Finally found the 20 years of Bitcoin Intel’s repression

A few days ago, there was news that did not attract widespread attention in the industry: the traditional chip giant Intel (Intel) is going to release its own bitcoin mining chip.

This was actually discovered after a speech was leaked. In the speech, some media noticed that Intel will give a keynote speech on “Bonanza Mine: An Ultra-Low Voltage Energy Efficient Bitcoin Mining ASIC” at the upcoming International Solid State Circuits Conference (ISSCC). It is reported that Intel has prepared a total of two generations of SHA-256 ASICs: BZM1 and BZM2, which are suspected to use Intel 4 process (ie 7nm). This time it will be BZM1 that will be shown at ISSCC. 

According to the gossip, the BZM1 has a computing power of 137 GH, a power consumption of 2.5 W, and a power consumption ratio of only 18.2 W/TH, which is lower than the 21.5 W/TH of Bitmain’s current most powerful mining machine, the S19 XP. You must know that the energy consumption ratio is the most critical parameter of the Bitcoin mining machine.

From the point of view of parameters, BZM1 is undoubtedly very suitable for home deployment. It is not known whether the BZM1 has the advantage of large-scale deployment or is designed for families, but the BZM2 with its parameters hidden is more like a product specially designed for mining farms.

The news of Intel’s launch of mining machine chips is very accurate, and the market has found that someone has signed an order with Intel. Ohio mining company GRIID disclosed in an S-4 filing to the SEC that GRIID said it had signed a four-year BZM2 procurement contract with Intel.

Finally found the 20 years of Bitcoin Intel’s repression

Cryptocurrencies have undergone earth-shaking changes in the past two years, and the market value of Bitcoin has exceeded the trillion-dollar mark, on an equal footing with tech giants such as Tesla and Facebook. It was lined up a few months after its peak.

Finally, Intel, which has been suppressed for decades, has to take the train of Bitcoin.

Missing the golden age of mobile internet

Founded in 1968, Intel is currently one of the world’s highest-paid semiconductor chip manufacturers. Moore’s Law proposed by its founder, Gordon Moore, affects the development of integrated circuits. However, if you look at the stock price, the past two decades are two decades that Intel has lost.

Starting in 1995, on the fast train of Internet development, Intel’s stock price started to rise from US$3.98. Before the burst of the Internet bubble, Intel’s stock price peaked at US$75.81 in September 2000. In more than 5 years, Intel’s stock price rose as high as 1806%.

$75.81 is not only the high point of Intel’s stock price before the dotcom bubble, but also the all-time high as of now. In the following 21 years, Intel’s stock price has never exceeded this level.

Finally found the 20 years of Bitcoin Intel’s repression

Intel stock price trend 1994-2021

Some people think that the Internet bubble is too big to make Intel’s market value so high that Intel has not recovered until now. Is it really?

Between 1994 and 2000, its net profit after tax increased from $2.288 billion to $10.535 billion, a compound annual growth rate of 28.98%. And Intel’s after-tax net profit in 2020 is only $20.9 billion. If calculated from 2000 as the starting point, the compound annual growth rate is only 3.4%. 

It’s not that the bubble is too big, it’s that Intel’s own development can’t keep up with everyone’s expectations.

Looking back at Intel’s development, it is not difficult to see that Intel is not without the opportunity to return to the top, but the opportunity has been missed. Just like the recent golden decade of missing the mobile Internet.

On the other hand, Qualcomm, which is also a chip manufacturer, but firmly grasps the mobile Internet, occupies 27% and 62% of the smartphone chip and 5G baseband chip market share, and now has a market value of 187.8 billion US dollars, which is different from Intel’s 191.8 billion US dollars. Few. In 2000, Intel’s market value was several times that of Qualcomm. Qualcomm’s 2021 fiscal year annual report shows that its net profit after tax for the year was $9.043 billion, less than half of Intel’s.

Of course, Intel is not without attempts to participate in the mobile Internet wave. At the earliest, Steve Jobs had intended to purchase Intel chips in the original iPhone, but Paul Otellini, then Intel’s CEO, rejected Apple’s low offer. To this end, Apple had to purchase ARM-based chips designed by Samsung.

In 2016, Apple decided to introduce a new baseband chip manufacturer to prevent the exclusive supplier Qualcomm from dominating the baseband supply. Intel is on Apple’s radar again. However, Intel’s poor performance in the baseband field led to this cooperation only lasting less than 3 years. After losing Apple as a customer, Intel had to shut down the baseband business and finally sold the business to Apple for $1 billion.

Surrounded by strong enemies

Many people wonder, what is Intel doing in the golden 10 years of missing the mobile Internet? Perhaps we have a sneak peek from Intel’s years of financial reports.

Intel will expand other businesses on the condition that the CCG business revenue of the Client Computing Group (PC Client Group) grows steadily and slightly.

Finally found the 20 years of Bitcoin Intel’s repression

Intel’s revenue structure in the past 10 years, source: wind

Intel’s PC client group business revenue increased from $31.5 billion in 2010 to $40.5 billion in 2021, and its share of total revenue fell from 72.43% to 51.26%. Presumably, Intel also recognizes that business in this segment alone cannot bring higher growth rates to the company. Therefore, in the past few years, Intel has begun to develop new business lines while ensuring its main business. Data Center Group DCG, Internet of Things Group IOTG, Non-Variable Storage Solutions Group NSG and Programmable Solutions Group PSG et al.

However, when Intel’s diversification strategy has not shown results, the main business of the PC client group business has been challenged.

In Q1 2021, AMD surpassed Intel in the desktop CPU market share for the first time in 15 years with the advantages of the Ryzen 5000 series CPUs of the 7nm process and Zen 3 architecture with high cost performance. Then in Q4 2021, Intel changed the 14nm process technology used by the 5th to 11th generation CPUs, and used the Intel 7 process technology (10nm) on the 12th generation CPU, and the performance was greatly improved, only from AMD. Grab a lot of share. However, AMD will release the Ryzen 7000 series CPU with stronger performance than the Ryzen 5000 series in the second half of the year. Whether Intel’s desktop market share can maintain its advantage still needs to be verified by the market.

Finally found the 20 years of Bitcoin Intel’s repression

Similarly, in the server market, Intel also faces competitive pressure from AMD. Although in terms of market share, Intel is still a well-deserved overlord. However, a large number of server users have begun to accept AMD, so Wang Sicong’s own million server computers used AMD EPYC 7763. According to the latest research report from investment bank KeyBanc, AMD’s market share in server CPUs is expected to reach 20% by 2022.

Finally found the 20 years of Bitcoin Intel’s repression

On top of that, Apple’s de-Intelling of the Mac has cost it a huge revenue stream. Although MacOS (excluding Hackintosh) has always been classified as a niche system, its shipments in 2019 also accounted for 6.6% of the global PC market share, and these computers all use Intel CPUs. According to user estimates, the CPU used by the Mac accounts for about 7.8% of Intel’s customer computing group’s revenue, or about 4% of total revenue.

The prospects are unclear, and the main business has faced major challenges. Where should Intel go? 

Low-power Bitcoin ASIC mining chips may just be Intel’s testing ground 

On February 15, 2021, Intel announced the change of CEO to Pat Gelsinger. This is Pat Gelsinger’s return to Intel after 12 years. Pat Gelsinger joined Intel at the age of 18. During his 30 years at Intel, he grew from a quality control technician to the company’s youngest vice president before leaving in 2009. The three fires he returned to Intel were to promote the development of the 7nm process, invest $20 billion to build two new fabs, change the existing IDM model, and launch IDM 2.0.

Less than a year after Pat Gelsinger returned to Intel, in January 2022, Jeff Wilcox, Apple’s director of system architecture and head of the M1, M1 Pro, and M1 Max chips, announced that he was leaving Apple to join Intel as CTO of Intel’s design engineering group, responsible for System-on-a-chip (SoC) architecture for all Intel customers.

In fact, Jeff Wilcox is an Intel veteran like Pat Gelsinger, having spent 12 of his 25-year chip career at Intel, serving as chief component architect at Intel from 1997 to 2007 and client from 2010 to 2013 Chief Architect of PC Chips.

Since then, we can seem to find that Intel’s introduction of low-power Bitcoin ASIC mining chips is a matter of course. Or, developing a low-power Bitcoin ASIC mining chip is just a technical experiment by Intel. 

Intel’s 12th-generation CPU adopts a new performance hybrid architecture, that is, performance core + energy efficiency core (large and small core or heterogeneous multi-core), which can improve the multi-core energy consumption ratio under the same area. From the design idea, it can be seen that Intel has begun to pay attention to the energy consumption ratio. Likewise, the M1 series chips are advertised as consuming less power for the same performance.

In addition, highly integrated ASIC chips have begun to become the development trend in the computer field. The Apple Afterburner accelerator card, an ASIC expansion card costing as much as $15,000 that Apple once designed for the Mac Pro, is integrated into the M1 Pro and M1 Max chips.

Intel’s upcoming BZM1 happens to have the technical applications required for industry development, and the contract signed with GRIID expires in 2025, when Intel’s new fab will also be put into production in 2025. Of course, maybe all of this is a coincidence. Obviously, rather than Bitcoin ASIC chips, we should pay more attention to what kind of products Intel with the most advanced fabs will launch after 2025, and whether Pat Gelsinger can lead the semiconductor giant back to the top.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/finally-found-the-20-years-of-bitcoin-intels-repression/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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