Ben Thompson on Intel’s current identity crisis:
In fact, today there are only four major foundries: Samsung, GlobalFoundries, Taiwan Semiconductor Manufacturing Company, and Intel. Only four companies have the capacity to build the chips that are in every mobile device today, and in everything tomorrow.
Massive demand, limited suppliers, huge barriers to entry. It’s a good time to be a manufacturing company. It is, potentially, a good time to be Intel. After all, of those four companies, the most advanced, by a significant margin, is Intel. The only problem is that Intel sees themselves as a design company, come hell or high water.
Good points, but Intel funds that great fab technology with the huge margins they get from also being the chip designers.
Intel faces a similar problem as Nintendo: the mass market is moving away from their high-margin businesses (game consoles, PC-class CPU design), which will make it increasingly difficult to fund their lower-margin businesses that they excel in (game design, chip manufacturing). To continue to capture mass-market success, they’re being pressured to torpedo their cash cows by bringing their formerly exclusive advantages to the mass market (Nintendo bringing their core game franchises to competing platforms, Intel allowing competing chip designers to use its advanced fabs).
Fortunately, Intel always has the high-margin server-CPU business to fall back on (a segment where they dominate both market- and profit-share), even if their profits from mainstream CPUs decline. Nintendo has no such cash cow.