Hello and welcome to Protocol | Enterprise. Today: Why the stakes are huge for Intel’s EUV transition, how a rabbit movie became a symbol of the power of open-source technology, and Oracle’s thinking about making the biggest deal in its history.
Chipping away
With so much attention paid to software’s ravenous appetite (and rightly so), it can be surprisingly easy to overlook the progress of the hardware that makes it all possible. That progress used to be dictated by Intel, whose co-founder’s “law” set the pace for decades of technological chip advancement, but things have changed.
Apple, AWS and TSMC are showing the world that real breakthroughs can be made without relying on Intel to come up with something smaller, faster and cheaper every two years. There’s no one more aware of that shift than Intel CEO Pat Gelsinger, who is approaching the first anniversary of his return to the company he’s spent more than 30 years pushing forward.
Intel's approach to manufacturing is critical now. Gelsinger had a lot of work to do this year, but perhaps his foremost challenge was restoring Intel’s manufacturing group to its former position as the tech industry’s engine. One of the most important — and most expensive — tools needed to get Intel back on track will be extreme ultraviolet (EUV) lithography, and Protocol’s Max Cherney got a rare look inside an Intel facility just outside Portland, Oregon, where those efforts take place.
- EUV lithography is a mind-blowing process: Lasers fired through droplets of molten tin are directed onto a silicon wafer to etch each chip’s features.
- The system is “theoretically precise enough to hit your thumb with a laser pointer from the moon,” as Max wrote.
- The machines required to do this weigh 180 tons each and cost $180 million.
- The end result is a silicon wafer from which each individual chip is cut, after a weeks-long 1,000-step manufacturing process that shuttles that wafer along a journey of more than 100 miles within the factory.
A hitch: Intel doesn’t expect to ship EUV chips until 2023, as it takes a long time to make sure it has refined the process in order to achieve the right yield of working chips from each wafer. That deadline underscores Gelsinger’s problem: TSMC has been shipping chips made with EUV tech since last year.
- Intel’s manufacturing stumbles over the last three or so years have been well documented, and it’s paying the price for them now.
- Those delays opened the door for longtime rival AMD to make its biggest PC market share gains in over a decade, and encouraged Apple to develop its game-changing M1 processor.
- Market shifts happen more slowly in the server market, but Intel’s share there has declined as well while AWS has aggressively marketed the price-performance of its Graviton chip as an Intel alternative.
Intel’s not going anywhere just yet: So much of the world’s software has been written for its chips, and it will take a very long time for that to change.
- Given the ongoing chip shortage, it will likely be able to keep those expensive factories cranking out as many chips as they can for the foreseeable future.
- U.S. regulators remain worried about relying so heavily on TSMC for chip production given the volatile nature of the Taiwan-China relationship.
- If negotiations over the Biden administration’s Build Back Better bill really did collapse this weekend, Congress might finally find the time to pass a long-delayed package of subsidies for U.S. chip companies early next year.
But Intel can’t afford further delays when executing these manufacturing-technology transitions, especially the full roll-out of its EUV tech. Should it fall behind the pace set by others, its enterprise-tech customers will have little choice but to look for alternatives.
A MESSAGE FROM LEXMARK
Lexmark, a leading provider of printers and imaging equipment — one of the first IoT devices — understands the potential as well as the challenges better than most. We sat down with Lexmark CEO Allen Waugerman to discuss this major development, which he calls one of the most significant milestones in the company’s 30-year history.
This week on Protocol
Please welcome Aisha Counts to Protocol | Enterprise! Aisha has been with Protocol for several months as part of our Fellows program; you might remember her story about consulting companies realizing they need in-house software development talent. As of today, she will be covering the booming enterprise SaaS market, and you can reach her here.
Furry and funny: We’ve written a lot about open-source software, but open-source video? Protocol’s Janko Roettgers brought us the story of “Big Buck Bunny,” a short movie used by designers and developers at Blender to test the performance of their animation software: It was released under an open-source license and has become something of a legend within the field.
Financial corner
Snowflake CEO Frank Slootman sold off $344 million of his shares in the cloud data warehouse company, part of a larger trend in enterprise SaaS as insiders look to cash out now that the cloud-stock honeymoon induced by the pandemic is over.
Dialpad raised $170 million in new funding that valued the company at $2.2 billion, double what it was worth at this time a year ago.
Low-code and no-code companies remain hot: Sigma Computing raised a whopping $300 million funding round, nearly four times as much as it had previously raised.
A MESSAGE FROM LEXMARK
Lexmark, a leading provider of printers and imaging equipment — one of the first IoT devices — understands the potential as well as the challenges better than most. We sat down with Lexmark CEO Allen Waugerman to discuss this major development, which he calls one of the most significant milestones in the company’s 30-year history.
Around the enterprise
The Log4j saga continues: The Apache Software Foundation released a third patch for the vulnerability on Friday after finding problems with an earlier version released last week.
Oracle reached a deal to buy healthcare giant Cerner for nearly $30 billion, which would be the largest deal in Oracle’s history.
Thanks for reading — see you Thursday!