The Revival of Chipmaking Royalty

An excerpt from the February issue… [Gilder's Daily Prophecy] February 26, 2021 [UNSUBSCRIBE]( | [ARCHIVES]( [External Advertisement] [Tom Gentile’s Biggest Crypto Prediction Yet]( [Bitcoin]( Tom Gentile predicted Bitcoin would hit $20,000 by the end of 2020. And if you’ve been paying attention, you know that Tom’s right on the money. Now, he’s got another target in his sights – and he believes it’s the BEST chance for everyday folks to make a fortune. [Take a look.]( [Warning] Do you enjoy receiving Gilder's Daily Prophecy? Please [Click Here Now]( so we know to continue sending you Gilder's Daily Prophecy for free! The Revival of Chipmaking Royalty [George Gilder]Dear Daily Prophecy Reader, Below is an excerpt from the February issue of The George Gilder Report. You can [go here]( for information if you are not already a subscriber. Keep scrolling… Intel used to be world’s champion in making the leading-edge chips that are the central test and tool of national industrial power and prestige. Intel was America’s greatest asset in its microchip competition with China. Now, under departing CEO Bob Swan, it has been planning to farm out manufacturing of its highest-performing 3-nanometer chips to TSMC in Taiwan, which is widely recognized to be part of China. Wise guys on Wall Street are telling Intel to get out of manufacturing altogether. TSMC has committed itself to produce 50 million smartphone processors per quarter for Apple, which replaced its X86 Intel designs with its own M1 processors. TSMC plans investments of some $25 billion in leading-edge wafer fab capabilities at world-beating two-nanometer feature sizes. It is barging in with a $12 billion fab in Intel’s backyard near Chandler, Arizona. Meanwhile, Intel can’t even make its own 10-nanometer process yield adequate numbers of usable devices. It has put off 7 nanometers until 2023 when TSMC will be producing at 2 or 3 nanometers. Although these geometric measures can be deceptive — and Intel claims its largely 3D 10-nanometer process is comparable to TSMC’s 7-nanometer process — TSMC is moving on to even more ambitious targets. Intel may soon be unable to compete even with SMIC of Shanghai, China — which, under the leadership of several former TSMC executives, is moving aggressively toward 10-nanometer chips and below. All is not lost, though. You will be relieved to know that by crucial measures; Intel remains the global semiconductor leader. Corporate Governance VP Suzanne Fallender points out that “just as important as some of these customer and product milestones” are Intel goals — such as sustainability, climate change, gender progress, and LGBTQ sensitivities. While cancelling orders at ASML for new Extreme Ultraviolet photolithography gear — won’t need that! — Intel is winning accolades in the New York Times for its massive new investments in ESG (presumably, epitaxial silicon germanium). No, it’s a lot more exciting and inspirational than that! Judging from Fallender’s recent tweets, ESG means “environmental, social, and governance” materials that will enable new “intersectional” chips. Promised is integrated firmware programming for women’s intuition, LGBTQ interfaces, and carbon-neutral company parking lots. In these designs, Fallender may well have to share credit with Dawn Jones, Intel’s “Chief Diversity and Inclusion Officer and Director of Social Impact” and a set of other executives with comparably imperial and diverse titles. (But maybe not. My rule is the longer the title, the less influential the job.) Fallender boasts of the “microwind turbines and solar carports” at the company’s Santa Clara headquarters and outreach efforts to the transgender community. Her bold $300 million program for “diversity” is a real “investment” that will enable Intel to abandon its costly and archaic hiring standards based on merit and engineering macho. Intel promises to hire 14% more “diverse” engineers in the next five years. This presumably puts it far ahead of AMD, TSMC, and Nvidia in this crucial metric. Lisa Su, Morris Chang, and Jensen Huang don’t count, by the way. As you should know, “cisgender” Asians are not “diverse.” Just joking, folks. Of course, you don’t know! Diversity is in the eye of the beholder. People who take these corporate nincompoop VPs in Santa Clara seriously are already fully invested in druidical sunhenges, windmill totem poles, and other planetary green goo. They will miss a major investment opportunity. Intel may be dead, but it is in the process of being born again! It offers a huge turnaround opportunity. [Why This Tech Titan REALLY Retired?]( Have you heard George Gilder’s latest extraordinary prediction yet? [GGR Moneyball]( was dubbed the “Tech Prophet” by Forbes… once won the White House Award for Entrepreneurial Excellence… and his work is respected by tech insiders like Bill Gates and former Google CEO Eric Schmidt… And recently, Gilder went on camera to explain how a new tech revolution is about to hit America… one that could unleash up to $15.1 trillion in new wealth. According to Gilder, if you don’t understand this new tech you could miss out on one of the greatest moneymaking opportunities for thirty five years. [Get more details here.]( [Have you heard George Gilder’s latest extraordinary prediction yet?]( A Trip Down Memory Lane I’ve been writing about Intel corporation and its leaders for some 40 years. In Microcosm: The Quantum Era in Economics and Technology (1989), long before it mastered intersectional chips, I touted it as “the most important company in the history of the microcosm” and “the single most important company in the world.” I was a wide-eyed Intel groupie. In the office of Les Vadasz, VP of strategic planning, I learned the rudiments of transistor physics. Robert Noyce described to me his invention of the integrated circuit. He even persuaded me that his working planar device — not Jack Kilby’s feckless kludge at Texas Instruments, with its gold wires arching over the chip and insulated by air — was the first real IC. Long Time CEO Andy Grove gave me a crucial book for understanding his technology, his own The Physics and Chemistry of Semiconductor Devices, which was assigned at Caltech by my mentor, Carver Mead (also the seventh badge at Intel). I learned a lot from Grove. I came to understand the sting of his tongue when I revealed his Hungarian name, Andras Grof, in Microcosm, and thus was regarded possibly to have endangered his family in Hungary. He also accused me of writing unauthorized histories that failed to recognize crucial technical details, and sneered at my book Telecosm for its false promise of infinite bandwidth. He suggested instead a new Grove’s Law: Bandwidth is always a hundred times less than you need. This story from Andy Grove remains relevant today. It was from bitter experience that Grove spoke of bandwidth inadequacy. Expecting huge increases in communications power from the telcos in the early 1990s, he launched Intel’s ProShare videoconferencing under his protégé Pat Gelsinger. At age 28, Gelsinger had been a Grove protégé for a decade. Interviewing Gelsinger at age 18, Intel engineer Ron Smith had described him to Grove as “smart, very aggressive and somewhat arrogant — he’ll fit right in.” But after flourishing for two years at Intel, Gelsinger left to get a PhD at Stanford. Grove was aghast. What on earth had Stanford to offer compared to the world epicenter of quantum technology and the pioneer of the integrated circuit? Challenging his young star in the spirit of Peter Thiel’s fellowships, Grove demanded: “Do you want to learn to fly the jet on the simulator, or the real thing?” He persuaded Gelsinger at age 21 to leave Stanford’s PhD program to play a crucial role on the design team for the 386 microprocessor, which would become a pivotal chip in Intel’s history and the history of the personal computer. Gelsinger ended up perhaps Intel’s key employee, leading the design also of the 486 microprocessor. He declares, “I have to give credit to Intel. How many companies are truly merit-based in their decisions on promotions and assignments?” Winning patents for built-in self-test (BIST) advances and designing chips with no obvious credentials, Gelsinger —in his early twenties —outperformed all other design engineers at Intel. A fervent Christian, Gelsinger even got away with chastising Grove for using profanity in the office and refused to take a super prestigious upward-mobile role next to Grove’s desk as a personal technical assistant. Grove loved Gelsinger’s defiance and tolerated his faith. By the early 1990s, Grove called on Gelsinger to head the company’s first great systems breakthrough project: Grove’s videoconferencing moonshot. ProShare was Zoom a quarter century too soon. It failed because the leading monopoly telcos refused to provide even ISDN (Integrated Service Digital Networks) to the home and office. With megabit-per-second top rates in its most advanced form, ISDN could have allowed full ZOOM videoconferencing over existing plain old telephone systems (POTS) lines. But even 64-kilobit lines could have enabled a salable system. The telcos left Andy and Pat high and dry in a copper cage. It was Grove’s only major setback at Intel — and Gelsinger’s chief setback in his life. Both learned never to trust the telcos and their bandwidth promises. After expenditures of three quarters of a billion dollars and five-years work by some 700 engineers, Intel had to give up on their visionary Proshare scheme to give the telcos a vast new market. The failure of Proshare retarded Gelsinger’s advance at Intel. And so started a new adventure… Regards, [George Gilder] George Gilder Editor, Gilder's Daily Prophecy World’s second-richest man’s NEW world-changing disruption [Disrupt Clock]( 1997, a relatively unknown man disrupted the retail industry. 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