US may invest in Intel, but does it solve the problems there?
Steinberg says Apple Silicon is twice as fast as Intel with its Dorico Pro software
While it is almost understandable on national security grounds for the US government to invest in Intel, it doesn’t solve the inherent challenges the company faces as its profitability decreases, and tech fails to make the mark.
Extending the spiral
Intel’s extended descent will feed into its own doom spiral, with business leaders already searching for alternatives to its chips to protect their enterprise against the downward arc.
Intel has lost the AI market to Nvidia, PC market to AMD, and Apple’s business to TSMC. Nvidia is growing as Intel shrinks, but even then it lags Apple supplier, TSMC, which is at least a year ahead with processor design.
In part that’s because Apple is its biggest customer and has been for decades. That gives Apple and Intel the incentive and financial ability to invest deeply in Apple Silicon – and Apple gets first access to all the new processors as they are made, giving it an advantage in the PC and smartphone markets.
In its attempt to catchup, Intel acquired some of TSMC’s suppliers, but even that access didn’t give it everything it needs to catch up to TSMC, or to Nvidia.
The fear factor
That makes it hard for IT purchasers to justify purchasing Intel-powered PCs, which, in combination with the forced Windows 10 upgrade, means Apple is about to enjoy a glorious harvest as PC users migrate to Mac.
In part, Apple’s success is because it does it better. As Steve Jobs once said, “Own and control the core technologies in your products, or someday someone will come and hand you your hat.” This insight is what drove Apple to invest in its own chip design in the first place.
As is usual, competitors are following in its footsteps with vertical integration, taking more and more control over the inherent technologies behind their products.
Ch-ch-ch-changes
If there is to be life to Intel it will likely in part be based on becoming a foundry for the manufacture of third-party processor designs, like TSMC. But all the US government investment will do for the company is keep it ticking over for a little longer, unless it finds some way to revive its foundry business – currently beset by quality problems — assuming its weak product road map fails to improve. In the end, unless Intel brings in its own Steve Jobs equivalent to turn the company around, the government investment may yet turn out to be little more than very expensive life support.
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