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Intel's post-PC plan to take a short-term hit

Posted: 21 Apr 2016 ?? ?Print Version ?Bookmark and Share

Keywords:job cuts? PC industry? chipmaker?

Most of Intel's 9.5 billion capex will come toward the end of this year, focused on gear for first production capability [of 10nm chips]" and to ramp 3D NAND flash memory in Intel's Dalian, China fab, said Stacey Smith, Intel's CFO who will take on management of the company's sales, manufacturing and operations after finding a replacement.

"Those two items!10nm and Dalian!neither are impacted by the restructuring, so we haven't let our foot off the gas one bit," Smith told Wall Street analysts on a quarterly conference call.

"This doesn't have any effect on our [already slowed] technology cadence," said Krzanich. "We are always striving to get back to two years [between nodes] but the timing for 10nm is more like two-and-a-half years!we have not talked about 7nm in part because its more in definition," Krzanich said, noting as much as three years passed between some prior nodes.

"Over time we are looking at Moore's law leadership over the competition as most important because as these nodes get harder, they get harder for everybody so you want leadership over the competition," he said.

Intel CEO

Figure 3: Intel's CEO Brian Krzanich

The company has not yet decided where it will make product cuts. "Murthy is doing a complete review of all of our products and will report back to me in the near future and give me a proposal," Krzanich said.

Intel aims to focus on the fastest growing PC products. They will include tablet/notebook hybrids, thin-and-light notebooks, set-top boxes and high-end gaming systems "We have very innovative systems in design now, coming later this year, but we will try to be more efficient and not work across all PC form factors and markets," he said,

Making cuts may not be so easy, said Gwennap.

"They are kind of stuck, they can't get out of even parts of the PC market because they are the main [processor] supplier, he said. "I guess they won't do much new for segments that aren't growing, so people may get stuck with older processors that get upgraded less often," Gwennap added.

Intel saw its tablet volumes fall 44% in the first quarter, presumably after it stopped offering steep discounts to win market share. Other cuts in the mobile group are expected.

"They said they were going to sell 40 million tablet processors, so they subsidised products to grease that number!they were literally giving these things away," said Gwennap. "They still don't have any marquee wins in smartphones and the tablet business is falling apart!that's one area they could get out of," he added.


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