In 2011, Intel announced it was transitioning from being an incumbent vendor in the microprocessor market to a technology company. With the help of a new strategic partner, TSMC, Intel began to work toward a new model based on a multi-vendor ecosystem rather than a single-vendor dominant one. Pat Gelsinger spoke candidly about Intel’s new partnership with TSMC and what the future holds for Intel and TSMC. There are many lessons from the IDM (Intel Dynamic Migration) strategy adopted by Intel in 2000. At the time, Intel saw the threat from AMD and had to devise a solution. After many failed attempts to develop something, Intel finally devised the idea of Dynamic Migration. So how did Intel come up with this idea? What were the challenges and lessons learned during this process? And how does this apply to the Tower Semiconductor acquisition? In an exclusive interview, Intel CEO Brian Krzanich answered these questions.
Why Intel is Not Following the AMD Model?
AMD’s model was never really successful, as the company failed to maintain a steady customer revenue stream. “It doesn’t matter if you have a great new product unless you have a good way to keep selling it,” says Mark Hurd, chairman and CEO of Hewlett-Packard. “AMD didn’t have any revenue stream.” AMD’s market share in the server business, which it dominated before Intel became a threat, was cut in half after introducing its first Intel-compatible chips. AMD also lost customers when it moved its servers to newer, faster models.
Pat Gelsinger: How did you develop the idea for the “Intel Inside” marketing campaign?
For decades, Intel’s marketing campaigns were based on the company’s core competency: being the king of chip manufacturing. Intel’s slogan, “Intel Inside,” came to life in 1981 when John Sculley, the company’s CEO, asked about the next step in the industry. He said that he believed personal computing would become the next big thing and wanted to position the company in this revolution. He suggested the tagline, “Intel Inside,” for the campaign.
2. Pat Gelsinger: What are the main benefits of using Intel processors?
As part of its IDM 2.0 strategy, Intel announced on March 16th that it was teaming up with Taiwan Semiconductor Manufacturing Company (TSMC), a key partner in Intel’s chip manufacturing operations, to jointly develop high-volume manufacturing processes for upcoming products such as Intel’s next generation “Broadwell” platform. “Intel and TSMC are now working together to bring Intel microprocessor products to market,” says Gelsinger. “This collaboration is the next step in our strategic relationship with TSMC. As we move into the second decade of our strategic relationship with TSMC, we are taking the next steps in extending our technology leadership, enhancing our ability to innovate and deliver differentiated products, and leveraging our combined capabilities to provide customers with the most advanced computing solutions.”
Pat Gelsinger is Intel’s new Chief Executive Officer. Brocade’s former president and CEO is coming in at a key time. Intel is transitioning from a chip-centric business to a technology-centric business, and while he doesn’t have all the answers yet, he has taken the first steps to make it happen. In this interview, Gelsinger talks about what he’s learned from his predecessor, Paul Otellini. He also discusses how the move to TSMC and Tower will impact the future of Intel.
1. Is it true that Intel’s new CEO is Pat Gelsinger?
Yes, Pat Gelsinger is indeed the new CEO of Intel.
2. What is Intel doing to help TSMC?
Intel is helping TSMC by providing them with more resources and giving them more time to work on their products.
3. Why did Intel choose to partner with TSMC?
TSMC is a very well-known foundry that has a strong reputation for quality.
4.How will this strategy affect Intel’s relationship with AMD?
Intel will still be able to use AMD as a supplier of the chipsets and processors that go into their products.