceptional people that shared this adventure with me.
www.linkedin.com www.linkedin.com
Click to expand...
It's not like America is trying to do cutting-edge semiconductors alone.
It just means "American-led"
 
Pat was always very combative. I think he was the right CEO for Intel even if he messed up with the economic side of things. He still did the right moves.

You got Intel 3 and Intel is competitive on servers again with Granite Rapids. Also none of the big planned fab investments were irrecoverable. They never broke ground on the German site for example. It cost nothing. It was canceled while Pat was still in office. The Ohio site is still just a shell.

The only real new fabs are at Ireland and Arizona. Once Arizona got operational then Intel was supposed to get CHIPS Act money to finish the Ohio site.

Most of the cost to make the fab expansions came from outside capital as well. Costs to Intel proper were minimized.

The biggest mistake was growing the workforce to fire them again a couple years later. But 5 processes in 4 years and those chips don't design themselves.
 
Last edited:
Fred Chen said:
A couple of interesting, very likely debatable, points from Professor Bill Lazonick in this video:
1. It looks like he feels Intel did too much stock buybacks, much more than R&D investment, due to their importance to compensation.
2. He suggests PG got the boot due to close ties with Biden, in light of Trump's incoming presidency.

Click to expand...
An economics academic who never worked in a commercial corporation in his life, never worked on product development, and is not a computing or semiconductor expert. He clearly has no idea what he talking about. As for thinking PG got fired for political alignment reasons, that notion gets my award for the dumbest statement by a self-proclaimed expert I've read this year. Congratulations, Professor!
 
Actually I think the Professor knows quite a lot about the Intel company. Way more than you would expect from a regular economist.

And I agree with most of what he said.
 
samwilde said:
Actually I think the Professor knows quite a lot about the Intel company. Way more than you would expect from a regular economist.

And I agree with most of what he said.
Click to expand...
Right at the start, he explains Moore's Law improperly. What an expert...

All of his "insights" appear to be nothing more than the ill-informed "common knowledge" you get from non-technical industry analysts (why PSO turned down Steve Jobs, etc.) and Reddit forums. He seems deeply uninformed and mostly enamored with his own opinions. There's nothing new here you can't hear from the industry analysts Dan and many of the rest of us here make fun of.
 
KevinK said:
A couple of new and interesting data points on this topic popped up on my feed this morning.

First, another view on Intel and the “US semiconductor industry” - bottom line is that it takes a village. It’s beyond the capability of just one company or country to make leading edge semiconductors happen.

www.economist.com

America’s fantasy of home-grown chipmaking

To remain the world’s foremost technological power, the country needs its friends
www.economist.com www.economist.com

A now-retiring Gadi Singer was absolutely a technical change-making force for Intel design. But looking at his list of breakthroughs, it’s surprising how much talent was applied to products and technologies that Intel failed to ride to market success. Most were cases of poor market / product fit.

www.linkedin.com

My Four-Decade Adventure as a Change Agent in Blue

After 42 (!) years at Intel, it is time to bid farewell. It was a wonderful journey, especially the exceptional people that shared this adventure with me.
www.linkedin.com www.linkedin.com
Click to expand...
I didn't know Singer when I was at Intel, but most of the accomplishments listed on that LinkedIn post are about go-to-market activities. Listing Itanium as an "accomplishment" is odd.
 
blueone said:
I didn't know Singer when I was at Intel, but most of the accomplishments listed on that LinkedIn post are about go-to-market activities. Listing Itanium as an "accomplishment" is odd.
Click to expand...
I crossed paths with him a few times on Itanium, Xscale, Atom. Smart/innovative guy. He was doing smart phone demonstrations internally 5+ years before the Iphone came out.

But His last projects/divisions were all failed mobile products and failed AI products. Intel had great ideas in mobile and AI. They just couldn't get good products out on time (we can discuss exactly why that is and what LBT is changing on this)
 
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