Convergence kills

 From Corporate Cancer, published in 2019:

The bright future of well-funded diversity departments and their growing cost to corporate budgets can be anticipated by looking at what some of the most converged corporations in the United States are doing. In 2015, Intel announced a $300 million commitment to diversity, pledging to spend $60 million per year by 2020 in order to establish a $300 million fund to be used by 2020 to improve the diversity of the company’s work force. This expensive program was supplemented by Intel Capital’s Diversity Initiative, which at $125 million, is “the largest venture capital resource ever created to focus on underrepresented entrepreneurs.”

So, this suggests Intel has entered Stage Five convergence, which means that it is now incapable of fulfilling its primary purpose. Which means this news will come as little surprise to those who understand the concept.

Intel contemplates outsourcing advanced production

Secretive labs and tightly guarded clean rooms in Hillsboro have long represented the leading edge of semiconductor technology. That’s where Intel crafted generations of new microprocessors, chips that led the industry for decades as engineers working at atomic dimensions invented new ways of packing more capabilities into a minute space. Those discoveries powered years of progressively faster, cheaper and more advanced computers.

And it’s there, in Hillsboro, that Intel began making these new chips at research factories tethered to its labs. Intel would then send its meticulously developed manufacturing technique to its other factories around the world where it was replicated precisely, a well-established practice called “copy exactly.”

The model led Intel to become Oregon’s largest corporate employer and one of the state’s major economic engines, convening researchers from all over the world to engineer new chips as the company spent billions of dollars on equipment to manufacture their microscopic marvels.

Now, Intel is laying the groundwork to toss the old model out the window. It is openly flirting with the notion of moving leading-edge production from Oregon to Asia and hiring one of its top rivals to make Intel’s most advanced chips.

They’re not contemplating outsourcing because they’re seeking better profit margins. They’re contemplating it, and they’re going to do it, because their repeated efforts to make the leap to the next level in chip manufacturing have consistently failed. 

But they’ve got diversity now, which is nice.