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Tuesday, June 21, 2016

More Uncertainty About INTC Stock Future

In an article entitled "Intel Outside as Other Companies Prosper from AI ChipsPeter Burrows writes in the MIT Technology Review:

Intel is no longer a case study in adaptability. On the contrary, it has whiffed in the market for mobile chips used in smartphones and tablets, by far the largest new opportunity for chip makers in the past 10 years. On April 19, the same day it said it would cut 12,000 jobs, Intel scrapped development of some of its mobile Atom chips despite years of heavy investment. And for the past few years, the world’s largest chip maker has seemed indifferent to another potentially vast market: the one in chips designed for the artificial--intelligence technique known as deep learning.

Read the full article at the MIT Technology Review web site, linked below:
Intel Outside as Other Companies Prosper from AI Chips

Though the future for AI application-specific silicon systems seems very promising, Intel Corp. management seems to be stuck with the general-purpose processor architectures of the past--as if they insist on milking the last drop of value out of the ancient x86 Intel Architecture. This is all taking place while most software giants (Google, Microsoft, Facebook, etc.) on the market are actively developing their own hardware AI processing solutions in house and outsourcing manufacturing of their systems IP to competitive manufacturing facilities, like Samsung, TSMC, Global Foundries, etc.


Let us also not ignore the long-term investments that hardware design companies like Nvidia have made in the AI field, over the last few years. Is the x86 Intel Architecture, capable to penetrating application-specific markets? Will creating a massive network of on-die (x86-based) compute cores the right way to get to a cost or energy efficient AI platform product? With the current silicon fabrication yield problems, will Intel Corp. be able to produce more than one line of "me too" products at a cost competitive price?

Although Intel Corp. "Server" or "data center" market seem to be healthy at this point in time, We see a plethora of new low-cost entries into this market that will, without a doubt, devour on Intel Corp. customer base and future profit margins.



As stock holders, we need to be watchful of the potential for more reoccurring, blindsided and ignorant decisions, on the part of the current Intel Corp. management team. We need to wonder whether the Board of Directors, with Andy Bryant still at the helm, in spite of missing the last Smart Phone boom, is capable to protecting us as stock holders, from another downfall.

Please submit your views and comments by clicking on the "comment" link below.

--Dr. Flywheel

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