Intel teams with Google Cloud to develop new class of data center chip
Intel Corp and Alphabet Inc's Google Cloud on Wednesday said they have worked together to create a new category of chip that Intel hopes will become a major seller in the booming cloud computing market.
The new chip, which is called Mount Evans and will be sold to others beyond Google, reflects the way that cloud computing providers operate. They build huge data centers full of powerful physical computers and sell virtual slices of those machines to other businesses, who in turn get better bang for the buck than building the machines themselves.
For cloud providers, tasks like setting up the virtual machines and getting customer data to the right place are essentially overhead costs. The Mount Evans chip, which Google and Intel have dubbed an "infrastructure processing unit" (IPU), separates those tasks out from the main computing tasks and speeds them up. Doing so also helps ensure the safety of those functions against hackers and adds flexibility to the data center.
- Reuters
L
Why Intel stock is poised to rise.
1. DCG woes were not limited just to Intel and are apparently over. In a note released on Monday morning, Mizuho Securities reported that Asian supply chain checks and talks with U.S. hardware OEMs pointed to a strong rebound in cloud server spending in the first quarter and first half of 2021, following a soft Q4. Facebook has indicated HW capex at 21-23bn USD in 2021 as opposed to $16bn in 2020. (Source: Marketwatch). MU, WDC and Samsung guided along same lines for Hyperscalers.
Without even going into the marketshare, it is going to be a big pie.
2. Intel's CPU + server GPU solution offers lower TCO for cloud gaming and other applications (Anandtech). The cloud gaming revenue is going to explode from $585nm in 2020 to approx $5bn. With Intel's GPU being sampled and right in time, it will lead to revenue expansion. BTW, Intel's server GPU demonstrated 42TFLOPs (for FP16) on Silicon which is double of nVIDIA's Ampere making its server offerings much more compelling
3. IceLake 32 core beats AMD EPYC Rome and we are not even talking about saffire rapids due 2H 2021 (Source: Wccftech). Available in Q1 2021 Intel Claims Its 32 Core Ice Lake-SP Xeon Beats a 64 Core AMD EPYC ‘Rome’ CPU By Up To 30%, Volume Ramp In Q1 2021
4. Intel is expecting to ship 30% more 10nm products coming year.
5. Mobileye, with the advent of ADAS as mainstream is poised to proliferate. 8 out of 10 cars certified by European agency for overall best ADAS use Mobileye solution (EETimes)
6. With their integrated AI solutions, Habana Labs chips (sampled right now), PCIE5 first mover advantage, Optane, technologically, Intel is on strong footing.
Competition will do well but any major disruption in server market share or even mobile is unlikely. And supply constraints will haunt competition too, as already admitted.
Continued 5G rollout will offer lots of opportunities too.
GLTA, let's see how it unfolds coming year!
L
Remember Apple M1 performance, which to be honest is impressive (from efficiency point of view) and how much (deserved) hype it generated?
Keeping it at very high level, the main reasons were a very wide decode unit (=8, compared to max 5 in x86 usually) and a DEEP Re-Order Buffer (ROB, which keeps a buffer of requests to be executed by the CPU. Please google Apple M1 Anandtech if you really want to get the nitty gritties). Of course a 5nm node fab also helped Apple in M1 which BTW is an impressive product.
Why can't Intel emulate that was a question asked? The main reason is Apple owns the whole ecosystem, including software (read OS) which Intel DOES not so unless software supports these, there is no point in implementing those in hardware (CPU) by Intel.
Enter Alder Lake (with BIG.LITTLE arch) and MAJOR Windows release (WIndows Sun Valley), due late fall 2021. The timing is not a coincidence. In order to compete against Apple, Wintel has to work in tandem which they seem to have done. Moore's law is dead channel has mentioned explicitly that MSFT is coming with major updates to scheduler and it is no coincidence Intel's Alder Lake will be able to exploit those to perform much better. Check that out. If you connect the dots, there is a good likelihood Alder Lake will be revolutionary.
I also just checked randomly on Intel openings, they have several opening for CPU micro-architects with experience in RTL design and expertise in Out-of-Order execution in CPUs, check out yourself. While OOO is not something entirely new, it fits aligns with this narrative.
And yes, it may give a big boost to Intel and its stock price. GLTA longs!
P
Going forward, the Intel business plan appears to be centered around selling fab services. Their Foveros technology accommodates chipets from just about any source, enabling them to manufacture 3D products for virtually any design firm. They also seem willing to combine X86 cores with other chiplets ranging from 5G to memory to ARM. Such a plan makes sense only if they intend to invest enough money and time in fab technology to manufacture the completed integrated circuits for the design company. The $20B investment promised for Arizona will have to be followed by even greater capital investments in locations throughout the world to keep pace with the likely demand for computational products.
AMD, on the other hand, is limited in their growth opportunities since they no longer own a fab operation. Whatever AMD sells that depends on TSMC technology will have a gross margin that reflects the portion of the value provided by TSMC. AMD's 3D stacking technology appears to need them to bond them with one memory supplier, which will also want a suitable piece of the total pie. Once AMD gets done sharing the pie so many ways, there will be a smaller piece remaining for them.
Future success for both companies will be determined over several years by their selection of the best business plan.
D
INTC is one of the very few undervalued or properly priced stocks available.
h
Everyone says Intel is dead. Fabs increased production by 100% in last 3 years, running at full capacity and then some. $80billion in revenue! Let me spell that out:
$80,000,000,000
Around $18,000,000,000 in net profit!
Apple and Microsoft hurt, but total they make up about 5% of revenue. The deals that Apple and Microsoft had with Intel, based on them being Apple and Microsoft, were low profit margin areas that will quickly be replaced by higher margin customers. The demand is tremendous.
Intel’s moving to AI chips, MobileEye, cloud and that will keep revenue growing.
I believe this will be one of the gems that people,in 3-5 years, are going to be very happy they purchased.
L
Don't worry ...Be Happy! Market likes to play games with newbies. INTC has good things coming up in the next 6 months that will make this price look like a steal. Watch what happens when the following news starts to be "announced" by the main stream media:
- ARC GPU Graphic Cards ...on store shelves for sale and contributing NEW revenue to next ER. If you are into Tech and building/upgrading PC's you would know that Graphics cards are in such limited supply (partially due to Crypto miners) thatbthey are sold out immediately upon delivery to retailers and sold at 2 to 3 times MSRP! Intel is about to bring supply this demand with their own products... If Intel can fulfill all the excess demand their revenue will explode, In addition, NVDA and AMD will lose GPU market share to Intel.
- New Notebooks and Desktops with Discrete ARC GPU's coming out for sale this quarter...again, taking discrete GPU market share from NVDA and CPU/GPU market share from AMD.
-U.S. Bill working through Congress for $52 Billion to support building Chip Fabs in U.S. Intel will benefit from this bill with the 2 new plants the will be building. Mega new plant in Ohio and more capacity in Arizona. NOTE: If China decides to take military action in Taiwan (where 80% of chip production is currently done) and supply there is disrupted, the only company with foundries that can continue to supply chips is...Yep you got it...Intel. Almost all AMD and NVDA chips come from Taiwan and thy would be left with zero products to sell. This could happen any time after the winter Olympics being held in China. Watch what happens to intel stock if that scenario plays out.
-Mobileye makes chips/systems for autonomous driving vehicles. Bought in 2017 by Intel for $15B. Reports appear that Intel CEO is looking for a June 2022 IPO/ spinoff of Mobileye for $50B. you can imagine what that will do to Intel stock.
-Even faster chips than the currently fastest (Alder Lake chips) coming later this year.
There is more but this should suffice to show how the current stock price make Zero sense.
GLTA Intel investor...Just hang in till we get to June 2022 and we'll see how this turns out!
Which stock to own? $AMD or $INTC 8/13/21 AMD up 3.80% INTC down 0.09% You decide...
A
I may not understand new wave investment styles, but I do know $5.44 eps beats $0.51 eps. Others can fantasize about what their dream company is going to do in the future, and that is fine, it is good to dream, but I will stick with proven financials and forgo the pie in the sky expectations. When intel’s earnings start to decline and other companies start to pony up with solid returns, I will gladly look at those other companies. Do not get me wrong. AMD may be a great company with a great future, but for now, they are way overvalued, and Intel is way undervalued. Too much downside potential for AMD and some good upside potential for Intel.
*** Server super replacement cycle is coming in the first half of 2021 ***
I have been waiting to see if anybody, Wall Streets or Main Street seen this coming, which doesn’t look like it. I even dropped a hint more than a month ago when I wrote a long piece in $INTC and AMD boards, about Intel’s buyback and its financial engineering, and I flagged that sentence as well (check my history post).
So, what’s with this all about? This is an echo boom from 2018, the Spectre and Meltdown vulnerabilities induced panic buying.
When Intel revealed the vulnerability back in January 2018, Intel’s stock immediately took a hit. People even accused the ex-CEO Brian Krzanich sold his stocks prior to this, as Intel sat on the information for 6 months (informed by Google) before making it public.
I knew it then that Intel was toast, but not immediately. That’s why I started buying AMD shares in larger quantity and accumulating them for the long haul (average price below $12). Although the launch of Ryzen and EPYC were exciting, this is the break that AMD needed to make meaningful server market share gain down the road.
To mitigate the HARDWARE vulnerabilities, the system firmware needed to be patched. But the patching would cause a performance hit of 10% to 30%, and that’s a big deal. A properly sized server should have 50-70% CPU utilization at most time, below that is a waste of idle resources, above that could mean it may not be able to handle sudden spike of work demand. Servers’ statistics are being monitored and logged 24x7, among them are CPU utilization for abnormal activities and capacity planning. Each server would have customized threshold to be considered normal operation, exceeding that, warning or critical alarms would go out to operation personnel to investigate and take action if necessary. For example, a warning would go out if all CPUs in a server is running at 80+% for 2 hours, or a critical alert if they have been at 100% for more than 15 minutes, etc. Now, imagine how many alarms would be tripped after a server have been patched, Intel that own 99% of the server market share at the time had just made a bunch of enemies with people that run the datacenters. But the payback would be later.
For the immediate aftermath, Intel made it out like a bandit, they had huge earning beat for the next 2 quarters (look at the chart, 35% gain in 6 months) while the expectation was people would flee from buying Intel servers. Like it or not, you can’t just buy AMD servers to augment the Intel servers, it would take time to test everything before it could be rolled out to production. Yes, they are both x86 based, but underneath there are differences, like device drivers, libraries, kernel tuning and etc. Short term solution was to buy similar if not identical Intel servers to increase capacity, causing huge shortages as reported by Intel, remember those days?
Fast forward 3 years. Those extra servers will reach their “end of life” starting 2021. Unlike consumer PCs/laptops, people will keep using them as long as they meet their needs. I am still using one of my laptops that is 8 years old, although it was a top of the line Intel i7 when I bought it.
However, a server useful life is 3 maybe up to 5 years. There is a reason for the 3 years magic number. A new server typically comes with 1 year warranty, and the vendors will throw in 2 more years of extended warranty for a relatively small and attractive fees if agreed upon upfront. Servers hardly have any hardware issue in the first 3 years so it is extra income for them. 4th year on out, the service and maintenance fees increase substantially, and by how fast technology improve nowadays, it could be considered obsolete after 3 years anyway. On top of that, the finance and accounting people love that 3 years magic number too. It is a known fix cost that can be budgeted and depreciated over the useful life of the servers, simple math and everyone is happy.
After 3 years, whoever wants to migrate to AMD should have enough time to test out the development life cycle, if they are inclined to do so. This will be one of the larger if not the largest PREDICTABLE server replacement cycle in the history, Y2K was the other one. In fact, this is so predictable, that the front end purchase orders should start trickle in by now to beat the rush that caught everyone by surprise almost 3 years ago.
r
While INTC is very slow to reward shareholders with capital gains, there is no doubt that those who are patient will be rewarded if they wait long enough. INTC is very cheap on all metrics. 10.84 PE trailing twelve months, 9.22% earnings yield, EV/EBITDA 6.81, EV/free cash flow 12.53, free cash flow yield 7.90%. No way to argue, this stock is a bargain. Only question how long will you be waiting for that return, and is the dividend adequate compensation enough to pay you to wait? These are the things an investor needs to take into account with stocks like INTC. The future itself appears quite bright to me so ultimately I am willing to be patient. I like AMD and NVDA too though. I think all have something to offer. You just have to decide if you prefer quick returns or slow ones, as well as how much risk you're willing to take to get those returns. Compared to AMD and NVDA I see INTC as being low risk. All things to consider when investing. The risk/reward scenario is very important.
P
AMD’s chips are made by Taiwan Semiconductor Manufacturing Co., which has surpassed Intel in production technology. TSMC also supplies Apple Inc., Qualcomm Inc., Nvidia Corp. and many other technology companies, and the Taiwanese company is struggling to keep up with demand.
In my humble opinion, this is where Intel can rebalance in the next 5 years. So chip makers are not relying on TSMC, which is a sneeze away from being Beijing owned.
J
The market is realizing that Pat Gelsinger cannot turn the INTC ship overnight. The latest delay in Sapphire Rapids will allow $AMD to continue taking share of the data center market in 2022. I expect analysts with revise INTC PT down and AMD PT up.
Also, AMD is seeing lots of positive news on XLNX acquisition and the NEW GPU for cell phones. INTC is a value trap. Sell ASAP and redeploy into $AMD.
e
A lot of people worry about ARM when APPLE switched to use ARM for MAC. I think it was mainly because Apple wanted to have full control on its products and moved a step closer toward a locked down ecosystem (this could kill Apple or make it a lot of money, let's see, I think eventually any close system will die out). This shouldn't be a problem for x86, let's me explain why. x64 has been evolving a lot and it is no longer running x86 instructions internally, instead it decodes CISC instructions into an internal RISC format for execution (since 1995, Pentium Pro). Eventually, x86 and ARM will get closer in both performance and power efficiency. One example is the recent Intel Tiger Lake, that delivers high performance but also support up to 18 hours of battery life (battery life is similar or even better than Apple M1, despite of using 10nm comparing to 5nm of the M1). What set x86 apart are the eco system and mature software that run on x86 and that will not go away anytime.
h
Can anyone find me a company (stock) that generates almost 80 billion in a pandemic year, and will net between $18-$19 billion dollars that is trading for under 50 bucks?
Journalists and analysts overlook the AMD technology advantage.
1. Lower electric power cost 2. More cores/socket = lower software/socket cost 3. More cores = higher multi thread performance 4. More PCIe interconnects = better server to server communication 5. Security = lower ransom and extortion costs 6. High performance integrated graphics for thin light laptops 7. Matrix processor for artificial intelligence and machine learning. 8. Modular construction from chiplets = lower cost of production.
AMD modular construction is the result of a ten year research effort. Intel is stuck with monolithic design. Intel hired Jim Keller to lead the development of the two requisite technologies for modular construction: Infinity Connect and unified memory architecture. Jim suddenly quit for "personal reasons". I suggest Jim refused to violate AMD patents. Nor would he divulge trade secrets. Intel has no future until they reinvent the wheel. Ironically AMD developed modular construction while Pat Gelsinger, head of Intel research, was designing Itanium.
AMD has a ten year design advantage, and a ten year manufacturing advantage. Merger with Xylinx puts FPGA on AMD Epyc server chips to give a twenty year advantage. You heard Dr Lisa Su introduce layered SRAM that gives a single node advantage unavailable to Intel. You cannot stack SRAM on a hot monolithic intel chip.
Pat Gelsinger bet the Intel farm on Itanium and lost. Pat's new idea is to purchase GloFo and create a US foundry monopoly. Mubadala answered the phone once and hung up. There was no discussion.
Wall Street is livid that AMD is taking the x86 market from Intel and the graphics/matrix compute market from Nvidia. The collapse of those two market caps is catastrophic for institutional investors.
A short squeeze of hedge fund shorts in AMD stock may be of interest to you. 70% of the float is institutions who would like to purchase more and are bidding every day. 30% of the float is retail investor technology nerds who know the score. 7% of the float is hedge fund shorts who cannot cover. Finance majors know zip about technology. They wear loafers because they cannot tie their shoes.
$INTC
L
"Real men have fabs" said Jerry Sanders, ex-AMD CEO ironically. There is a reason he said so.
Here is what Qualcomm CEO said today: “If we could make more, we could sell it,” Qualcomm CEO Steve Mollenkopf told Reuters in an interview.
Intel is poised to ride on its ability to ramp-up as and when needed as it owns its fabs. There is no end to supply woes till AT LEAST 2H21. Intel will sell WHATEVER it can manufacture with handsome margins.
It should be recalled that servers/cloud infrastructure is bound for a massive upgrade this year owing to slack in 2021. FB has allocated 23bn for infrastructure, Google/AMZN all reported handsome results. Samsung/SK Hynix and Micron have already pointed to huge upswing in memory sales in servers as well as PCs.
Intel's Xeons are already being sampled and no one will even consider AMD as they can't even ensure supply. Intel is going to report stellar sales again. And the decision to keep fabs by Gelsinger will pay massive dividends to Intel shareholders in long run when world realizes they can not bank ONLY on TSMC.
W
Intel earns more than Amazon and AMD combined [annually]! Stay the course and keep calm!
W
Semtech Corporation SMTC has joined forces with Intel INTC in a bid to bolster its initiatives in Light Detection and Ranging (LiDAR) technology.
Notably, the company strives to build optical semiconductor platforms for LiDAR by incorporating its own optical semiconductor devices into Intel’s RealSense LiDAR Camera L515.
More precisely, the incorporation of Semtech’s advanced laser drivers and programmable transimpedance amplifiers (TIAs) into Intel’s L515 will deliver high-precision depth, with errors below 16mm at maximum operating range in the development of consumer LiDAR with high resolution.
In addition, with TIAs’ low input-referred-noise feature, L515 is capable enough to be a LiDAR system with high accuracy.
Notably, the latest collaboration is likely to aid Semtech in gaining strong footprint in the optical semiconductor space and solid momentum in LiDAR technology.
R
Some of the talk in the Yahoo video with the Wedbush analyst touched on Intel losing market share to firms now "making" their own chips, i.e. Apple and Amazon. I don't hear that they are actually "making" them. They are sending them to Taiwan Semi to have them made because only TSM (and maybe Samsung) has the fab processes capable of making the chips Apple, Amazon, Qualcomm, AMD, Tesla, etc are designing.
So although Intel Server and Desktop CPU's designs are now being pressured by AMD technologically, I suspect that the ability of TSM to service AMD and all of these other customers will be the bottleneck that saves Intel from meaningful AMD competition.
Also, Intel's strategy of providing fab services to companies like QCOM, AMZN and others is absolutely the right approach, since fab capacity seems to be the issue here.
Now the main issue that INTC investors have to face is how quickly can Intel execute on bringing their new fab processes into production at decent yields as well as simultaneously building new fab capacity. Thank goodness they now have an engineer in charge, and not a CPA, lawyer or salesman running the firm! Pat just has to execute (not a small task).
Intel Corp and Alphabet Inc's Google Cloud on Wednesday said they have worked together to create a new category of chip that Intel hopes will become a major seller in the booming cloud computing market.
The new chip, which is called Mount Evans and will be sold to others beyond Google, reflects the way that cloud computing providers operate. They build huge data centers full of powerful physical computers and sell virtual slices of those machines to other businesses, who in turn get better bang for the buck than building the machines themselves.
For cloud providers, tasks like setting up the virtual machines and getting customer data to the right place are essentially overhead costs. The Mount Evans chip, which Google and Intel have dubbed an "infrastructure processing unit" (IPU), separates those tasks out from the main computing tasks and speeds them up. Doing so also helps ensure the safety of those functions against hackers and adds flexibility to the data center.
- Reuters
1. DCG woes were not limited just to Intel and are apparently over.
In a note released on Monday morning, Mizuho Securities reported that Asian supply chain checks and talks with U.S. hardware OEMs pointed to a strong rebound in cloud server spending in the first quarter and first half of 2021, following a soft Q4. Facebook has indicated HW capex at 21-23bn USD in 2021 as opposed to $16bn in 2020. (Source: Marketwatch). MU, WDC and Samsung guided along same lines for Hyperscalers.
Without even going into the marketshare, it is going to be a big pie.
2. Intel's CPU + server GPU solution offers lower TCO for cloud gaming and other applications (Anandtech). The cloud gaming revenue is going to explode from $585nm in 2020 to approx $5bn. With Intel's GPU being sampled and right in time, it will lead to revenue expansion. BTW, Intel's server GPU demonstrated 42TFLOPs (for FP16) on Silicon which is double of nVIDIA's Ampere making its server offerings much more compelling
3. IceLake 32 core beats AMD EPYC Rome and we are not even talking about saffire rapids due 2H 2021
(Source: Wccftech). Available in Q1 2021
Intel Claims Its 32 Core Ice Lake-SP Xeon Beats a 64 Core AMD EPYC ‘Rome’ CPU By Up To 30%, Volume Ramp In Q1 2021
4. Intel is expecting to ship 30% more 10nm products coming year.
5. Mobileye, with the advent of ADAS as mainstream is poised to proliferate. 8 out of 10 cars certified by European agency for overall best ADAS use Mobileye solution (EETimes)
6. With their integrated AI solutions, Habana Labs chips (sampled right now), PCIE5 first mover advantage, Optane, technologically, Intel is on strong footing.
Competition will do well but any major disruption in server market share or even mobile is unlikely.
And supply constraints will haunt competition too, as already admitted.
Continued 5G rollout will offer lots of opportunities too.
GLTA, let's see how it unfolds coming year!
Keeping it at very high level, the main reasons were a very wide decode unit (=8, compared to max 5 in x86 usually) and a DEEP Re-Order Buffer (ROB, which keeps a buffer of requests to be executed by the CPU. Please google Apple M1 Anandtech if you really want to get the nitty gritties). Of course a 5nm node fab also helped Apple in M1 which BTW is an impressive product.
Why can't Intel emulate that was a question asked?
The main reason is Apple owns the whole ecosystem, including software (read OS) which Intel DOES not so unless software supports these, there is no point in implementing those in hardware (CPU) by Intel.
Enter Alder Lake (with BIG.LITTLE arch) and MAJOR Windows release (WIndows Sun Valley), due late fall 2021. The timing is not a coincidence. In order to compete against Apple, Wintel has to work in tandem which they seem to have done. Moore's law is dead channel has mentioned explicitly that MSFT is coming with major updates to scheduler and it is no coincidence Intel's Alder Lake will be able to exploit those to perform much better. Check that out. If you connect the dots, there is a good likelihood Alder Lake will be revolutionary.
I also just checked randomly on Intel openings, they have several opening for CPU micro-architects with experience in RTL design and expertise in Out-of-Order execution in CPUs, check out yourself. While OOO is not something entirely new, it fits aligns with this narrative.
And yes, it may give a big boost to Intel and its stock price. GLTA longs!
AMD, on the other hand, is limited in their growth opportunities since they no longer own a fab operation. Whatever AMD sells that depends on TSMC technology will have a gross margin that reflects the portion of the value provided by TSMC. AMD's 3D stacking technology appears to need them to bond them with one memory supplier, which will also want a suitable piece of the total pie. Once AMD gets done sharing the pie so many ways, there will be a smaller piece remaining for them.
Future success for both companies will be determined over several years by their selection of the best business plan.
$80,000,000,000
Around $18,000,000,000 in net profit!
Apple and Microsoft hurt, but total they make up about 5% of revenue. The deals that Apple and Microsoft had with Intel, based on them being Apple and Microsoft, were low profit margin areas that will quickly be replaced by higher margin customers. The demand is tremendous.
Intel’s moving to AI chips, MobileEye, cloud and that will keep revenue growing.
I believe this will be one of the gems that people,in 3-5 years, are going to be very happy they purchased.
Market likes to play games with newbies. INTC has good things coming up in the next 6 months that will make this price look like a steal. Watch what happens when the following news starts to be "announced" by the main stream media:
- ARC GPU Graphic Cards ...on store shelves for sale and contributing NEW revenue to next ER. If you are into Tech and building/upgrading PC's you would know that Graphics cards are in such limited supply (partially due to Crypto miners) thatbthey are sold out immediately upon delivery to retailers and sold at 2 to 3 times MSRP! Intel is about to bring supply this demand with their own products... If Intel can fulfill all the excess demand their revenue will explode, In addition, NVDA and AMD will lose GPU market share to Intel.
- New Notebooks and Desktops with Discrete ARC GPU's coming out for sale this quarter...again, taking discrete GPU market share from NVDA and CPU/GPU market share from AMD.
-U.S. Bill working through Congress for $52 Billion to support building Chip Fabs in U.S. Intel will benefit from this bill with the 2 new plants the will be building. Mega new plant in Ohio and more capacity in Arizona. NOTE: If China decides to take military action in Taiwan (where 80% of chip production is currently done) and supply there is disrupted, the only company with foundries that can continue to supply chips is...Yep you got it...Intel. Almost all AMD and NVDA chips come from Taiwan and thy would be left with zero products to sell. This could happen any time after the winter Olympics being held in China. Watch what happens to intel stock if that scenario plays out.
-Mobileye makes chips/systems for autonomous driving vehicles. Bought in 2017 by Intel for $15B. Reports appear that Intel CEO is looking for a June 2022 IPO/ spinoff of Mobileye for $50B. you can imagine what that will do to Intel stock.
-Even faster chips than the currently fastest (Alder Lake chips) coming later this year.
There is more but this should suffice to show how the current stock price make Zero sense.
GLTA Intel investor...Just hang in till we get to June 2022 and we'll see how this turns out!
Best
8/13/21
AMD up 3.80%
INTC down 0.09%
You decide...
I have been waiting to see if anybody, Wall Streets or Main Street seen this coming, which doesn’t look like it. I even dropped a hint more than a month ago when I wrote a long piece in $INTC and AMD boards, about Intel’s buyback and its financial engineering, and I flagged that sentence as well (check my history post).
So, what’s with this all about? This is an echo boom from 2018, the Spectre and Meltdown vulnerabilities induced panic buying.
When Intel revealed the vulnerability back in January 2018, Intel’s stock immediately took a hit. People even accused the ex-CEO Brian Krzanich sold his stocks prior to this, as Intel sat on the information for 6 months (informed by Google) before making it public.
I knew it then that Intel was toast, but not immediately. That’s why I started buying AMD shares in larger quantity and accumulating them for the long haul (average price below $12). Although the launch of Ryzen and EPYC were exciting, this is the break that AMD needed to make meaningful server market share gain down the road.
To mitigate the HARDWARE vulnerabilities, the system firmware needed to be patched. But the patching would cause a performance hit of 10% to 30%, and that’s a big deal. A properly sized server should have 50-70% CPU utilization at most time, below that is a waste of idle resources, above that could mean it may not be able to handle sudden spike of work demand. Servers’ statistics are being monitored and logged 24x7, among them are CPU utilization for abnormal activities and capacity planning. Each server would have customized threshold to be considered normal operation, exceeding that, warning or critical alarms would go out to operation personnel to investigate and take action if necessary. For example, a warning would go out if all CPUs in a server is running at 80+% for 2 hours, or a critical alert if they have been at 100% for more than 15 minutes, etc. Now, imagine how many alarms would be tripped after a server have been patched, Intel that own 99% of the server market share at the time had just made a bunch of enemies with people that run the datacenters. But the payback would be later.
For the immediate aftermath, Intel made it out like a bandit, they had huge earning beat for the next 2 quarters (look at the chart, 35% gain in 6 months) while the expectation was people would flee from buying Intel servers. Like it or not, you can’t just buy AMD servers to augment the Intel servers, it would take time to test everything before it could be rolled out to production. Yes, they are both x86 based, but underneath there are differences, like device drivers, libraries, kernel tuning and etc. Short term solution was to buy similar if not identical Intel servers to increase capacity, causing huge shortages as reported by Intel, remember those days?
Fast forward 3 years. Those extra servers will reach their “end of life” starting 2021. Unlike consumer PCs/laptops, people will keep using them as long as they meet their needs. I am still using one of my laptops that is 8 years old, although it was a top of the line Intel i7 when I bought it.
However, a server useful life is 3 maybe up to 5 years. There is a reason for the 3 years magic number. A new server typically comes with 1 year warranty, and the vendors will throw in 2 more years of extended warranty for a relatively small and attractive fees if agreed upon upfront. Servers hardly have any hardware issue in the first 3 years so it is extra income for them. 4th year on out, the service and maintenance fees increase substantially, and by how fast technology improve nowadays, it could be considered obsolete after 3 years anyway. On top of that, the finance and accounting people love that 3 years magic number too. It is a known fix cost that can be budgeted and depreciated over the useful life of the servers, simple math and everyone is happy.
After 3 years, whoever wants to migrate to AMD should have enough time to test out the development life cycle, if they are inclined to do so. This will be one of the larger if not the largest PREDICTABLE server replacement cycle in the history, Y2K was the other one. In fact, this is so predictable, that the front end purchase orders should start trickle in by now to beat the rush that caught everyone by surprise almost 3 years ago.
In my humble opinion, this is where Intel can rebalance in the next 5 years. So chip makers are not relying on TSMC, which is a sneeze away from being Beijing owned.
Also, AMD is seeing lots of positive news on XLNX acquisition and the NEW GPU for cell phones. INTC is a value trap. Sell ASAP and redeploy into $AMD.
This shouldn't be a problem for x86, let's me explain why.
x64 has been evolving a lot and it is no longer running x86 instructions internally, instead it decodes CISC instructions into an internal RISC format for execution (since 1995, Pentium Pro). Eventually, x86 and ARM will get closer in both performance and power efficiency. One example is the recent Intel Tiger Lake, that delivers high performance but also support up to 18 hours of battery life (battery life is similar or even better than Apple M1, despite of using 10nm comparing to 5nm of the M1).
What set x86 apart are the eco system and mature software that run on x86 and that will not go away anytime.
1. Lower electric power cost
2. More cores/socket = lower software/socket cost
3. More cores = higher multi thread performance
4. More PCIe interconnects = better server to server communication
5. Security = lower ransom and extortion costs
6. High performance integrated graphics for thin light laptops
7. Matrix processor for artificial intelligence and machine learning.
8. Modular construction from chiplets = lower cost of production.
AMD modular construction is the result of a ten year research effort. Intel is stuck with monolithic design. Intel hired Jim Keller to lead the development of the two requisite technologies for modular construction: Infinity Connect and unified memory architecture. Jim suddenly quit for "personal reasons". I suggest Jim refused to violate AMD patents. Nor would he divulge trade secrets. Intel has no future until they reinvent the wheel. Ironically AMD developed modular construction while Pat Gelsinger, head of Intel research, was designing Itanium.
AMD has a ten year design advantage, and a ten year manufacturing advantage. Merger with Xylinx puts FPGA on AMD Epyc server chips to give a twenty year advantage. You heard Dr Lisa Su introduce layered SRAM that gives a single node advantage unavailable to Intel. You cannot stack SRAM on a hot monolithic intel chip.
Pat Gelsinger bet the Intel farm on Itanium and lost. Pat's new idea is to purchase GloFo and create a US foundry monopoly. Mubadala answered the phone once and hung up. There was no discussion.
Wall Street is livid that AMD is taking the x86 market from Intel and the graphics/matrix compute market from Nvidia. The collapse of those two market caps is catastrophic for institutional investors.
A short squeeze of hedge fund shorts in AMD stock may be of interest to you. 70% of the float is institutions who would like to purchase more and are bidding every day. 30% of the float is retail investor technology nerds who know the score. 7% of the float is hedge fund shorts who cannot cover. Finance majors know zip about technology. They wear loafers because they cannot tie their shoes.
$INTC
There is a reason he said so.
Here is what Qualcomm CEO said today:
“If we could make more, we could sell it,” Qualcomm CEO Steve Mollenkopf told Reuters in an interview.
Intel is poised to ride on its ability to ramp-up as and when needed as it owns its fabs. There is no end to supply woes till AT LEAST 2H21. Intel will sell WHATEVER it can manufacture with handsome margins.
It should be recalled that servers/cloud infrastructure is bound for a massive upgrade this year owing to slack in 2021. FB has allocated 23bn for infrastructure, Google/AMZN all reported handsome results. Samsung/SK Hynix and Micron have already pointed to huge upswing in memory sales in servers as well as PCs.
Intel's Xeons are already being sampled and no one will even consider AMD as they can't even ensure supply.
Intel is going to report stellar sales again. And the decision to keep fabs by Gelsinger will pay massive dividends to Intel shareholders in long run when world realizes they can not bank ONLY on TSMC.
Notably, the company strives to build optical semiconductor platforms for LiDAR by incorporating its own optical semiconductor devices into Intel’s RealSense LiDAR Camera L515.
More precisely, the incorporation of Semtech’s advanced laser drivers and programmable transimpedance amplifiers (TIAs) into Intel’s L515 will deliver high-precision depth, with errors below 16mm at maximum operating range in the development of consumer LiDAR with high resolution.
In addition, with TIAs’ low input-referred-noise feature, L515 is capable enough to be a LiDAR system with high accuracy.
Notably, the latest collaboration is likely to aid Semtech in gaining strong footprint in the optical semiconductor space and solid momentum in LiDAR technology.
So although Intel Server and Desktop CPU's designs are now being pressured by AMD technologically, I suspect that the ability of TSM to service AMD and all of these other customers will be the bottleneck that saves Intel from meaningful AMD competition.
Also, Intel's strategy of providing fab services to companies like QCOM, AMZN and others is absolutely the right approach, since fab capacity seems to be the issue here.
Now the main issue that INTC investors have to face is how quickly can Intel execute on bringing their new fab processes into production at decent yields as well as simultaneously building new fab capacity. Thank goodness they now have an engineer in charge, and not a CPA, lawyer or salesman running the firm! Pat just has to execute (not a small task).