The end of an era at Intel

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Intel CEO Bob Swan admitted the unthinkable this week, saying his company could outsource chip production to stay competitive with smaller, more innovative rivals.

The admission came on Intel’s conference call after the results. Intel, which had just delayed the introduction of 10-nanometer (nm) chipsets for five years, admitted earlier today that its next-gen 7nm designs were also behind schedule and would suffer at least another year of delays. Meanwhile, Intel’s competitors are already coming up with more efficient designs. AMD has switched to 7nm chips this year, and Qualcomm has switched to even smaller 5nm designs.

“We have invested in contingency plans to protect ourselves against further uncertainties in the timing,” Swan said in response to a question about Intel’s inability to ship 7nm chips on time and whether the company would consider outsourcing. “As long as we have to use someone else’s process technology and we call these contingency plans, we’ll be prepared to do it. And if we do, there are a lot of moving parts.

Even the admission that Intel is willing to outsource chip production is a blow to the reputation of a company that has ostensibly led this market for over 30 years. Like Microsoft in software, Intel was the hardware that drove the PC revolution, and its chips are still popular in PCs and data centers today. But these markets are moving inexorably towards more energy efficient designs like those of ARM and its licensees. And that could leave Intel out in the cold.

Quoted in Bloomberg, analyst Chris Caso described the admission as “an astonishing failure [that] may well represent the end of Intel’s computer dominance. ”

“With the latest advancements in process technology, we believe Intel has no chance of catching up with or surpassing TSMC for at least the next half a decade, if ever,” added analyst Chris Rolland, adding reference to a Taiwanese manufacturing plant. . TSMC already produces over a billion chipsets each year, far more than Intel.

Tagged with Intel

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