Back in May, I argued that Intel (INTC -3.67%) needed to replace two executives. The first was then-CEO Brian Krzanich who resigned less than a month later, although the company's board of directors has yet to name his permanent successor. The second was Sohail Ahmed, whose biography on Intel's website says "is responsible for the development and deployment of next-generation silicon logic technologies that will produce future Intel microprocessors."
On Oct. 17, The Oregonian published details from a memo penned by Intel chief engineering officer Murthy Renduchintala revealing that Ahmed is planning to retire next month. (I managed to get a copy of the memo, too, and it says that his last day will be on Nov. 21, 2018.)
Image source: Intel.
Replacing him as the head of Intel's manufacturing technology development efforts will be Dr. Mike Mayberry.
Here's why this management change is long overdue.
The 10nm flop
Intel long prided itself on its leadership position in chip manufacturing technology relative to the rest of the industry. In fact, even as recently as March of 2017, Intel hosted a Technology and Manufacturing Day in which it bragged that its then-upcoming 10-nanometer (nm) technology was a "full generation denser than other '10nm'," deriding its main chip manufacturing competitors Taiwan Semiconductor Manufacturing Company (TSM 0.60%) and Samsung (NASDAQOTH: SSNLF).
For all of the company's protestations of manufacturing technology leadership back then Intel still hasn't put its 10nm technology into mass production (in 2013, Intel told investors that it'd be "ready in 2015") while TSMC not only successfully brought its own 10nm technology into production (it built millions of chips to support Apple's (AAPL -2.41%) 2017 iPad Pro and iPhone lineups), but it's even shipping its follow-on 7nm technology today inside of Apple's latest iPhone XS, iPhone XS Max, iPhone XR, and its newly-announced iPad Pro tablets, too.
It's important to note, though, that what Intel calls its "10nm" technology and what TSMC refers to as its "7nm" technology are supposed to be roughly comparable in terms of chip area.
Intel's latest processors are built on derivatives of its 14nm technology (Intel has made performance enhancements to the technology over the years), although the company did reiterate on its most recent earnings call that the company is "on track for 10nm-based systems on shelves during the holiday 2019 selling season."
The point, though, is that Intel's manufacturing technology development organization really screwed up the development of its 10nm technology -- something that has translated into product delays.
Righting the ship
The task of Intel's manufacturing technology development group under Mayberry will be to right the ship. This means that the company needs to make sure that its 10nm technology isn't delayed any further and, more importantly, that its pipeline of future technologies -- 7nm, 5nm, and beyond -- is healthy so as to minimize the risk of something like the 10nm fiasco happening again.
Intel didn't talk about its 7nm progress on its Oct. 25 earnings call aside from interim CEO and CFO Bob Swan saying that the company's progress on 7nm would "influence how we think about [2019] CapEx," but if we rewind back to the July 26 call, Renduchintala did say at the time that the company was "making good progress on that development."
