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Intel; Lot Of Questions Begging For Answer

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Intel (NASDAQ:INTC)

This year has clearly been bad for semiconductor businesses, particularly recently. However, Intel (NASDAQ:INTC) has been exposed to so many faults and failures that one wonders if they are competent enough to compete in this business, which has become considerably more competitive. This is not to suggest that Intel has failed at everything. Still, it has failed miserably in certain ways that are difficult to comprehend.

Intel was a strong buy a few months ago; today, it is a buy. Maybe. I don’t have solutions; I only attempt to comprehend the questions. Let’s go through them now. What is causing Intel to lose market share to AMD? Tiger Lake (Intel’s 11th mobile) has always been somewhat superior to Zen 3. Alder Lake outperforms Zen 3 in mobile and desktop use, although Intel lost market share. What caused this to happen? What caused this to occur?

How do Intel’s (NASDAQ:INTC) Raptor Lake and Meteor Lake stack against Zen 4? First, Zen 4 is a significantly larger generational jump than Raptor Lake compared to Alder Lake. It has to be, given how far behind Zen 3 is. The kicker is that Zen 4 is based on TSMC’s 5nm technology, whereas Zen 3 was built on its 7nm process.

Because the newest node is much denser, you can be certain that the cost per transistor will be lower over time. Raptor Lake, like Alder Lake, is based on Intel’s “7” node, but it’s bigger and better. However, it is not as much better as the Zen 4 is when compared to the Zen 3. Given that Intel lost market share to AMD (for reasons I can’t begin to comprehend, other than incompetence) when Alder Lake competed against Zen 3, competing against a product that is closer in performance while being likely less expensive to produce than its predecessor doesn’t sound like an appealing situation. How does Intel keep its market share?

Then there’s Meteor Lake. This will probably be released before AMD responds, but does it matter? Intel (NASDAQ:INTC) switches to its “4” process and employs EUV for the first time in the production of the CPU. However, early indications indicate that the design is similar to Raptor Lake and will not provide a significant performance boost. While not confirmed, it would not be surprising given Intel’s recent moves to a new node and the use of EUV as part of the process for the first time, not to mention the use of “tiles” for the first time. It’s a lot to take in.

While the CPU will be manufactured on Intel’s “4” platform, everything else active will be manufactured by TSMC, including the GPU and IO. Because CPUs are such a small portion of the chip, this poses even more concerns. The first question is how this can save money and allow Intel to compete on pricing, given that Intel (NASDAQ:INTC) still needs to pay for creating additional nodes. The incremental costs of building on those nodes should be far lower than contracting out the labor. And the second question is, what will they use their capacity for, given that TSMC manufactures most CPU modules?

You’d assume they’d use this capacity for prospective foundry clients, but there aren’t any for Intel 4. Intel 3 will be more interesting, but it will be released later. In contrast, Intel 4 is a pure high performance, with no high-density libraries, and hence primarily appealing for Intel’s CPUs. So, as Meteor Lake replaces previous generations, and given Intel’s (NASDAQ:INTC) inability to produce GPUs on I4 for the above reasons, what will the fabs be doing? Making outdated goods? That is far from ideal.

Of course, the most pressing concern is why Intel is so inept regarding server parts and why Sapphire Rapids is continuously delayed. Isn’t this a firm that manufactures server chips? Aren’t they the industry leaders and have been for decades? How did this happen, not only at Ice Lake but also at Sapphire Rapids? It’s not just one delay; there are several of them. We’ve reached the point where we must ask ourselves if Intel is still skilled enough to compete in this area. All evidence suggests the opposite. Every opportunity they’ve had to refute it has just proved their incompetence.

The organization has some merits, but its ineptitude and failure may put severe concerns on its leadership. Such catastrophic failures seldom follow one another, but INTC does it brilliantly. Everything in our field takes time, so credit or dishonor might occasionally fall on the wrong individual. Still, for the first time, I have reservations about Pat Gelsinger.

I’m still cautiously enthusiastic about them since they have so many benefits over firms that don’t have fabs but don’t create their parts. There are several chances accessible to the organization, but does it matter if they are not effective in capitalizing on them?

I suppose it all boils down to one main question. That is, is INTC capable? They aren’t. They have repeatedly experienced failure and delay in servers, GPUs, and process technologies. They lost market share in the mobile and desktop segments with superior goods. We have good promises about this node and this or that product. But, in reality, it’s been one failure after another. Perhaps a better question is, can they learn to be competent? I’m not sure; we’ll see. I’m naturally optimistic and usually disappointed, but I will give Pat another six months before making a decision. If there is progress, I will maintain the stock; if there is further fumbling and failure, as well as market share losses, there are many better investments to make than this behemoth.

Featured Image-  Megapixl @Danielconstante 

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