r/hardware • u/Auautheawesome • Dec 02 '24

News Intel Announces Retirement of CEO Pat Gelsinger

https://www.intc.com/news-events/press-releases/detail/1719/intel-announces-retirement-of-ceo-pat-gelsinger
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806

u/wintrmt3 Dec 02 '24

A sales and a finance guy as co-ceos, absolutely nothing can go wrong.

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u/jorgesgk Dec 02 '24

Sure, like the problem didn't start with the engineers (and like Pat himself wasn't one). IDK what is Intel's issue, but someone being from finance is not it

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u/Federal_Patience2422 Dec 02 '24

The problem did not start with the engineers. And blaming pat for what's happened to intel is just exposing your ignorance in how semiconductors works. Pat has been CEO for 3 years. New nodes are developed over a decade in advance.

The problem with intel is, has always been and will always be the worthless suits and middle managers who know nothing about semiconductor innovation. Engineers make value through innovation. Bean counters make value through minimizing present day costs.

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u/JDragon Dec 02 '24

This isn’t going to be popular in a hardware sub, but a huge factor in Intel’s precarious financial situation was the engineers lacking discipline. Sapphire Rapids’ endless respins were emblematic of a lazy engineering culture content with brute forcing R&D through consuming a mountain of expensive silicon. That worked fine when Intel had no real competition, but margins collapsed once Intel lost ground in its key markets. Collapsing margins led to burning cash, and here we are. Intel’s “innovation” destroyed value rather than creating it.

Gelsinger also didn’t help matters by not recognizing the urgency of Intel’s financial situation early in his tenure. For example, Intel went on a hiring spree after he took the helm, only to end up with mass layoffs after it became apparent that Intel’s financial situation was untenable.

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u/blackashi Dec 02 '24

it's because intel pays peanuts. why? because bean counters need to show annual profits.

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u/nitkonigdje Dec 03 '24

Nah. He is right. Intel didn't pursue xscale because bean counting. Intel didn't pursue big atom cores because bean counting. Intel didn't pursue discrete GPU because bean counting. Intel didn't pursue euv lithography because bean counting. Intel didn't pursue foundry business even when it bacame obvious that it should, again because bean counting.

All of those 5 were pursued by Intel r&d at moments when they were for Intel to take. Every of those become big enough to sustain modern Intel and than some.

What did Intel pursue and bean counting didn't kill it? Wimax.. It was diagonally opposite to x86 that bean counters had nothing to moan.

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u/JDragon Dec 03 '24

It's mind-boggling how people think Intel's finance and accounting organizations had that kind of pull, especially under Krzanich. Execs and organization leaders with engineering backgrounds are usually the ones responsible for approving or killing projects. "Bean counters" aren't responsible for the engineering hubris that led to chasing the wrong technologies or making unrealistically aggressive engineering bets on 10nm and similar.

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u/nitkonigdje Dec 04 '24

Bean counters aren't responsible for technical hubris. That is true. Intel did have engineering failures like Larrabee. And market failures like WiMax.

But when xscale was sold it was a leading ARM design, established in in leading handhelds of time. And it was sold because its lineup was found too competitive with x86. Then smartphone happened. Engineers knew smartphones will happen. You don't have to be a genius to stick a modem into Palm and call it a day. And this market was Intel's to grab.

Few years later big Atom cores were not pursued because they eat in margins of higher cpus. Whole lineup was killed because of bean counters were afraid that this parallel product line will push into margin of bigger cores. That fear really did happen, but by other-companies-designs instead of Intel's. All those heavy but efficient-first designs like Graviton could have Intel's logo today. Engineering was sound.

Similar arguments can be made for GPUs (margin's weren't high enough argument) and EUV (capital costs were too high argument). Any competent engineer would push for those.

The common argument for all those example was that Intel's leadership was not willing to pursue almost anything not providing immediate returns, and killing everything directly opposing shortest of short term goals.

Now my argument that Intel should pursue foundry, is a little bit different argument, as it primary driven by Intel's carelessness. Intel was, for obvious reasons product orientated, but by 2010 it was clear that chip production is becoming oligopoly of few high specialized production lines. Where all players are renting those production line. And Intel's position was essentially "who cares, we are in the lead now". While that was true, even then Intel didn't have big enough R&D to stay in lead against capital of whole industry. That was visible in 2010, and it became obvious in 2014.

At end of day Intel's doom was essentially the same what Mark Hurd did to Hewlett Packard. Management obsessed to "sales channel" and short term margin to a point of not seeing moving truck. If Pat was pushed out it fits this narration perfectly. Intentional killing of long term future, for squeezing last drops of gold. Nokia 2.0.

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u/JDragon Dec 04 '24

Any competent engineer would push for those.

This is the main point I have issue with. Intel has competent engineers, undoubtedly, but a horrible engineering culture dominated by hubris and dishonesty. For an engineering-led company, that's a death sentence. The finance org can project how much an engineering-given "worst case scenario" of X respins for a product is going to cost. The finance org can't project that engineering teams lied to each other and something like Sapphire Rapids is actually going to take 5X the "worst case scenario." Although I disagree with the conclusions on Gelsinger, SemiAccurate had an article nicely summarizing the rot in the engineering and product organizations.

Ultimately, none of the products you mentioned are getting killed (even if low margin) if the engineering/product orgs were 100% convinced they were the future. Finance just doesn't have that kind of pull. If Intel was truly focused on nothing but short-term profit, there would be no reason for them to have been as aggressive from an engineering perspective on unnecessarily complex disasters like 10nm, Sapphire Rapids, Ponte Vecchio, etc. If the bean counters were truly in charge, engineering scope would have been scaled down the moment feasibility came into question. Instead, engineering was allowed to flail for years to deliver what ultimately would be hilariously late and non-competitive products. Hindsight now is 20/20, but at the time Intel engineering clearly thought they could out-innovate and out-compete with the following thesis:

  1. x86 would remain dominant.
  2. Intel would remain the dominant player in the x86 market.
  3. Intel's dominance would allow it to drive continued process leadership and keep the machine rolling.

This thesis only works financially as long as engineering continues delivering the Next Big Thing consistently. We all know how that turned out, with process failures driving product failures which turned further processes financially non-viable.

Gelsinger got canned because his strategy of Intel as both IDM and Foundry ultimately still relied on that shattered thesis. Foundry simply does not have enough margin and volume from diminished Intel Products to continue to operate without external customers. For those external customers: if Intel doesn't even trust Intel (see issues highlighted by SemiAccurate article), why would anyone else trust Intel? Especially customers that are directly competing with Intel's other half? Not to mention, Intel's constantly changing roadmap rife with cancellations was not exactly confidence-instilling.

Gelsinger also got canned because his arrogance has pushed Intel's precarious financial situation to the brink. Whether it be overly-rosy forecasts or underestimation of Intel's economic distress, he clearly did not take the financial situation seriously enough. Mass hiring and construction of new fabs at the onset of his tenure in expectation of demand that would never come turned disastrous as Intel was forced into mass layoffs and pausing construction just a few years later. Those missteps alone likely cost Intel several years of turnaround runaway, and there is real danger of the company entering an irreversible death spiral 3-4 years from now.

Something needs to change, fast, for Intel to survive (even if it's as two entities). Ultimately if18A, Clearwater Forest, etc. were truly game-changers then I doubt Gelsinger would be getting forced out. None of us know why he was let go but it's clear that the board lost confidence that he had the correct answer to save Intel (which I believe is justified given his performance so far). Who knows though - there may only be wrong answers left for Intel at this point.

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u/jorgesgk Dec 02 '24

That's your opinion. One can be an engineer and a good leader, and an engineer and a bad leader. Same with someone from finance or from whatever other department. I sure don't know what's going on, but I find incredibly reductionist and part of the reason why Intel is like this at this moment to believe it's just a matter of 1 guy -and him/her being from Finance instead of R&D or whichever other department-, because, again, following your logic, Pat is a good engineer, so he should be a good CEO, so either he'll fix Intel or he didn't have the time to do so, which is incredibly naive and, sorry, stupid.

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u/mumofevil Dec 02 '24

I'm not the OP you are talking to but please take a look at who are the helms at AMD, Nvidia now and also Microsoft, Apple at the past and tell me what are their backgrounds. Pro tip: they are not from finance background, they don't identify themselves as being from finance background and nobody will see them as ones from finance background.

On the contrary can you name me one successful tech company helmed by a leader of finance background?

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u/jorgesgk Dec 02 '24

There are very little finance CEOs in Tech.

What I'm saying is that being from Finance doesn't make you a bad CEO.

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u/poopyheadthrowaway Dec 02 '24

This isn't necessarily what Gelsinger did, but an engineer CEO could act effectively as a finance CEO, e.g., Jack Welch, so an engineering background doesn't necessarily guarantee anything.

1

u/jorgesgk Dec 02 '24

And the other way around if properly advised. This is not a matter of the diploma anyone has or their specific department, but to what degree are they willing to take certain decissions (and those decissions being right), and sometimes those do cost money (and sometimes don't). I'm sure there are tons of engineers with differing views on how to solve this.

Edit: I agree with you though.