Incoming Intel CEO demands better chips than 'lifestyle company in Cupertino'

AppleInsider · January 15, 2021 1:35PM

Intel's new CEO Pat Gelsinger is making some big promises as he prepares to start work at the company, targeting Apple directly from the start.

Upcoming Intel CEO says company must beat Apple

Intel has seen years of problems with its chip manufacturing business -- essentially recycling the same processor with improved clock speeds or different heat management options. The previously dominant processor giant is slipping behind competitors rapidly, and the new CEO hopes the company can change course soon.

"We have to deliver better products to the PC ecosystem than any possible thing that a lifestyle company in Cupertino" makes, Gelsinger told employees. "We have to be that good, in the future."

This statement is a strong one coming from the oncoming CEO. The promise of beating Apple at designing powerful processors is a tall order given how well the M1 processor has performed. Apple has only just begun its transition from Intel to Apple Silicon and further refinements will only boost speed and power efficiency.

The Oregon-based company has to make a decision soon if it will continue chip manufacturing in the hopes to finally overcome the 7nm process, or to sell off its chip foundries and outsource its chip manufacturing to other companies. Oregon Live says the company will announce a decision by the time fourth-quarter earnings are released.

Giving up on chip fabrication would have enormous consequences for the company and its employees. Intel employs 21,000 Oregonians and spends billions of dollars every year on its factories. Intel's pipeline is already set until 2022, so it must decide if it will begin manufacturing in China in 2023 soon.

Pat Gelsinger has been appointed the new Intel CEO after Bob Swan stepped down. Intel has recently previewed a new processor dubbed "Alder Lake" using the aging 10nm process.

anantksundaram · January 15, 2021 1:45PM

Without 'lifestyle companies' this guy (and his new employer) won't have a damn business to run.

Such condescending pap.

[deleted user] · January 15, 2021 1:47PM

“ The previously dominant processor giant is slipping into obscurity fast, and the new CEO hopes the company can change course soon.”

That is some grade A hyperbole. Intel certainly has some issues and is facing challengers in a way that it hasn’t in some time. That said they are still the dominant player in the processor world and are nowhere near obscurity. Their closest rival, AMD, doesn’t do anywhere close the volume that intel does.

What Apple is doing is largely irrelevant to Intel since Apple doesn’t sell their chips to the broader market. So even though Apple Silicone can out perform Intel it is only relevant to the Apple ecosystem which is just a tiny fraction of the broader chip market.

verne arase · January 15, 2021 1:50PM

Well, Thank God that silicon design has been reduced to executive declaration - all Intel has needed all along was Captain Picard at the helm ordering, "Make it so."

What hubris.

Too bad mutual funds don't allow country or company exclusions - I'd really like to insure Intel or China-based companies aren't included in my portfolio.

While I can see his point - that a processor manufacturer whose business model focuses exclusively on making processors should produce better processors than a lifestyle company in Cupertino - achieving that goal may be a tad harder than he realizes.

edited January 2021

rotateleftbyte · January 15, 2021 1:56PM

lifestyle company in Cupertino

I guess that even saying the word 'Apple' sticks in his throat so much that he has to resort to words like this. Shame really. Intel has needed a kick in the you know what's for years and the M1 is just the latest in a pretty long line of warning shots that have finally struck the bullseye. AMD is better positioned to make a very powerful X86/64 SOC than Intel largely because of their GPU work. That must really gall.

fordee · January 15, 2021 2:22PM

Happy_Noodle_Boy said:

“ The previously dominant processor giant is slipping into obscurity fast, and the new CEO hopes the company can change course soon.”

That is some grade A hyperbole. Intel certainly has some issues and is facing challengers in a way that it hasn’t in some time. That said they are still the dominant player in the processor world and are nowhere near obscurity. Their closest rival, AMD, doesn’t do anywhere close the volume that intel does.

What Apple is doing is largely irrelevant to Intel since Apple doesn’t sell their chips to the broader market. So even though Apple Silicone can out perform Intel it is only relevant to the Apple ecosystem which is just a tiny fraction of the broader chip market.

While other chip manufacturers have been able to steadily lower the feature size from 10nm to 7nm to 5nm, Intel have been postponing the move to 7nm for years. Their processors have been power hungry behemoths, with little increases in performance or power efficiency.

If Windows makes a serious effort to move to ARM and have similar results as Apple, then the x86 ISA is dead and Intel aren’t relevant anymore.

Intel are in big trouble.

rayz2016 · January 15, 2021 2:28PM

Happy_Noodle_Boy said:

“ The previously dominant processor giant is slipping into obscurity fast, and the new CEO hopes the company can change course soon.”

That is some grade A hyperbole. Intel certainly has some issues and is facing challengers in a way that it hasn’t in some time. That said they are still the dominant player in the processor world and are nowhere near obscurity. Their closest rival, AMD, doesn’t do anywhere close the volume that intel does.

What Apple is doing is largely irrelevant to Intel since Apple doesn’t sell their chips to the broader market. So even though Apple Silicone can out perform Intel it is only relevant to the Apple ecosystem which is just a tiny fraction of the broader chip market.

I agree that “slipping into obscurity fast” is overcooking it by quite some way, but that opening statement doesn’t bode well for the future.

mike1 · January 15, 2021 2:40PM

"We have to deliver better products to the PC ecosystem than any possible thing that a lifestyle company in Cupertino" makes, Gelsinger told employees. "We have to be that good, in the future."

This is not a promise. It is a call to action delivered to motivate his employees.

larryjw · January 15, 2021 2:46PM

mike1 said:

"We have to deliver better products to the PC ecosystem than any possible thing that a lifestyle company in Cupertino" makes, Gelsinger told employees. "We have to be that good, in the future."

This is not a promise. It is a call to action delivered to motivate his employees.

It's a promise. But adding that they're looking to manufacture chips in the China or sell off their manufacturing capability is not going to motivate too many Oregonians.

Since Apple fronts TMSC to support their manufacturing, wouldn't it be ironic that Apple might be able to buy up Intel manufacturing to have an alternative source for its chips?

crowley · January 15, 2021 2:50PM

anantksundaram said:

Without 'lifestyle companies' this guy (and his new employer) won't have a damn business to run.

Such condescending pap.

It’s an internal memo. He’s not trying to condescend to anyone, he’s trying to motivate the company to do better.

iadlib · January 15, 2021 3:26PM

Well that lifestyle company in Cupertino has a 2.3 trillion with a T market cap and intel has a 218 billion market cap. So maybe get your head out of your ass with your stereotypical thought process and behavior and learn a thing or two from the lifestyle company who has perfected thin, light, powerful and most importantly, desirable. Or die in your bunny suit. Your choice.

qwerty52 · January 15, 2021 3:29PM

With avoiding to pronounce Apple’s name, the new Intel’s CEO is just admitting that Apple, which core business is not

designing of processors, is much beter in doing that, than Intel, where designing of processors is their core business.

[deleted user] · January 15, 2021 3:34PM

fordee said:

Happy_Noodle_Boy said:

“ The previously dominant processor giant is slipping into obscurity fast, and the new CEO hopes the company can change course soon.”

That is some grade A hyperbole. Intel certainly has some issues and is facing challengers in a way that it hasn’t in some time. That said they are still the dominant player in the processor world and are nowhere near obscurity. Their closest rival, AMD, doesn’t do anywhere close the volume that intel does.

What Apple is doing is largely irrelevant to Intel since Apple doesn’t sell their chips to the broader market. So even though Apple Silicone can out perform Intel it is only relevant to the Apple ecosystem which is just a tiny fraction of the broader chip market.

While other chip manufacturers have been able to steadily lower the feature size from 10nm to 7nm to 5nm, Intel have been postponing the move to 7nm for years. Their processors have been power hungry behemoths, with little increases in performance or power efficiency.

If Windows makes a serious effort to move to ARM and have similar results as Apple, then the x86 ISA is dead and Intel aren’t relevant anymore.

Intel are in big trouble.

I understand that other designers and manufactures have moved ahead on a technical front but that has resulted in Intel slipping into obscurity. For example, in Q3 of 2020 AMD made 2 billion, of that 1.6 billion was from computer processors and graphics chips. In comparison Intel 9.8 billion with 5.9 billion coming from personal computing. At the end of the day unit sales are what matters and Intel completely dwarfs its competition, hell their non personal computing revenue is is bigger than all of AMD.

Again, Intel has issues to overcome but the are hardly in bad shape and any argument that starts with speculation on what Microsoft may do is conjecture at best. We can all come up with "what if" but the data as it stands showed Intel is currently still in a dominate position.

[deleted user] · January 15, 2021 3:36PM

crowley said:

anantksundaram said:

Without 'lifestyle companies' this guy (and his new employer) won't have a damn business to run.

Such condescending pap.

It’s an internal memo. He’s not trying to condescend to anyone, he’s trying to motivate the company to do better.

This! He is clearly acknowledging Apple has done a better job so he isn't bashing Apple, he being critical of his own company for not being able to keep up with a company that's core competency isn't making processors.

macpro · January 15, 2021 3:38PM

For those that remember

. Link for those that don't. https://www.businessinsider.com/microsoft-iphone-funeral-2010-9

Image: https://forums.appleinsider.com/uploads/editor/ix/2gvdwjuvb6fb.jpg

edited January 2021

elijahg · January 15, 2021 3:46PM

Yeah good luck with that, Intel. x86 is a dead end, the only way for them to make real progress is to convince the rest of the industry to change architectures. And then if they do, why should they go with Intel's arch rather than proven ARM?

dysamoria · January 15, 2021 4:15PM

verne arase said:

Well, Thank God that silicon design has been reduced to executive declaration - all Intel has needed all along was Captain Picard at the helm ordering, "Make it so."

What hubris.

Too bad mutual funds don't allow country or company exclusions - I'd really like to insure Intel or China-based companies aren't included in my portfolio.

Agreed on the hubris.

As for the stocks, you could simply stop playing the game.

basjhj · January 15, 2021 4:15PM

They would have been in a different league if they had embraced the EUV platform of ASML earlier. While Intel was one of the first companies to invest in the development efforts by ASML, they somehow decided to wait and wait and wait, while TMSC en Samsung started much earlier using the platform. With Apple being one of the largest beneficiaries.

edited January 2021

tshapi · January 15, 2021 4:47PM

Have you considered Apple silicon is a big blow to intel, that Apple is a HUGE account for intel? Intel used to be on the cutting edge or Moore’s law, now they have been behind the eight ball treading water for several years, it’s hard to dominate a market when another company TSMC is out performing them in terms of innovation.

Happy_Noodle_Boy said:

“ The previously dominant processor giant is slipping into obscurity fast, and the new CEO hopes the company can change course soon.”

That is some grade A hyperbole. Intel certainly has some issues and is facing challengers in a way that it hasn’t in some time. That said they are still the dominant player in the processor world and are nowhere near obscurity. Their closest rival, AMD, doesn’t do anywhere close the volume that intel does.

What Apple is doing is largely irrelevant to Intel since Apple doesn’t sell their chips to the broader market. So even though Apple Silicone can out perform Intel it is only relevant to the Apple ecosystem which is just a tiny fraction of the broader chip market.

techconc · January 15, 2021 4:56PM

mike1 said:

"We have to deliver better products to the PC ecosystem than any possible thing that a lifestyle company in Cupertino" makes, Gelsinger told employees. "We have to be that good, in the future."

This is not a promise. It is a call to action delivered to motivate his employees.

It's more like a public admission that Apple is kicking their butt on a technical level and that they have become the gold standard in chip design. They can rally the troops all they want, however, the x64 ISA is still a handicap. Also, there is no magic answer for their manufacturing process deficit for the next several years either. Their internal efforts are likely to fail and will still be behind whenever they do hit 7nm. If they want a contract with TSMC who is the current leader, they'll have to get in line behind Apple and everyone else. They will still trail Apple in that regard as well.

georgi0 · January 15, 2021 4:56PM

This reminds me of a song called

bye bye Mrs American pie...

Incoming Intel CEO demands better chips than 'lifestyle company in Cupertino'

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