Intel - From Inventors of the CPU to Laughing Stock [Part 2]

this video is brought to you by morningbrook hi welcome to another episode of cold fusion last time in our intel mini series we looked at how the company invented the cpu microprocessor in 1971 and by the 2010s were at the top of their game they became the go-to processor company in every consumer desktop product and an unstoppable force or so it seemed in today's episode we'll see how intel's size became a hindrance and how behind the scenes they were trying to kill competition with bribes and monopolistic tactics let's take a look despite its brilliant start and massive size in recent years intel has seen bureaucracy and brain drain vital executives have left and accountants and business majors became major decision makers but i can tell you in silicon valley i came here in 1970 until was exactly two years old uh the very first year working at stanford and my ph.d in integrated electronics i met neuse and moore and they began a recruiting process i wanted to know what i was going to work on that was going to change the world and now we've got a ceo there talking about which parts he's going to chop off and sell and we've got you know the buzzards flying around talking about you know strategic options and stuff like that not okay something's got to change well what needs to change well they need a new ceo the ceo needs to be technical if you look at advanced micro devices for example uh they've caught up tremendously on on intel in intel's area and their ceo is a phd and also a good ceo so you've got to get somebody disrespected by the technical community for sure according to the employer rating agency glassdoor only 84 of the firm's workers recommend the company and 85 of them recommend the ceo meanwhile at amd and nvidia 99 of employees recommend their ceos intel insiders have noted the extensive use of cheap foreign contractors whose working visas are used to hold them to ransom these foreign workers are only assigned specific tasks and can't stray from it a far cry from the free experimentation that robert noyce encouraged back in episode 1. to make things worse intel spends 13 billion dollars in research and development meanwhile nvidia spends 3 billion and amd under the leadership of dr lisa spends just 1.8 billion and for all of that spending that intel does they don't have much to show for themselves in fact as you'll later see the company has been embroiled in scandals and anti-competitive behaviour events that have been largely missed by the public eye we'll get to the juicy details of intel's dirty tactics in the second half of this episode but before we get to all of that let's take a look at how intel lost the mobile market as we saw in a cold fusion episode about apple's arm-based m1 chip intel missed the boat on the mobile revolution the company had the opportunity to make chips for apple's upcoming iphone but then ceo paul ottalini just didn't see it as a profitable venture in the end intel passed on the opportunity leaving the door wide open for arm-based designs but this wasn't the full story contrary to popular belief intel wasn't caught completely off guard by the rise of smartphones and mobile devices they saw arm-based chips coming and decided to get in on the action as far back as 2002 they used arm-based designs in what they called the intel x scale processor series but due to poor sales and bad management the project was abandoned and sold off in 2006 before any real success but they kept trying and by 2014 intel was losing a billion dollars per quarter in failed mobile endeavours [Music] next the firm would throw four billion dollars per year at tablet manufacturers and this was to encourage them to use intel cpus it kind of worked but as soon as intel stopped paying the tablet manufacturers would switch back to armbase chips by 2016 intel just gave up on the mobile market with over 10 billion dollars being lost in trying out of all the semiconductor giants intel is in a unique position they're the only ones that own and operate chip manufacturing plants this vertical integration means that intel employees not only have to design the chips but also have to figure out how to manufacture them all the way down to the transistors at the nanometer level admittedly it's not an easy job the thing is none of intel's competitors do this not amd or nvidia instead they use companies such as taiwan semiconductor manufacturing company known as tsmc global foundries or samsung to produce their chips for the longest time for intel making their own ships in-house was seen as an advantage but recently they just haven't been able to keep up to understand exactly what intel is struggling with we have to talk a little bit about how cpu chips are made [Music] modern cpus are made using photolithography where an image of a cpu is etched onto a piece of silicon the exact method of how this is done is usually referred to as the process node and is measured by how small a manufacturer can make the transistors as a rule of thumb the smaller the transistors the better as transistors get tinier and more tightly packed electrons don't have to physically travel as far when moving between them this saves both calculating time and energy smaller transistors also mean that calculations can be done without getting too hot and that's usually a limiting factor in cpu performance so for example with 7 nanometer transistors compared to 14 nanometers you can get 25 more performance under the same power it almost seems like magic but that's how it works there's a bit more to the story in terms of how you classify node sizes but overall that's the basic concept [Music] so the problems for intel all started on september 5th 2014. that's the day that intel introduced their fifth generation core chips these were supposed to be monumental the company's first processors using a 14 nanometer manufacturing process intel was at the cutting edge while amd remained stuck on the 28 nanometer process intel wasn't going to sit still their original plans had road maps for 10 nanometers to launch in 2016 with even more advanced seven nanometer chips launching in 2018 but from here things slowly went wrong to reach the 10 nanometer stage intel tried to use exotic technology to aggressively increase their chip density but it backfired and majorly the technical issues in solving this saw seven years of delays and to this day intel's current 10th gen core desktop processors remain on a heavily optimized but still 14 nanometer process and all of these delays opened the door for its competitors [Music] on the other side of the fence for amd after some setbacks and with the help of tsmc amd struck back big time with their new horizon chair processors in 2017 it featured up to 16 cores on a 14 nanometer process it was a monster that slaughtered intel in multi-threaded tasks and overall value but it still lagged behind in gaming and single thread performance but in 2018 the second generation ryzen chip from amd improved both performance and price in 2019 with intel still stuck on 14 nanometers amd took the technological lead with its 3rd gen ryzen cpus now being built on an advanced 7 nanometer process but there's a few intricacies going on behind the scenes intel was still hanging in there they had been fine-tuning the performance of their 14 nanometer processors and had greatly enhanced integrated graphics but many technological commentators saw all of this as a technical failing on intel's behalf as it stands intel's unreleased and upcoming 11th gen seems like it's about four percent faster than amd and gaming despite still being 14 nanometer however in multi-threaded workloads like content creation amd is offering better value with more cores and threads for the money and it could just be a matter of time before intel was overtaken even in gaming and this isn't going over silently consumers have been noticing intel slips intel not only pushed back 10 nanometer chips to the end of 2021 in freaking 2021 they also moved seven nanometer production to a much later date 2022 or beyond you know that even after slashing your prices as much as 50 on your rehashed hardware you've still got nothing and you'll grasp at any desperate strategy to avoid any direct comparisons against your competitor's product with this plan to launch first by a matter of hours why so that the launch day reviews which tend to get referenced by buyers over the entire product lifecycle couldn't contain direct comparisons to something you were afraid was going to be better you are a weasel and you are a chicken you seek to misrepresent the strength of your products to consumers weasel and you seek to duck away from a fight rather than take the criticism that you know you deserve chicken uh nothing special another ryzen 1600 i'm gonna just i'm gonna have to do like the intel edition just to see if anyone's still running intel systems these days oh my god they're all rising intel's dead now aren't they wow if this doesn't just tell you how much momentum amd has amd's success is all thanks to the chip manufacturing company tsmc who ramped up their seven nanometer process extremely fast this is something that intel simply couldn't compete with in-house and tsmc isn't sitting still they're planning to move to five nanometers this year if this allows amd to get to five nanometers in their desktop chips before intel hits 10 nanometers intel may be in trouble remember intel was supposed to have 10 nanometers back in 2015. and to make things worse the upcoming 4th gen ryzen chips from amd are using a 5 nanometer process and is said to be 40 faster in overall performance you've had big problems with 10 nanometer now with seven who and what at intel is responsible for this string of problems well i mean ultimately um i'm i'm responsible before we continue let's take a look at some intel news brought to you by today's sponsor morningbrew despite all their problems intel brought in record sales due to the pandemic more people working from home meant more people buying laptops with intel chips in them the interesting thing about this was that intel was forced to reveal their sales numbers early after they had been hacked intel's problems are getting so severe that investors such as third point are calling for intel to split up its design and manufacturing operations if you want more stories like this one and are interested in science technology and business morning brew is a great way to catch up on all the latest news if you're short on time it pulls together quality news sources all in one place without you having to put in the effort it's delivered straight to your email inbox each weekday and saturday and it's free it takes just 5 seconds to sign up so click the link in the description below to get started amd has gained market share for 10 straight quarters breaking 20 desktop market share for the first time since 2013. amd's ryzen desktop cpus has remained on top of amazon's cpu bestseller list for years now according to ceo lisa in 2020 ryzen cpus were topping the retailer best seller list and have more than 50 share of premium processor sales at many top global retailers there's no denying that amd is at their best and in saying this amd has been a thorn in the side of intel for the better part of four decades a thorn that intel has been trying to remove as you saw in the last episode of this series amd began life licensing intel's designs as a secondary source supplier if you remember intel had to do this as a chip manufacturer because building chips back then was seen as unreliable and companies wanted the confidence that they could receive a chip if there was an issue with one supplier the bickering between the two companies began in the early 1980s even though intel had signed a partnership with amd they decided to break the agreement internally by refusing to exchange the designs in intellectual property with amd this would result in a long legal dispute that went to the california supreme court the court found that intel violated amd's rights intel was also accused of obstruction of justice during the trial they repeatedly stalled and gave useless information by this stage intel had taken the lead by hampering amd's progress in 1996 amd was forced to make their own processes from the ground up called the athlon series these new amd cpus ended up being faster than intel's pentium 3 and much faster than intel's pentium 4. over the coming years intel became nervous and needed to protect their product sales at all costs in the early 2000s intel would offer money to japanese companies such as nec fujitsu toshiba sony and hitachi as well as german retailers this bribe money was so that these companies would not use amd parts and sell intel-based laptops and cpus instead amd sued intel for antitrust intel's response it was amd's fault that they were failures in the marketplace in 2004 the offices of intel's japanese subsidiary was raided during an investigation intel was ruled to have violated anti-trust laws in 2005. the next year the intel offices in korea were raided for the same reason intel had also violated antitrust laws there too next intel german officers would be raided in 2008 same reason starting to see a pattern intel's many international bribes to companies to shut out amd processors from the market would be uncovered and they would be fined over a billion dollars for it it got worse though in 2009 even companies like dell hp nec and lenovo were all involved in intel's bribes in the legal filings it was stated that consumers even asked for cheaper and better performing amd chips but dell refused dell wanted to keep receiving money from intel which was making up 104 percent of their quarterly income at one stage another anti-trust lawsuit was filed by the district of new york in 2009 it revealed six billion dollars in quarterly payments from intel to dell from 2001 to 2006. in 2010 intel was caught faking benchmarks by using custom code that could detect which cpu the benchmark was running on benchmarks are seen by consumers as an easy way to determine which products have better performance if this particular benchmark saw that it was running on an intel cpu it would run a highly optimized code if it saw something else it would run the slowest version of the code it could find this mislead consumers and manufacturers alike and intel were prosecuted by the ftc over this and it just kept going in 2018 with the launch of the amd ryzen threadripper a monster 32 core cpu intel had to think of something so their marketing team went into overdrive intel would retaliate against amd by demonstrating the power of their 5 gigahertz 28 core processor it looked awesome in benchmarks but there was only one issue intel would later claim that they somehow forgot to mention that this demo chip was overclocked and required a 1 700 watt industrial freezer to keep it from overheating as demonstrated the performance that intel was showing off didn't exist in any chip they currently had in 2019 with the launch of their core i9 9900k the benchmark showed a massive performance advantage over amd the only problem some of these benchmarks were sponsored by intel and as it turned out through software the intel sponsored benchmarks disabled the number of cores of amd chips by half intel would go on to fabricate many benchmarks throughout the year and you can check out the channel adored tv if you want a detailed overview of intel's bad practices to me it's really amazing that intel has been operating like this for decades but most people just aren't aware they struggled with innovation so they settled for dirty tactics there was a time at intel where we the people used to joke that they kept advanced micro alive in order to make it so the justice department didn't force them to break up they literally kept it alive well they don't keep it alive anymore they have caught and passed intel when it comes to those key growth areas in 2018 and 2019 intel struggled with hardware security vulnerabilities one of which affected all of intel's cpus since 1995 and is impossible to completely fix during the ordeal the company offered to pay security researchers 80 000 as a reward if they could downplay the severity of the vulnerabilities in one case intel knew about a backdoor vulnerability that affected all of their cpus and didn't fix it for 10 years until a hacker leaked some information on it when microsoft a name synonymous with intel decides to build their own chips you know something is wrong after apple shocked the industry with the m1 chip microsoft announced that they would be using arm technology to build their own chips they already use arm-based snapdragon chips and some of their surface line computers but these can't hold a candle to the m1 so microsoft is getting serious and building something by themselves if this chip is competitive and low power this would be yet another blow to intel and on another point mac os is about 10 of the total pc market so losing this plus ever more market share to amd is definitely going to hurt intel on the topic of intel struggling with their manufacturing process to try and get to 10 nanometers in july of 2020 then ceo bob swann stated that if more things go wrong for intel they may use a third party like samsung or tsmc swann would be fired in early 2021 but intel would still go through with the plan stating that for their seven nanometer process intel would outsource manufacturing of these chips for products starting in 2023 and this is actually a bright spot for intel a key point in this entire story this decision may actually be the best thing for the company in many years swallowing their pride and admitting that they just couldn't hold their position in chip manufacturing is definitely a turning point for intel the semiconductor industry is inherently risky companies must bank on the fact that these technologies have to work they have to be well planned to beat out the competition but as intel found out when things go wrong they can go very wrong intel tried to both manufacture and design their own chips but they couldn't keep up with global foundries in the us or the korean or taiwanese companies but don't get me wrong financially intel is doing very well their desktop market is still solid and they have a huge legacy and they're making a bunch of money hand over fist intel aren't going away tomorrow but consumers are starting to be unsatisfied and the recent turn of events in the past three years was a wake-up call for intel firing ceos from accounting backgrounds like bob swan and many previous ceos and finally putting an engineer in charge as well as swallowing their pride when it comes to manufacturing could see a major turnaround and it must be said in the grand scheme of things all of this is not easy to do in any cpu there's billions of transistors nanometers in size and every single one of them has to be perfect it's incredible that we can achieve such amazing feats of engineering in the first place the dna of intel has clearly changed since their inception but that's expected after 50 years so what do you think is next for the company do you think they'll be back to the darlings of the semiconductor industry in a few years or will they be the next ibm feel free to discuss below so i want to thank you for watching the whole way through this episode i really appreciate it if you did enjoy it feel free to subscribe to cold fusion i also recently went on the tech society podcast if you're interested so i'll leave a link below to that as well my name is dagogo and you've been watching cold fusion and i'll catch you again soon for the next episode cheers guys have a good one [Applause] it's me thinking [Music] right

Channel: ColdFusion

Views: 1,085,814

Keywords: Coldfusion, TV, Dagogo, Altraide, Technology, Apple, Google, Samsung, Facebook, Tesla

Id: LoTx9LQIKEA

Length: 22min 8sec (1328 seconds)

Published: Mon Feb 22 2021

Reddit Comments

[u/SmegmaFelchingMods]

Yeah I watched it, some great points are made, but I’m going to reserve judgement for calling Intel a laughing stock until I see that their chips aren’t still powering 70%+ of PCs/laptops on the market.

[u/ntbananas]

This is silly. It's a $250 billion market cap company that powers the vast majority of computers in the US (maybe western world?)

Some of the stuff this video does is ridiculous, e.g. using Glassdoor statistics as a metric of whether or not to replace the CEO is silly.... esp. because its an 84% approval per the video itself.

Anti-competitive behavior, "dirty tactics", etc.... I mean, okay, that may not be the most ethical thing but that's hardly a strike against them in terms of being a "laughing stock"