Replies to post #142644 on Intel Corp (INTC)

[Tim May]

Chipguy, what do you think the implications of IBM selling its fabs to Global Foundries will be? (Technically, _paying_ GloFo to take them.)

I think this is closely-related to the low volume issue. IBM can use a foundry (GloFo, or perhaps TSMC or Samsung) because the volumes are so low. But this also means they are further from the leading edge in terms of design/process integration and pricing. (Speculating, a foundry is probably not very willing to devote a huge amount of time by its engineers to work with a low-volume customer UNLESS that customer is paying a big $$$ premium. So IBM's Power chips likely would cost even more to IBM than they did until recently.)

And the low-volume thing has historically meant a growing gap...even in the early days of computers. For instance, bipolar ICs, including ECL, were being supported by large supercomputers. Probably some vendors (Fairchild, National, TI,...) stayed in that business longer than they should've, as MOS and then CMOS was about to overtake them. (cf. the Lawrence Livermore report, "Attack of the Killer Micros," which accurately forecast that CMOS micros would eventually take over minicomputers, mini-supers, and even supercomputers.)

I recall a nice report from Nick Tredennick in an issue of "The Microprocessor Report," circa the mid-90s, where Nick compared Intel's x86 production to competitors like the DEC Alpha, MIPS, IBM/Motorola/Apple PowerPC, others. (Since I don't have the report handy and am not sure of the exact year, these products may not be exactly what he was comparing to Intel's.)

For the sake of argument, let's just call it "RISC" that he was comparing to Intel's.

His pithy synopsis was "Intel makes more of its processors before *lunch* than RISC ships in an entire year."

Of course, some foundry business works out extremely well. The ARM ecology benefits from huge volumes and therefore tight integration for SoCs. TSMC and Samsung are obviously eager to work closely with Qualcomm, Apple, and others. For a dramatically smaller volume of Power chips, perhaps not so much.

I'd be interested in your thoughts on this.

--Tim