I gave Intel a hard time last week over its ads targeting Apple's new M1 processors by bringing back Justin Long, who starred in the iconic "Mac vs PC" spots a dozen or so years ago. At the time, my point was that instead of attacking Apple's laptops, Intel might want to spend some time fixing what's actually wrong with, well, Intel.
Apparently, the ads were a head fake, and Intel's new CEO, Pat Gelsigner, is perfectly able to walk and chew gum at the same time. Or, more specifically, he can throw a little shade at his rivals while also admitting that the company he now runs has very big problems of its own. That's exactly what he did during a keynote speech called Intel Unleashed: Engineering the Future.
Intel's problems are both complex and remarkably simple. The complex part is that the company is far behind on its roadmap because of poor decisions it made years ago. As a result, companies like Taiwan Semiconductor Manufacturing Company (TSMC), which manufactures Apple's chips, have leapfrogged the iconic American birthplace of Moore's law.
That's embarrassing enough, but to make things worse, the company kept making promises it couldn't keep. That's actually the simple part--keep your promises--which, of course, implies you probably shouldn't be making promises in the first place if you can't keep them.
Gelsigner made some promises of his own, but this time it's different. I'll get to the why in a minute, but first, here's what he had to say about where he believes Intel is headed:
We're bringing back the execution discipline of Intel. I call it the Grovian culture that we do what we say we will do. That we have that confidence in our execution. That our teams are fired up. That we said we're going to do x, we're going to 1.1x, every time that we make a commitment. That's the Intel culture that we are bringing back.
It's hard to say whether Apple would have stuck around had Intel been able to keep its promises and deliver 7nm transistors when it said it would. There is, however, some alternate version of the narrative where Apple would design the chips it wanted, and Intel would have continued making them.
That version isn't even all that far-fetched considering one of the things Gelsigner said Intel would do is invest billions in building its own foundry business to serve the needs of its customers like Google and Amazon. Otherwise, it seems likely at least some of them would take the same route Apple did.
"We conservatively size the foundry opportunity as a $100 billion addressable market by 2025, with most of the growth coming from leading-edge computing, which is our expertise," Gelsinger said. That's an enormous opportunity that will allow Intel to turn one of its major expenses (manufacturing silicon chips) into a profit center by opening up capacity to third-parties.
It's the same strategy Amazon used to turn AWS into its most profitable business division. It built out a cloud computing platform for which the company's online store is the first customer, and opened up the rest to anyone who wants to pay for it.
Most important, however, is that as Gelsinger laid out his plan and strategy for reclaiming Intel's lead in semiconductor manufacturing, he wasn't afraid to admit that the company had, in fact, lost its way. There's no getting around the fact that Intel hasn't been able to keep its promises.
When Intel initially designed 7 nanometers, EUV was still a nascent technology so we developed our process to limit the use of EUV. But this also increased the process complexity. As EUV then matured and became more reliable, we experienced the domino effects of our 10-nanometer delay which pushed out 7-nanometers and ultimately put us on the wrong side of the EUV maturity curve.
Essentially, Intel bet wrong when it started designing for smaller processes, and it cost the company in terms of delays and credibility. Without getting too far into the weeds, Intel fell behind because of the choices it made when designing its 7 nanometer process alongside its 10 nanometer process.
Smaller transistors sizes mean that you can design more power-efficient chips. For example, Apple's M1 and A14, the processors in the newest Macs and iPhones, respectively, are 5 nanometer chips.
I have no doubt the company is capable of engineering its way out of the complex issues that resulted in delays. The important thing here is that Gelsinger's statement is an attempt to rebuild credibility. That, by the way, almost always starts by admitting you were wrong.
It's counterintuitive, I know. Leaders don't like to admit they're wrong any more than anyone else does. As humans, we have an almost allergic aversion to the words "I was wrong." In many cases, however, you earn far more credibility by admitting you made a mistake--especially when everyone else can already see that's true.