Intel’s bet that went wrong and ended up hurting the Mac (and all PC manufacturers)

In recent years, Intel has hit a wall in the development of its processors. After more than three decades developing new semiconductor manufacturing processes approximately every two years, the Mountain View company is in a hiatus that will last at least five full years.

This is an unprecedented stop in the history of this company, where computer manufacturers are left at the expense of the silicon giant. And that directly affects the entire Mac line in its current state. All because of a bet that went wrong to the silicon giant.

Why the manufacturing process of a processor is important

Intel’s bet that went wrong and ended up hurting the Mac (and all PC manufacturers)
Intel’s bet that went wrong and ended up hurting the Mac (and all PC manufacturers)

Semiconductors are essential in today’s society. Not only are they present in the Mac, but they are also found in many electronic devices, home appliances and wearables . In addition to cars or industrial machinery. In the case of consumer electronics, improving the manufacture of a processor has many advantages:

  • They take up less physical space, a critical aspect in increasingly smaller and lighter devices.
  • They are more powerful and allow you to do more things in less time, opening the horizon of opportunities.
  • They consume less energy, also a vital issue in devices that use a battery.

The current and future software experiences are a consequence of the advance of these processors from the hardware side. In other words, if the screen of a device is like a blank canvas, it is the processor that allows developers and operating systems to paint over it.

An Intel tripping device called 14nm

Integrated circuit manufacturing is the process of creating the processors included in computers , tablets and smartphones, among other electronic devices. It uses different forms of photolithography and chemical processes on a wafer of semiconductor material, usually silicon.

According to the industry standard, “each generation of the semiconductor manufacturing process is measured by the minimum process size, measured in micrometers or nanometers. In other words, each generation is named according to the dimensions used in its manufacturing process (first in micrometers, now in nanometers). In the case of Intel, the evolution of its manufacturing process over the last thirty years has been as follows:

YearProcess nameDimensionsProcessor name1987P648 1.0µm804861989P6500,8µm804861991P6520,6µm80486, P51993P852 0,5µmP51995P8540,35µmP61997P8560,25µmP61998P856. 50,25µmP61999P8580,18µmNetBurst2001P8600,13µmPentium M2003P126290nmPentium M2005P126465nmCore, Modified Pentium M2007P126645nmPenryn, Nehalem2009P126832nmWestmere, Sandy Bridge2011P127022nmIvy Bridge, Haswell2014P127214nmBroadwell, Skylake, Kaby Lake, Coffee Lake2019P127410nmCannon Lake, Icelake, Tigerlake

Looking at this chart, it is clear that Intel has been working hard to introduce a new way of manufacturing processors every two years for over twenty years. Like clockwork . All computer manufacturers, including Apple since its transition to Intel in 2005, could rely on Intel to develop a better manufacturing process every two years. And therefore, they could adjust their future product plans accordingly.

The manufacturing process was developed in alternation with the development of a new architecture , also every two years, in what is known as Intel’s “tick-tock” process: one year there is new manufacturing, the next year new architecture. And so on. Well, that is, until Intel stopped keeping its promises.

If Intel’s forecasts are met, we will see the life of a manufacturing process extended to 5 years, when the normal is 2 years

Between 2011 and 2014, Intel suffered a 1-year delay in delivering the first generation of the 14nm process, mainly because could not find customers to take advantage of it . Processors require large investments in extremely expensive equipment (CapEx), which Intel needs to amortize. And precisely between those years, the PC industry fell in sales for six years.

The economic aspect of the manufacture of processors should not be underestimated. Although it was technically possible to manufacture the 14nm, Intel had no one to sell it to. And without customers, the huge amounts of capital invested were unused. As a result, the company had to reduce its workforce by 5% in 2014.

Fortunately, Intel was able to fill the spare manufacturing capacity with other types of processors and modems. However, the company began to suffer from the symptoms of bad decisions made in the past.

The arrogance of Intel

Ben Bajarin made this statement during the Tech.pinions podcast with Ashraf Eassa, a journalist specializing in the semiconductor industry. Bajarin, who we interviewed at Apple a few months ago, said that warned the company about this bet for not having a plan B in case of failure. “It was the only plan they had”, which he considered irresponsible towards his shareholders.

The competitors they both refer to in their conversation are Samsung, TSMC and Global Foundries. All of them are processors manufacturers. All of them with plans to adopt the manufacturing processes beyond the 10nm that Intel is not yet able to mass deliver:

Intel’s arrogance led him to believe that his competitors would die along the way. In the end, we now know that they have outdone him in reducing the manufacturing process

  • Samsung plans to have 7nm in 2018, 5nm in 2019, 4nm in 2020 and 3nm in 2021.
  • Global Foundries is just getting started with the 7nm but is lacking capacity. That is, it needs to invest in expanding its factories because it can’t keep up.
  • TSMC wants to have the 5nm ready by 2020.

They are all manufacturers of processors for devices other than PCs and Macs, which are caught up in Intel’s decisions. While these manufacturers are already delivering products on the market with the 10nm process (the Galaxy S8, S8 Plus, iPhone 8, iPhone 8 Plus, iPhone X and any smartphone with the Snapdragon 845 among others), Intel continues to struggle with the 14nm and constantly delay the 10nm processors.

It is worth remembering the promises made by Intel and its 10nm manufacturing process. Initially planned for 2015, it was immediately delayed to the beginning of 2017. Later rumors placed it at the beginning of 2018 and then at the end of that year. Subsequently, in April of this year, Intel stated to its shareholders that the 10nm would see the light at the beginning of 2019, and we now know that this date will be the end of 2019.

Not surprisingly, continuous delays have impacted their computer manufacturing customers who can no longer rely on Intel’s infallibility. Among them, of course, are Apple Macs .


Apple, it’s time to jump off a sinking ship

It is true that the Mac has not had its best years lately . The lack of internal updates can be attributed in part to Intel, but Apple is also to blame, as we saw a few days ago with the thermal throttling of the new MacBook Pro 2018 already solved. In addition, users of the platform see how the iPhone receives annual updates and the iPad is also updated at a good pace.

Intel has proven to be a good partner in the trajectory of the Mac. It allowed the Apple Mac to transition from PowerPCs to a modern and efficient architecture, which opened the door to its rebirth as an iconic company. But that was in the past and in technology as in soccer, you can not live on the successes of yesterday.

Intel’s bid to be the only manufacturer capable of reducing processor nodes has gone wrong. Having a vendor of a critical component like the processor with problems is something Apple can’t afford. Nobody talks about the iPhone delays or that their processor will be ready in March next year because everything works like clockwork: Apple designs them and Samsung and TSMC manufacture them.

PC manufacturers are also aware of the risk they are running, so they are exploring Qualcomm’s ARM processors at full speed

The other PC manufacturers know this too. Dell, HP, ACER know it. Microsoft knows it. Everybody knows it. That’s why they are running at full speed to have laptops with a Qualcomm Snapdragon processor running Windows 10 .

So it’s about time Apple stepped up a gear with its transition to Mac with processors designed in-house and cut Intel’s dependency out of the equation. A change that, of course, has many moving parts that also involve the software . There, the Marzipan project is going to be key as well.

Intel as a company will not disappear . Your business is diversifying into data centers and other markets, but it’s the PC business that has a dark future outlook. Apple needs to drop the ballast to make the Mac shine again.

Macs con procesadores ARM, la tercera transición: las Charlas de Apple.

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