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Intel Corporation Message Board

  • wallisweaver wallisweaver Nov 20, 2011 5:29 PM Flag

    Fabrication Primer for Fanbois-Part I

    First, you do understand that this is the computer business, right?
    And, you do understand that in the computer business any company that stands still usually doesn't last long, right?
    And you do know what fabrication is, right?
    And that fabricating chips that are smaller, have more transistors, are more powerful and consume less energy, is the way that semi companies avoid standing still?

    Are you still with me? Because I'm making it as simple as I can...

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    • From the conference call Q&A:

      "Okay. Mark, let me just -- let me also add to that. I hear this argument a lot about ARM coming into the PC segment of the market, and the way I hear it articulated from some of our competitors is they're talking about they're going to come into that segment of the market, which is the low -- very low end of the PC market with a $30 processor to compete against our $100 processor and therefore, they win. I think if you look at the low end of the market today, it's pretty instructive. We're there today with $30 processors where we make a very good product margin on, actually, $30 kits in that segment of the market. AMD, our prime competitor, is in there, well under our pricing. They're selling at a $20-kit pricing. We still win the lion share of that market, and we win the lion share of that market because we bring more performance, we bring features, we're a reliable supplier, we have high quality levels. All of the benefits of doing business with Intel shine through there. It's going to be the same issue with ARM. All of those advantages will be even more so against ARM. And with AMD, they're socket and application compatible. With ARM, they're not. And so the cost and the complexity to our consumers is quite a bit higher. So I'm really confident in our play in that space. And as Paul said, at the end, it all comes down to we're solving these problems of physics 2 years ahead of the rest of the industry, that gives us a cause-to-performance a future advantage that become very difficult for people to match."

      http://seekingalpha.com/article/300442-intel-s-ceo-discusses-q3-2011-results-earnings-call-transcript?part=qanda

    • 'Intel thinks, according to business models, that it can sell the CPUs for 100 dollars a piece into smartphones.'

      I don't think so when you can pick an ARM one up for 10 times less. Even desktop and notebook asps have dropped below $100.

    • Some people like a Porsche sport car. Others like a comfortable big car. Still others prefer a small truck.

      Intel comes into the game in phones with a seemingly huge disadvantage. But people, and most analysts seem to have forgotten how fast the Apple phone crushed the Blackberry. Blackberry had all the advantages that people spew out about Arm based phones and tablets when talking about how impossible it is for Intel to enter the game successfully.

      Google is going with Intel. Other major phone makers will too.

      Of course it will be a fight.
      The companies fighting to hold onto the phone market will fight for their lives. But that will not stop Intel from eating away at their market shares.

      The boys at ARM did great as long as Intel did not consider the phone market a worthy target but things have changed. Intel now sees the defense of the smart phone market as a life and death fight. Companies going into this fight with Intel have a perfect record over 40 years.

      None of them have removed Intel from the Chip fight yet. They have all lost.

      Yes
      Arm is first into phones.
      But first of course does not mean forever does it.
      Some believe that Intel cannot shrink power usage in the chips 50 fold, as it said it would by 2012.

      Go ahead and make your bet.

      Even the Intel fanboys do not see the huge profits to be made selling Intel CPUs into phones.

      Intel thinks, according to business models, that it can sell the CPUs for 100 dollars a piece into smartphones.
      Now given that it estimates That there will be over 300 million smart phones sold in 2014, that is a huge profit increase for Intel should it get most of the smart phone market to use an Intel X86.

      You make your bet.
      But Goldman said Intel would be shrinking now and it is instead growing rapidly.

      That 4 billion net profit in a quarter that you will soon see is real money. The 5 billion net profit you will see in 12 to 18 months will be another great quarter.

      Tell Goldman SUCKS to fire all of its so called chip experts because they are MORONS!

    • Arm ships NO cores.

      It simply contracts out a design and other companies make chips based on the a design.

      x86 vs ARM: Predicting The Future
      Leakage current becomes more significant with each generation of process technology. The power consumed by actively switching transistors has been radically reduced over the last few years, leaving leakage as the more significant source of current consumption. It is difficult to estimate how serious the effect is, but this article from March 2008 shows leakage current starting out relatively insignificant in 180 nm silicon but growing to nearly 40% of total power consumption in a 50 nm process.

      So far as I can see, this trend will continue. Leakage current will soon become the dominant factor in CPU power consumption. In fact, in 32 nm processes it might already be the primary factor. This is where the game changes: the advantage for total power consumption shifts away from the efficiency of the CPU architecture and design, and to the process technology of the fab. Presumably, this trend informed Intel's decision to sell their ARM assets to Marvell: there is little reason to enrich a competitor if the advantages of doing so will diminish over time.



      There is still room for clever design, of course. To reduce active power consumption, processor designs have long stopped the clock to unused portion of the CPU. To reduce leakage current, AMD is taking the next step to actually remove the power supply to those portions of the CPU. For ARM, that design choice makes even more sense. ARM has no control over the fab, their designs have to minimize assumptions about the underlying silicon technology.

      Right now ARM reigns supreme in the mobile space, but the strengths which gave it an advantage over x86 are rapidly becoming less compelling. Having to compete directly on silicon process sophistication moves the game onto Intel's turf, which Intel is happy to capitalize on with its Medfield platform. Its a great time to be in the mobile space.

    • 'Well, the thing is that ARM needs a fab, or a series of fabs, rather than each and every individual ARM shop. It certainly isn't feasible for each ARM shop to have a fab and if all the big ones built fabs, what would the small ones do?'

      ARM doesn't make any chips so it doesn't need any fabs. Samsung has its own fabs due to its total semiconductor volume. The rest can use TSMC or GF.


      'Sure, Apple can afford a fab. But what if Apple actually wanted to build a fab? First, they don't have the technology. Next, it would take them ten years to enter the foundry business. And last it would be a disaster for their shareholders. So, no - Apple isn't going to build a fab.'

      Apple could just buy IBM's NY Fab and its technology if it wanted to.


      'You're stuck with TSMC and that's it. And they can't keep up with Intel. Hmmm. So, what does all of this mean? Hmmm. Thinking. Oh, yeah - it means that ARM has a huge honking fabrication problem that can't be solved'

      ARM cores are much smaller and more power efficient (RISC) than x86, they don't need to keep up as I have demonstrated with actual examples time after time unlike you and your vague hand waving but hey keep knocking yourself repeating this 'fabrication problem' nonsense if it floats your boat, it means nothing to the rest of the world. INTC production will not be 100% 22nm at the end of 2012 either.

      Meanwhile back in the real world quad-core 40nm ARM phones will be coming out in days while Intel still struggles to produce a 32nm single-core phone chip for sale. That shows how absurd and irrelevant this fantasy 'fabrication problem' is in the real world ;-).

    • "ARM earns about 7 cents per core."

      [Yep and that's why their revenues are so low...]

      "Is IBM fabless? Is Samsung fabless? Is Toshiba fabless?
      Do you think Apple couldn't afford a fab? How about QCOM?"

      [Well, the thing is that ARM needs a fab, or a series of fabs, rather than each and every individual ARM shop. It certainly isn't feasible for each ARM shop to have a fab and if all the big ones built fabs, what would the small ones do?

      Sure, Apple can afford a fab. But what if Apple actually wanted to build a fab? First, they don't have the technology. Next, it would take them ten years to enter the foundry business. And last it would be a disaster for their shareholders. So, no - Apple isn't going to build a fab.

      You're stuck with TSMC and that's it. And they can't keep up with Intel. Hmmm. So, what does all of this mean? Hmmm. Thinking. Oh, yeah - it means that ARM has a huge honking fabrication problem that can't be solved...]

    • "You really don't understand the numbers. Or ARM. Or the business model. For that mater you dont seem to have a grasp of technology either."

      [Oh, really. I suppose you are going to support some of these claims. Because you know what? A lot of my stuff comes straight from Intel. Are you going to tell them they don't understand the technology?]

      "For some reason you (and others) think that ARM's future growth depends on taking market share from Intel. This is not the case."

      [Just more of your ignorance. You won't find any place that I have said that. But all things being equal growth is growth. ARM has to have huge growth to maintain it's P/E ratio. It has to come from somewhere but I think it's silly to assume it would come from Intel. I assume that they will continue to grow in existing markets. I just think it will be difficult to sustain the necessary growth for that huge P/E ratio, given that they have a fabrication problem.]

      "For the next few years hardly any revenue (if any at all) will be derived from Intel's core markets. So where will the growth come from to (partly) justify that lofty PE?"

      * Micro controllers. The 'low end', the $1 chip.
      * Design wins in other embedded markets (such as smart TV, set top box).
      * The near doubling of royalty generated per chip (from 1% to 2%) in the smart phone/tablet section (due to the increases ARM IP in each chip) @ 28nm and below.
      This later point is one of the key *reasons* why the pe ratio is high."

      [I just don't see it. In the last conference call, ARM said they would have to make their Q4 numbers from backlog rather than true sales growth. This is a very troubling sign that the ARM growth story is ending. The only way it can continue is if Intel doesn't take any smart phone market share and ARM manages to solve its fabrication issues. I don't see either much less both working out in ARM's favor...]

    • Dunno how many cores they are shipping a quarter but I know the revenue isn't very much. ARM's revenues are less than what Intel spends on R&D...

      ...
      Intel stated that it's always better economically to have a fab if you can afford one. And therefore the only companies that don't have them are the ones who can't afford them.
      ....

      That's why all the ARM shops are fabless. They can't afford fabs.
      -----

      ARM earns about 7 cents per core.

      Is IBM fabless? Is Samsung fabless? Is Toshiba fabless?

      Do you think Apple couldn't afford a fab? How about QCOM?

    • It doesn't matter how many cores ARM shipped last quarter.

      ARM's revenues have to keep headed up at an incredible rate in order to continue to justify that HUGE P/E ratio.

      There's just no way they can do that with only shipping 10 percent 28nm processors at the end of 2012 and then having more delays on 20nm and then having no plan to move to 14nm.
      ...
      I'm starting to detect some real panic in you ARM fanbois over this issue. If you were smart you would have just kept it quiet and low-balled it. With your 50 posts a day, all you have done is brought extra attention to ARM's fabrication problems. And now the word is getting out...
      -----

      Perhaps you are right. We'll see an article in the ee times pointing to this board and the wisdom you are presenting. Days later the entire ARM ecosystem collapses. Or maybe not.

      You really don't understand the numbers. Or ARM. Or the business model. For that mater you dont seem to have a grasp of technology either.

      For some reason you (and others) think that ARM's future growth depends on taking market share from Intel. This is not the case.

      For the next few years hardly any revenue (if any at all) will be derived from Intel's core markets. So where will the growth come from to (partly) justify that lofty PE?

      * Micro controllers. The 'low end', the $1 chip.
      * Design wins in other embedded markets (such as smart TV, set top box).
      * The near doubling of royalty generated per chip (from 1% to 2%) in the smart phone/tablet section (due to the increases ARM IP in each chip) @ 28nm and below.

      This later point is one of the key *reasons* why the pe ratio is high.

    • Dunno how many cores they are shipping a quarter but I know the revenue isn't very much. ARM's revenues are less than what Intel spends on R&D...

      That's why all the ARM shops are fabless. They can't afford fabs.

      Intel stated that it's always better economically to have a fab if you can afford one. And therefore the only companies that don't have them are the ones who can't afford them.

      Also the economic sweet spot is moving to a new fab every eight quarters. ARM has absolutely no hope of doing that.

      Do they explain anything about economics to you guys in the marketing department?

      The fabless model is broken. This is the reason ARM has a fabrication problem with no solution. It's all about the Benjamins...

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