INTC - Intel

[CorpRaider]

Why are they spending all of that money on the soccer deal marketing?  I don't like that.

[ItsAValueTrap]

it's hard to dislodge an entrenched competitor (arm) that is not standing still either.

I think Intel should just go ahead and build ARM chips.

 

First of all, it is already building ARM chips.  The wireless portion of its mobile SOCs has an ARM part in there somewhere.  Secondly, just because Intel designs mobile SoCs doesn't mean it has to avoid building competing designs.  Because it isn't building competing SoCs, it has a lot of idle capacity.  In the past few years, Intel has spent a ridiculously scary amount of money on capex (well above historical levels).  Now it has all this extra capacity, no mobile SoC penetration (because its designs are lacking the right wireless capability), and is staring into a declining PC market.  They screwed up.

 

Because of their moat and its highly profitable position, they can handle their screw up.  But shareholders shouldn't put up with Intel management screwing things up further.

 

2- If Intel built 3rd party SoCs, its plants would run at higher capacity and it would have a stake in the mobile market.

 

Intel is primarily a semiconductor manufacturer and its moat lies in manufacturing, not in design.  It should protect its moat and make profits by building 3rd party SoCs.  It will take some time to get their designs working in Intel's fabs, but they should enter into those partnerships.  In my opinion.

 

3- AMD may be in big trouble because Intel decided to overbuild.

[Liberty]

Intel is primarily a semiconductor manufacturer and its moat lies in manufacturing, not in design.  It should protect its moat and make profits by building 3rd party SoCs.  It will take some time to get their designs working in Intel's fabs, but they should enter into those partnerships.  In my opinion.

 

I haven't looked so I could be wrong, but I would imagine that Intel has much better margins on their own stuff. Do they break that up in disclosure?

[Guest valueInv]

it's hard to dislodge an entrenched competitor (arm) that is not standing still either.

I think Intel should just go ahead and build ARM chips.

 

First of all, it is already building ARM chips.  The wireless portion of its mobile SOCs has an ARM part in there somewhere.  Secondly, just because Intel designs mobile SoCs doesn't mean it has to avoid building competing designs.  Because it isn't building competing SoCs, it has a lot of idle capacity.  In the past few years, Intel has spent a ridiculously scary amount of money on capex (well above historical levels).  Now it has all this extra capacity, no mobile SoC penetration (because its designs are lacking the right wireless capability), and is staring into a declining PC market.  They screwed up.

 

Because of their moat and its highly profitable position, they can handle their screw up.  But shareholders shouldn't put up with Intel management screwing things up further.

 

2- If Intel built 3rd party SoCs, its plants would run at higher capacity and it would have a stake in the mobile market.

 

Intel is primarily a semiconductor manufacturer and its moat lies in manufacturing, not in design.  It should protect its moat and make profits by building 3rd party SoCs.  It will take some time to get their designs working in Intel's fabs, but they should enter into those partnerships.  In my opinion.

 

3- AMD may be in big trouble because Intel decided to overbuild.

 

What is the revenue per chip on an ARM SoC vs an Intel x86? What are the margins?

 

How does Intel's pricing power compare in the two markets?

[Guest valueInv]

@valueInv check out the analyst day web casts. They've got some really great stuff lined up. http://intelstudios.edgesuite.net/im/2013/live_im.html

 

@wellmont meh. They have definitely made some missteps in mobile, but they have nowhere to go but up in that market, and the chips they've got coming up really are better than their competitors. And since they own their own fabs they have better margins. Their new CEO is saying and doing all of the right things, like saying they are now a "market driven company" with respect to their mobile initiative, and they are selling off that misguided online tv business (hope John Malone picks that up!). And let's not forget they DOMINATE the other chip markets. Google entering the server chip market just isn't a concern. It will take them forever to get there, and I don't have faith they'll do it well. It feels very "Google Wave" to me. All that said, I think Intel is fairly valued, and I wouldn't buy until they dropped by 50% or so.

 

All I see in the presentations are smoke an mirrors. There is no acknowledgement of the problems they face. They have devoted a big chunk of slides to talk about how the markets they address are growing without talking about their own competitive position.

 

There is one slide comparing their performance with ARM chips but they conveniently leave out comparing battery life.

 

How does their roadmap compare to ARM's? To Samsung, Qualcomm and Apple? Two years down the road, how will the performance/watt/$ compare?

[beerbaron]

So what's going on with their purchase of McAfee a few years ago? I tough new processors with embedded virus protection was the strategy but I hear no news.

 

BeerBaron

[Guest valueInv]

So what's going on with their purchase of McAfee a few years ago? I tough new processors with embedded virus protection was the strategy but I hear no news.

 

BeerBaron

 

They released it but no traction.

 

 

[beerbaron]

So what's going on with their purchase of McAfee a few years ago? I tough new processors with embedded virus protection was the strategy but I hear no news.

 

BeerBaron

 

They released it but no traction.

 

There goes 10 Billions Dollar in the toilet.

[fareastwarriors]

http://www.bloomberg.com/news/2013-12-13/verizon-said-near-agreement-to-buy-intel-s-start-up-tv-service.html

 

Verizon Is Said to Be Near Deal to Buy Intel’s TV Service

[Guest valueInv]

So what's going on with their purchase of McAfee a few years ago? I tough new processors with embedded virus protection was the strategy but I hear no news.

 

BeerBaron

 

They released it but no traction.

 

 

There goes 10 Billions Dollar in the toilet.

 

When you see companies making acquisitions in markets

That are not adjacent to their existing business, it's usually a red flag.

 

Another example is EBay-Skype.

[zippy1]

Their process technology is so good that they can probably build quite powerful mobile chips to replace their own PC chips?  :P

 

So that would mean that they are replacing their own $200(?) chips with $40-$50(?) chips?

 

It seems to be a lose-lose situation, no?

[Guest valueInv]

Their process technology is so good that they can probably build quite powerful mobile chips to replace their own PC chips?  :P

 

So that would mean that they are replacing their own $200(?) chips with $40-$50(?) chips?

 

It seems to be a lose-lose situation, no?

 

That's the part a lot of people are ignoring.

[Jurgis]

This is funny. Zero posts on INTC since 2013...

 

OK, so this is companion post to AMD:

 

INTC:

Positives:

- CPU sales in PC/servers doing well. Still market leader (but not in mobile).

- Mobileye may finally provide a business outside PC/server CPUs where Intel is a leader. If integrated well.

- Altera for custom chips for Bitcoin mining/AI - a stretch likely.

- At forefront with fabs and feature sizes.

- Still pretty cheap.

 

Negatives:

- PC slowdown/downturn may reappear sometime soon again. Remember when INTC/MSFT were "sell at any price, PCs are dead"?

- Intel lost most of mobile area in the past, it's not clear they gonna do better now.

- Bullet above applied to Mobileye.

- No GPU solution for AI/etc.

- Large rather bureaucratic organization. Not clear if leadership is good/great.

 

I looked at INTC from the NVDA (I have some, sold some, very expensive) -> AMD -> INTC chain.

INTC is more attractive than AMD from profitability standpoint and leadership in CPUs, but less attractive from size/past-crappy-performance-in-mobile/no-GPUs.

Probably also skip...

 

Thoughts?

 

[JayGatsby]

I've had a small position for a few years. Things I like are:

1. They have pretty close to 100% of the server market. That market could rise or fall but its still a good market in a monopoly position. Like any good monopoly they don't talk about this a lot ("It's competitive out there!"). With the amount of data being produced I don't see this market disappearing.

2. The PCs are dead meme is now dead. In fact tablets are the ones that are actually dying. PCs will continue to be important for actual work (ie, things other than posting on CoBF  :P). Of all the random parts in a computer, the only one that gets a sticker on the outside is intel. I don't know much about computers, but the "intel inside" is a sign of quality to me.

3. Company is a cannibal. Rough numbers they've reduced their share count 50% since initial IPO and are repurchasing ~10% of shares currently.

 

Not really cheap now though. I was looking at potentially selling it but doesn't seem expensive either.

[Liberty]

Oh boy, this is bad:

 

https://www.theregister.co.uk/2018/01/02/intel_cpu_design_flaw/

[beerbaron]

Oh boy, this is bad:

 

https://www.theregister.co.uk/2018/01/02/intel_cpu_design_flaw/

 

Can we trust this news? Stock price has not moved on this news... this would be big a 30% drop in performance would hurt INTC reputation and accelerate the move toward AMD.

 

BeerBaron

[JayGatsby]

I'm continuously surprised how strong the incumbent is to displace in tech. I just upgraded to a new laptop. It runs Windows 10, which has some bizarre issue with USB devices (my mouse, in particular) that's widely documented by Google searches but not fixed. In general it's worse than Windows 7 in most ways. It seems designed for the Surface but the Surface is only a small % of the overall market. Microsoft has been making products that are incrementally worse than the last one for years. I was hoping Google would give them a run with the chromebooks, but they kind of botched that in my opinion. 

 

Same thing with Apple... I'd take my $300 Moto over a $1000 iPhone any day of the week, but iPhone sales continue to be strong.

 

I think Intel is probably in a similar boat. Having said that, it seems fairly valued now so probably not a bad time for me to sell.

[Liberty]

Oh boy, this is bad:

 

https://www.theregister.co.uk/2018/01/02/intel_cpu_design_flaw/

 

Can we trust this news? Stock price has not moved on this news... this would be big a 30% drop in performance would hurt INTC reputation and accelerate the move toward AMD.

 

BeerBaron

 

[compoundinglife]

Oh boy, this is bad:

 

https://www.theregister.co.uk/2018/01/02/intel_cpu_design_flaw/

 

Can we trust this news? Stock price has not moved on this news... this would be big a 30% drop in performance would hurt INTC reputation and accelerate the move toward AMD.

 

BeerBaron

 

This is in fact a very bad security bug from a technical perspective. AWS and Azure are rebooting all their machines that host customer virtual machines to roll out the patch.  https://www.geekwire.com/2018/cloud-vendors-secretly-scramble-patch-critical-flaw-intel-chips-performance-hits-expected/

 

The fact that Microsoft and Linux kernel are overhauling core parts of their code base to mitigate the issue is telling as well.

 

That being said I don't believe this specific issue will have any long term impact on Intel's earnings or advantage over AMD.

 

[sleepydragon]

I wonder if the fix will only hit the performance at system calls (file open, save, networking transmit etc). If so, performance limit is limited. But if the fix have to by applied at runtime at every memory calls, that will be expensive... not sure.. but usually there is always a software fix for any hardware bugs.

AMd is not going to die anyway. PC manufacturers always want two suppliers.

Might be a catalyst for intel to sell new chips. Customers have to buy now. Lol.

Agree intel is a very slow and fat place. But they can cut 50% of their people but still won't affect their core product line. They shall probably do that.

[pau_]

Tom's Hardware writes Intel CPU Bug Performance Loss Reports Are Premature The headline number of a 30% performance degradation is only in some circumstances.

 

A note of caution: The bug will have an impact on some programs, but the chance of a widespread 30% reduction in performance is slim. Phoronix conducted testing on the patched Linux 4.15-rc6 kernel with an Intel Core i7-6800K and an i7-8700K. It tested applications that are confined to the user space, which are typically indicative of what you would see on a desktop system, and found that these applications "should see minimal change (if any) in performance." That means you will likely see little to no performance impact on your next desktop session, be it gaming or otherwise.

 

The vulnerability appears to be most dangerous to data center workloads and virtualization. However, it is irrational to assume that the overwhelming majority of data centers will see a 30% reduction in performance. Losing even 15% of the computational horsepower from a data center would be a major blow, and that compute would have to be replaced almost immediately. The patch has been in development for several months, so if Intel and the major data center operators were expecting massive performance reductions, there would have been an incredible spike in data center equipment purchases.

 

Interesting question is what workloads are most susceptible and what companies benefit from remediation.

[oddballstocks]

This is a very serious bug.  From the initial performance marks I've seen it's a 30% hit or more on everything.  It does scale with IOPS.

 

We've been discussing the idea of replacing our main DB with a faster box, more cores, more RAM and NVMe for storage.  Right now Epyc is a cheaper platform, and if Intel performance drops 30% this is a no brainer.  Right now I'm 100% on Xeons.

 

In terms of the technical impact (from HN): "

prudhvis 2 hours ago [-]

 

As i understand the problem, this isn't about clockspeed reduction, now it is the software's responsibility to check if the page is a kernel page/user page. So, the impact is significant. So, every time either pages are touched/accessed this check needs to be triggered, which causes it to be much slower. "

 

So yes, EVERY SINGLE PAGE is impacted.

[oddballstocks]

Another more detailed assessment:

 

"The fix is to unmap the kernel entirely when userspace code is running. Because the kernel will no longer be in the page-table, the userspace code can no longer read it. The side-effect of this is that the page-table now needs to be switched every-time you enter the kernel, which also flushes the TLB and means that there will be a lot more TLB misses when executing code, which slows things down a lot."

[sleepydragon]

 

So yes, EVERY SINGLE PAGE is impacted.

 

Yeah, this sounds pretty bad

[mbharadwaj]

Intel's response:

https://newsroom.intel.com/news/intel-responds-to-security-research-findings/

 

and it sounds misleading. the CEO was on CNBC just now and wasn't convincing!

 

Comments on hacker news:

https://news.ycombinator.com/item?id=16064545