Comment by gwbas1c | Hacker News Reader

Comment by gwbas1c | Hacker News Reader

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> I don't know what happened to Intel.

I worked for Intel for a few years, 2005-2007. It's hard to put into words what happened to Intel. The simplest way for me to explain it is that the employees didn't take risks. A different way to explain it is that most people at the company were too career focused then focused on the actual business.

But this is how disruption happens! Major players like Intel can always see where the industry is going, at a high level, but the rules of each generation in an industry are always murky.

IMO, the "ARM" generation of PCs is a shift to vertical integration. Intel set itself up for horizontal integration, and the openness of ARM means that the lines between "Computer manufacturer and CPU manufacturer" are going to increasingly blur.

Intel's business basically treats PC manufacturers like franchises; and Intel's a culture focuses more on career, and less on risk and business. This means that they're going to increasingly have trouble adapting to the new rules that come in the "ARM" generation.

>A different way to explain it is that most people at the company were too career focused then focused on the actual business.

Every time there are market disruptions people come up with retroactive, "just-so" stories to explain the problems. In Silicon Valley its typically blamed on the MBAs.

The idea that a 50 year old company, a pioneer of the computing industry, with over 100,000 global employees has run into trouble because employees are "too career focused" is such a story. Is there any data that bears this out? How would you measure it? Are the employees at AMD naturally risk takers?

Intel made some missteps in an industry with a long planning lead-time. They may or may not recover. But the reasons are not so simple and concise.

"The Innovator's Dilemma," https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma, explains the situation very clearly. It's a pattern that repeats itself over and over. Intel hasn't been able to prepare itself for disruption from ARM. The graphs in the article clearly show how ARM is disrupting x86.

The book that I link to provides many examples, but it focuses on how hard drive companies struggled every time the physical size of the disk shrunk. Even when they knew "it's time to make a smaller disk," they'd do something silly and be non-competative.

In the case of Intel, when I interned in 2002, they knew mobile was coming and tried to set themselves up for it... But the rules of selling chips to phone makers are different than seeking chips for PCs. (Just like what the book explained in its examples.) In Intel's case, the margins were too slim in mobile... Which is a typical symptom of how a company gets disrupted.

> Are the employees at AMD naturally risk takers?

Don't confuse AMD (company) with ARM (architecture). ARM chips power all mobile phones and smart TVs. They're cheaper, and now are going to be better than x86 for PCs. (High performance, low power, low cost.) This is a textbook example of distribution. What you'll see are smart TV and phone manufacturers selling ARM PCs that are cheaper than x86 PCs, but perform better. Don't believe me? Just wait until someone realizes that all they need to do is swap Android TV out for Windows (ARM) in their assembly line for their smaller smart TVs, and throw a keyboard and mouse in the box instead of a remote.

(FWIW: AMD was never a threat to Intel. They couldn't manufacture in big enough volume.)

Thanks for that. If you can share, what do you think could be done at the higher level to prevent this?

So, I'm basing this on "The Innovator's Dilemma:" https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma

One thing they could do is invest in ARM manufacturers, and / or startups that are in the ARM business. As these companies grow and Intel shrinks, slowly let the investments eat themselves from the inside. For example, every few years one of Intel's fabs could be traded to one of their ARM investments. Later, as executives retire, leadership from the ARM manufacturers or startups become Intel executives. (Edit: This is what Disney did with Pixar.)

Another thing they can do is very openly admit that they are being disrupted. The CEO can basically dictate that they have to get into the ARM market and sell ARM chips according to similar terms as existing ARM manufacturers. According to "The Innovator's Dilemma," this approach is hard to do. (Edit: It's hard to do because institutional momentum and personal habits and assumptions are very hard to break.)

And, another thing is that Intel could start a business unit that behaves like a startup. It would get the majority of the CEO's attention; with running the existing business falling to other executives and managers. This new business unit would follow the ARM rules; and it would grow at the expense of the rest of the business. Intel might even need to sell their own computers.

Honestly, I suggest reading the book. It explains it better than I can. (I also suggest watching how major car manufacturers switch to Electric. GM and VW seem to be doing this.)

Thanks, I know the book. I understand being disrupted by something new but being beaten at your own game seems something else entirely.

It would't surprise me if the world moved from x86 to ARM despite Intel's better fabs. Companies being too good, too focused at their own business that they miss a fork on the road is a common tale.

But instead, they're completely stuck and unable to perform at what used to be their core strength.

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