Intel to boost gross margins – new products must deliver 50% gross profit
25 comments
·July 20, 20250cf8612b2e1e
impish9208
I think Robert California telling Andy Bernard to double profits by the following quarter would also fit here.
sheepscreek
Double, or nothing!
walterbell
100 comments, https://news.ycombinator.com/item?id=44611098
> After years of innovation and community collaboration, we’re ending support for Clear Linux OS. Effective immediately, Intel will no longer provide security patches, updates, or maintenance for Clear Linux OS, and the Clear Linux OS GitHub repository will be archived in read-only mode.. Intel remains deeply invested in the Linux ecosystem, actively supporting and contributing to various open-source projects and Linux distributions to enable and optimize for Intel hardware.
Animats
Intel CEO: "Twenty, 30 years ago, we were really the leader. Now I think the world has changed. We are not in the top 10 semiconductor companies."[1]
Ouch. Although Investopedia rates them as #5.
[1] https://www.tomshardware.com/tech-industry/intel-ceo-says-it...
Havoc
The falling margin is a consequence of falling competitiveness. I don’t think you’ll arrest that by decreeing high margin only going forward. But sure give it a go and see I guess.
This likely means they’ll kill their GPUs? Don’t think those are particularly profitable
scosman
Profitable != margins. GPU folks can at least make a case that GPUs can be high margin (points at nvidia stock and shrugs). Some businesses where all competitors are selling at low margins that isn’t possible.
0cf8612b2e1e
GPUs seem like a space ripe for investment, but this kind of management decree might make follow-up impossible. Do what neither AMD or NVIDIA will: sell me a card with oodles of RAM. Could operate at speeds two generations removed from current top tier and it will still sell.
esseph
You want this, but the margins aren't there, which is why NVIDIA doesn't care so much about consumer and workstation cards.
SlowTao
Sounds about right, it looked like they were a loss leader trying to get a foot into the space. They have been vaguely successful in getting a small toe in the door of GPU's, but not enough to justify the costs.
cjbgkagh
My google fu is failing me but this sounds a bit like Marissa Mayer’s no more small ideas at Yahoo memo. Also if I was a competitor this would let me know just how hard I would have to compete for Intel to give up.
roenxi
This article doesn't seem to actually report anything. It is obvious that no company can arbitrarily choose its own profit margins or they wouldn't stop at 50%. So basically all we have here is the Intel CEO says he wants Intel to be profitable and they're going to prioritise products they think are more profitable than others. I hope this isn't news.
The only thing I can spot in the article that wouldn't come up in a psychic's cold read is speculation that there might be a 20% layoff coming hidden towards the end. I'd suggest reading this sort of article is a waste of attention better spent elsewhere.
zetazzed
Companies can choose their gross margins! Just take the cost of manufacturing, double it, and call that your price. You now have 50% gross margins. But you can't choose your total profit. Maybe almost nobody buys at this crazy price you've set. Now your margins don't seem so clever...
ksec
>Lip-Bu Tan is "laser-focused" on getting Intel back to maximizing shareholder value
I am guessing this is the board's decision again.
Zen 6c is about to come out for server. That is 256 Core per socket. I haven't followed Intel's roadmap for a long time, mostly due to it be very confusing and not exciting. But I am not even aware of any grand plans with TSMC. Which means they are betting their foundry to deliver, both on cost, capacity, and performance.
But AMD needs to work harder. I have been saying this for so many years it is tiring. They need to further increase market shares in every single market, Servers especially hyperscalers, PC, Laptop, OEMS players. I have given them benefits of doubt for so many years Zen 6 generation will be the last of it. I am not even mentioning GPU.
TheRealPomax
Literally anything a public company does is a board decision. That's how boards work. They say what to do, and if the CEO disagrees, the board votes to dismiss them and put someone in the position who can follow instructions.
deadbabe
Or else what?
ThrowawayR2
But what does that actually mean in terms of strategy? Server and enterprise products have the highest margin. Normal consumers, aside from the small gaming segment, are price sensitive. Are they shifting away from the consumer PC market?
hedora
Presumably, they’ll need to abandon cloud and hyperscalers too. That leaves legacy enterprise. (ARM or AMD are going to have better $/perf, and be closer to the dev workstations/laptops, so the only thing Intel would have left is inertia.)
If they actually execute this strategy, sales implode and the CEO is gone.
If they don’t, he demonstrated he can’t set policy, so he’s gone.
wolpoli
This is the type of thinking that got Intel to sell their arm CPU product line.
bilbyx
Looks like Intel is going the same way as Boeing - focus on only shareholder value.
TheRealPomax
You mean mcdonnell douglass. Who went "we both know who's on top here" when they merged, immediately put all of its own people in positions of power, and then effectively destroyed boeing from the inside out in order to maximize shareholder value, until only their name was left and some 350 people were in literal body bags.
bilbyx
I agree that the bean counters from McDonnell Douglas played a big role in Boeing's decline. but it's important to remember that the merger was a negotiated one, not a hostile takeover. Still, it's sad to see how many once-great engineering companies - like DEC, HP, SUN - have been brought down by poor leadership.
ACow_Adonis
So i guess overnight we have a new floor for unempirical projections of future project profit :D
A lot of made up numbers now have a min(50.0) equivalent somewhere :P
I read the title and all I could think of was Michael Scott, “I declare bankruptcy!” Hoping to will reality to your need.
More seriously, isn’t this signaling that all experimental R&D is out? Nothing but incremental progress can deliver anything but an approximation of profit margin.