Intel Delays Opening Fab Plant in Arizona
The new chip factory will be used for future technologies instead.
Is it a sign of the times? Intel Corp has reportedly put on hold the opening of a new chip manufacturing plant, "Fab 42," at its site in Chandler, Arizona. The facility, which was slated to allow Intel to create transistors using a 14 nanometer process, will remain closed for the foreseeable future. Other factories at the site will be upgraded instead.
The company said in 2011 that the Fab 42 project would cost an investment of over $5 billion USD. This is the very plant that President Barack Obama once held up as an example of U.S. manufacturing potential during his 2012 re-election campaign. Now the plant remains empty.
"The new construction is going to be left vacant for now and it will be targeted at future technologies," Intel spokesman Chuck Mulloy told Reuters. He informed PC World in an email that "we've been headed down this path for some time," and that construction of Fab 42 was completed on schedule.
Mulloy also told PC World that Intel will still deploy 14-nanometer technology in Arizona, but will do so in the existing Fab space at the site rather than use the new facility. As previously stated, the new space will be set aside for new technology, whatever that will be, as there's nothing in the new space save for heating and air conditioning; there are no manufacturing tools to be found.
"By running both 14 and 22 nm processes at the same time we get better utilization of our equipment," he said.
The news arrives after the IDC said that PC shipments took a 5.6 percent dive in the fourth quarter of 2013, with only 82.2 million units sold. For the full year, unit shipments declined 10 percent from 2012, a record drop due to changes in mobility and personal computing. Commercial purchases helped prevent a larger decline while the consumer side remained weak.

No, I think this is due to fabs not running at full capacity already (many posts around the web saying LOW capacity). They were building like they would own a portion of the mobile market, but instead chromebooks have taken 21% of their notebooks, and they have NONE of mobile. So fabs you already had are running low and no point in expanding to something that would just sit idle until you get 10%+ of the mobile market. Also chromebooks steal many parts from Intel (no cpu, chipset, boards many times, nics, etc). Intel has to push HARDER, they just can't without costing tons and having empty fabs.
http://intelstudios.edgesuite.net/im/2013/pdf/2013_IM_Smith.pdf
Intel says already 80% on current fabs from recent analyst meeting, and nothing new to fab until they get something in phones. You can't fab more cpu's to a shrinking market, you'll just end up writing them down later. They could delay tech and sell current gen longer but that won't start ARM's 64bit assault on your market despite AMD being weak. AMD doesn't count in the race now, it's Intel vs. the ARM-ada.
The lack of production is why they are now going to product a few arm chips (of course ones that don't compete with them directly, not SOCS for phones/tablets etc I mean...they are other things).
Phones/tablets really took off 2011-2013 and they haven't hit 90% utilization since. So why do anything with the new fab? You can't fill the old ones as well as you used to, so just convert those to newer tech instead right (450 wafers will just make this all worse, as even more chips pop out of the same places if upgraded)? Makes sense. GM down 5% since the ARM war got ramped also. You can see AMD's 1999-2003 effect also when margins tanked last time by 14%
They seem to think they can increase the dividend, but I submit they can't afford the current one for more than a few more years (4-5), and when that day comes they have to lower it? BAM, down goes the stock price as investors get the fear of god in them...LOL. Running operations gets a lot tougher with all the things this hurts. Then everyone loses faith and more exit causing something like an AMD market value drop from ~8B to 3B.
Wintel is in trouble (which also means AMD since not on ARM yet and not for a while), I'm not the only one saying it:
http://www.thestreet.com/story/12234355/1/pieces-are-in-place-for-microsofts-death.html?cm_ven_int=obinsite
I'm not seeing death yet, but I can see both going to half their value easily in 5-10yrs (I'd maybe say 3-5 actually, but hedge my bet with 5-10...LOL). Hope that makes sense. Message seems clear me, the big picture says anyone not in ARM/Android is going to have problems. Intel obviously bleeds less than MS over this war.
Just got a great idea, maybe MS buys NV as defense? Might be a great move...LOL. They have far more cash than Intel to burn, and could buy them for $14-16B easily cash (MS has north of 70B last I checked - no brainer purchase for NV?). Suddenly they have a great SOC for chromebooks, nokia phones, RT crap, tablets etc and a company already making 500mil/yr not to mention all the IP they have. It gives them the next Xbox chips based on Denver rev3 or whatever too (xbox2 for 4K or something in 5yrs?). Hmmm...Great defensive move for either company but for intel I think it ends up costing too much and making it like an AMD->ATI purchase where they just can't afford it (could be wrong, MS seems better able to cash this out). Intel would likely have to borrow to get this done. Someone better make a move before NV gets too expensive and starts to dominate mobile gpus. I predict NV puts the hurt on Qcom+Intel over the next 5yrs. Which in turn means MS/Directx/games on DX also, which will also affect the consoles of course. GDC2013 in 2 months. MS purchase of NV allows them to get a little revenge on Intel for going android too...LOL. MS surely would have more options buying NV than just Nokia alone which was a waste IMHO. But the two combined and as a console leader, could slow the bleeding and maybe get some footholds of the future. Jen Hsun might not mind running the gaming division at MS (where he'd want to be CEO top dog at Intel which is why that probably never works, Intel hates him but needs him...LOL). Just food for thought, crap bouncing around my head today...ROFL.
Qcom earnings 29th. AMD shortly (which shouldn't be too bad as consoles are in there and sold well). Intel shortly too. Fun times to watch the show.
***runs to get popcorn***
One more article showing Intel fabs at low utilization. They need to fab something more than just alcatel etc to get this back to 90+. Or the AZ fab is just pointless. I think they heavily overestimated their power to move to mobile and take on ARM.
"And even then, there's a chance Intel won't bounce back to its previous levels. Intel makes PC chips and the PC simply isn't where technology is at these days.
"This is the first time we're seeing the entire industry coming up fairly well, but the PC sector is not leading it. The PC is not driving the direction of technology anymore, it's not driving processor technology and it's certainly not the software magnet for technology anymore. It's a tablet and smartphone world," said McGregor."
So, MOBILE is leading the charge. 8 months later we're seeing this crap coming true and going forward looks even worse. While Intel can't up utilization, TSMC etc have no issues fabbing all the crap hurting Intel sales. How can you fix that without fabbing the enemy chips? Buying NV is one option, but a tough pill for all involved to swallow. Jen would want to run the show, nobody at Intel would like that...LOL. Too much hate.
Intel realized that they made a bad move on their mobile roadmap and is trying to make up for it. this much has been obvious from their actions these past 2-3 years. Now keep in mind that once a fab plant is up and running, it will again cost significant resources and time to either 'upgrade' or 'repurpose' it to do something different. Intel is basically limiting their expenditure toward a dying desktop PC market (their existing fabs are more than enough to cover demand), and moving remaining resources toward the mobile market
because companies like the old "Ma Bell" and i guess "Google" are rare to come by. Most companies are complete slaves to their stockholders. Intel is very conservative, they always have been. They don't push the market forward unless they're in danger of losing market share. They've been like that their whole existence. They stifle innovation, they stifle new technology, and they stifle competition.
A lot of you younger guys around here don't remember how anti-DIY intel was until AMD started to threaten their market position with the K7 and K8 lineups. The DIY community loved the new AMD chips because (among other reasons) you could overclock the hell out of them, and turn a $200 chip into a better then $1200 chip... it went on like that for a while, until intel started to release some chips that could be overclocked a bit.
The more of a performance advantage intel holds over amd the less consumer friendly they'll get. They were like that once... they'll be like that again.
First of all, coming from some background in nano-engineering, I can tell you that there are hard limitations to how small we can go in terms of fabrication capabilities and we have been walking right on the edge for a couple of years now, continuing on only thanks to new innovations in lithography. That aside, Intel has made huge strides in terms of integrated graphics and moving more mobo controllers onto the CPU itself. I would advise reading up on how a CPU is constructed before spewing out this nonsense...
second of all, Intel is a for profit company first and foremost. and if they monopolize the high-end, they will act like any RATIONAL MONOPOLY and product and price products to both minimize costs and maximize profits using full leverage of their monopolistic power. this is simply what a rational company does when they monopolize a market there is no emotional nonsense here about being good and evil and greedy or not, it's simply what a rational, for-profit company would do. no company would run themselves to a near-zero profit margin trying to out-compete their own product unless they can't help it. Clearly you have no understanding of basic economics here...
<SNIPPED>
First of all, coming from some background in nano-engineering, I can tell you that there are hard limitations to how small we can go in terms of fabrication capabilities and we have been walking right on the edge for a couple of years now, continuing on only thanks to new innovations in lithography. That aside, Intel has made huge strides in terms of integrated graphics and moving more mobo controllers onto the CPU itself. I would advise reading up on how a CPU is constructed before spewing out this nonsense...
second of all, Intel is a for profit company first and foremost. and if they monopolize the high-end, they will act like any RATIONAL MONOPOLY and product and price products to both minimize costs and maximize profits using full leverage of their monopolistic power. this is simply what a rational company does when they monopolize a market there is no emotional nonsense here about being good and evil and greedy or not, it's simply what a rational, for-profit company would do. no company would run themselves to a near-zero profit margin trying to out-compete their own product unless they can't help it. Clearly you have no understanding of basic economics here...
I only have two thumbs here vmem, but I'd give THREE thumbs up if I had another