The company put the statements in the 10Q about potentially stopping process technology development to meet their fiduciary responsibilities to investors. This is a huge statement and needs to be taken seriously by employees. Basically, Intel needs to land big external foundry customers for 14A within the next year. Intel has been trying to get into the foundry business for well over a decade with marginal results. Do you really think that this is going to happen? If your answer is yes, then keep doing what you are doing. If the answer is no then you need to be planning your exit starting right now. You have a little lead time. In the event that stopping process technology development happens the layoffs will be on an epic scale and happen very rapidly. There is no way the company will be able to provide the severance packages they currently offer. It is your career and your life are you willing to gamble it on Intel management?
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yes, we have accepted the severance. Current severance package is paid out monthly so long as you swipe your badge.
Bulk server and PC power consumption ! Lower chipset power loads across data centers right down to consumer PCs and you will have markets that will buy !
Crazy part is everyone will ignore this or forget this is happening…. Even though it’s right there written down
@d6 If you knew that song was about going to a bar called 'Highway to He-l', would that seem all that bad?
LBT and the Board are merely stating what they have been working towards for some time now.
Eliminating IFS losses is Job #1.
One way to do that is to get rid of about half the fabs. Another way is to stop trying to be leading edge, but only if external demand remains too low to sustain the R&D cycle.
Even if IFS picks up external customers, I suspect the plan is to still spin it out. That might even be a requirement in order to get external customers to sign long term contracts.
Those potential customers do not want to rely on the Intel conglomerate as a supplier, plain and simple, and said so repeatedly since IFS was created.
LBT gets that, but it is questionable if IFS can be spun out while losing multiple billions per year. That has to stop..like now.
So expect more restructuring and some potentially dramatic changes for Floundry, because the losses must stop.
TLDR: Reach breakeven, Spin Out, Gain external customers.
This isn't rock-paper-scissors.
@cm it will be sooner than 2027. This is a major source of the cash bleed. It is good to see that they are done throwing good money after bad. Enough is enough, it didn't pay off.
On the Highway to He-L !
So Intel doesn’t even want 14A?
Deal is sealed. They just put that statement in to avoid future legal jeopardy. There will be no whale for 14A as TSMC ramps up US manufacturing. In parallel the x86 franchise is rapidly losing market share. Expect a blood bath in early 2027 and potentially the end of Intel.
Intel couldn’t make Intel4/3 attractive to anyone, couldn’t make 18A attractive.
Frankly why would any whale want to swallow I14A? Would you put your friendship to LBT ahead of the TSMC execution excellence?
@av this states more than the typical risk. This is terminate 14A and subsequent process technology development on the basis of conditions that are likely to happen. People like you at Intel that have just become too complacent with the status quo and think that this can go on for ever. Intel just posted a $2.9B loss on 12.9B of revenue and the margins dropped to 27.5%. The guidance for Q3 is a $1B loss. How long do you think this can go on. The products that are being released are not very impressive and equivalent performance is available from competitors for less cost.
"Ohh.. MY GOD we are having a fire sale!"
"Ohh... the burning. It burns me."
"Cant even see where the knob is."
- And Scene
@an Because 14A is now the next big thing. Look at older SEC submissions and you will find various statements about risks the company faces.
This is also the company starting to be more public about the various IFS scenarios that could play out.
I felt that breaking out IFS financials was a first step in opening up the option of splitting the company, and this is just more confirmation of how that might play out.
As the other poster stated, before a break up IFS would be partly sold off. The company will try to make it work, then will deal with it if it doesn't work.
Makes sense why external customers did not want much of 18A, but they should be ok with 14A if it performs. If they still stay away, then the next action will be taken.
People who paint all this as some certain or binary thing, simply don't understand how large companies handle risk and strategy. Better to think of it as a daisy chain, which will branch off as needed.
@aj if they are standard risk statements then why weren’t they included in previous financial statements?
@ak My eyes water just thinking about that, mostly due to the onions.
Hey, everyone else was doing it.
Back in the 1990’s we would roll out a new technology every 18 months, add a few months to ramp up yields and wafer starts. Then we would tie onions to our belts, as was the style at the time.
@ab The 10Q comments about 14a are just standard risk statements, which the company has to make.
However, it should be obvious to everyone by now that the only way the company can remain on leading node mfg is to either create much more internal volume, or pick up a few big external customers.
Failure to do that is a risk and the 10Q spells out what that risk has meant for some time now.
Anyone who doesn't see what is possible if things continue the way they are going, is a sheeple.
IFS would not stop process development, they would simply be reorganized to focus on the lagging node.
GF had to fall way back when they went through this, but I think IFS would simply have to step back 1 or 2 nodes and that would enable enough cost savings to make it sustainable.
The only way to be leading node is with external + internal, due to the scale needed to fill each fab. Lagging node can be sustained with internal volume.
So it is an economic decision, but probably IFS gets spun off as well.
Before then IFS would be broken up and the company would sell some of the entire fab sites. The fab footprint has not made sense in years, and now those older fabs are on a one way trip to being shuttered.
This is reality. Now the company just has to deal with it.
@a4 back in the 1990’s we would roll out a new technology every 18 months, add a few months to ramp up yields and wafer starts. 14A is much more complex. Five years sounds about right. Intel is a dead man walking.
Stopping process development is going to be a tough experience for Oregon. Any plans to cut the Quantum computing program?
I was ready to leave a year ago, but after 12 years a severance look good so I stayed and changed teams (a risky move on purpose). I would say stay if you can afford a vacation, otherwise start planning an exit this RSU will be worth nothing if things keep going south. I finally got my wish last July 15 need to take care of medical stuff and will be back on the market in a couple of months.
In all honesty, if your eyes only opened after yesterday's 10Q you have a bigger problem. i too was at some point convinced by the optimism that Gelsinger brought, but the reality is quite different, at that moment i decided to leave, and there was no looking back.
14A process technology is not ready and it will take at least 5+ years. It is hard for any customer to sign up.
It become chicken and egg issue: 14A need customer first, customer need 14A to be ready first. So which is first?