Arm CEO Insights on the Intel Situation
Arm CEO, Rene Haas, has shared his perspective on the recent turmoil at Intel, a company that has been an industry giant but is now grappling with strategic dilemmas and leadership changes. Haas, who leads a company with a worth of almost $150 billion, significantly higher than Intel’s, was asked about his opinion on Intel’s future and his company’s potential expansion plans.
“As someone who has been in the industry my whole career, it is a little sad to see what’s happening… Intel is an innovation powerhouse. At the same time, you have to innovate in our industry. There are lots of tombstones of great tech companies that don’t reinvent themselves.”
Intel’s Strategic Dilemma
According to Haas, Intel’s biggest challenge lies in defining its identity: either as a vertical company or a fabless company. This decision has been looming over Intel for the past decade. He believes that the strategy envisioned by former Intel CEO, Pat Gelsinger, to move towards vertical integration was not a short-term plan but rather a long-term strategy that would require five to ten years to implement.
“He’s gone and there’s a new CEO to be brought in and the decision has to be made. My personal bias says that vertical integration is a pretty powerful thing. If they could get that right, I think they would be in an amazing position. But the cost associated with it is so high that it may be too big of a hill to climb.”
The Power of Vertical Integration
While Haas declined to comment on rumors that Arm had considered buying a significant share of Intel, he did express his belief in the power of vertical integration. For a company that controls both its product and the manufacturing process (referred to as fabs), there could be significant cost advantages over competitors. Haas had even advised Gelsinger to license Arm as it could provide the volume needed for Intel’s fabs.
“When Pat was the CEO, I did tell him more than once, “You ought to license Arm because if you’ve got your own fabs, fabs are all about volume and we can provide volume.” I wasn’t successful in convincing him to do that.”
Arm’s Potential Expansion
Rumors have circulated that Arm may be considering a move beyond just licensing its chip designs and might start building its own chips. In particular, there has been speculation about Arm developing its own AI chips. Haas emphasized the importance of understanding the link between hardware and software in this context, something that is potentially easier to grasp when building rather than licensing. This approach could offer better insight into design trade-offs.
“That is easier to do if you’re building something than if you’re licensing IP… If you’re building something, you’re much closer to that interlock, and you have a much better perspective in terms of the design tradeoffs to make.”
Looking Forward
With a trial set to begin on December 16th, Arm is facing its own challenges. Haas acknowledges the uncertainty that investors and partners dislike, but stands firm on the principles that led to the filing of the claim. As the tech industry continues to evolve and adapt, the moves made by both Arm and Intel will have significant implications for the future of computing.
