The irony is here is that with each new process node Intel needs more products just to generate the same amount of factory utilization... with chip demand falling 20% per year, and five nodes in four years, the math doesn't work out.
You end up with excess capacity, fab underloading charges and furloughed workers. Unless you get you revenues up, you have just designed a business model that will bankrupt yourself.
Moore's law is a two edged sword.
IFS baby, never had the need for advanced silicon been so great.
Sadly Intel isn’t the leader nor will it have the volume and diversity of products to ever be the leader again.
Gone the way of the dodo is Intel
Does this mean we won't get are rewards?
The company used to be very focused on product gross margins... it was in the50s/60s for a long time. Now it is well below 40%.
For the first time in decades, Intel has to worry about investing cash flows and SG&A... TBH, Intel isn't very good at running efficiently.
Is it a surprise that Intel is having such difficulty and generating such staggering quarterly losses... look at headcount. So far only about 10,000 have been cut. At a minimum the company needs to lose another 20,000 - 30,000 heads.
Intel used to be very good at right sizing the headcount to the business cycle... now it is woefully too slow and the cash bleed is staggering. I am losing faith.
Except leaders did not pride themselves on selling volume but gross margin. Go figure.
Oh, Intel solved this problem long ago.
Instead of making products more cost effective, we increase the die size even with smaller generation nodes.
You see, that way can fill the fabs anytime we like. Although we lose money on ever chip we sell, we believe we can make that up with volume.