I think Intel drank their own Kool-Aid. They lost their lead in their most important product line (CPUs) and took far too long to recognize that problem. They moved away from their sound engineering principles.
The problem with foundries is that in poor economic times, you’re paying too much to keep them afloat when you can’t sell all you can make. The problem with fabless is that in good economic times you are unlikely to make enough to fully take advantage of opportunities.
I don’t think Intel will stay behind AMD forever. Their R&D budget says they will catch AMD at some point. But bad economic times plus inferior products will make the next year or two likely the most painful in Intel’s history. Without all the information Gelsinger has on their reality, but also none of the pressures Intel faces from stockholders, their board, and the world, I think it’s time to close some fabs and take the downturn as a time to catch up to TSMC in process by upgrading those fabs. Yes, it will be very expensive not to get full amortization out of their existing machinery. But to me they are behind in process and in architecture, and process is the easier problem to manage. My assumption is that since Gelsinger became CEO they have got real architecture improvements in the pipeline, and despite their marketing fluff, those products won’t be arriving until 1-3 years off.
If there is real uncertainty about those products actually passing wherever AMD will be, then close some fabs (without upgrades) just to reduce costs will free up money for multiple parallel development teams. If Intel is not at least competitive in architecture, they are doomed. The problem with this approach is that it will cost a lot more to finally rebuild production once they have competitive products.
I don’t think Intel will benefit from spinning off their fabs. They have too many and they are behind TSMC in process. The logical move would be to sell them to TSMC, which will give TSMC even more non-Taiwan capability to survive. But I expect antitrust would not approve that spinoff.
As always in this industry, if you can accurately forecast demand for your products, you can make a lot of money. As time goes on, it looks more like we’ll manage a soft landing instead of a deep recession. But with the Fed split between larger and smaller interest hikes, forecasting accurately seems difficult.
I do not believe Intel will be able to maintain their dividend for all of the time between now and when the new products arrive. The CHIPS act will certainly help Intel, and if money from it will allow them to upgrade existing fabs instead of building new ones, even better. But politics will be a problem if Intel is closing fabs and losing jobs while taking CHIPS money to build new fabs. I’d sure like Gelsinger’s salary and stock options, but I believe in the short run, whatever he does is going to cause headaches.
Maybe I should just have written “I dunno” and saved myself a lot of typing '