A short time into the two conversations that served as the basis for this interview with Karin Eibschitz Segal, general manager of the Intel Development Center in Israel, the powers above sent an answer to our question as to how she manages thousands of employees around the world from her home. Her young son enters the room, asking for her help and the interview stops for a few seconds. "This wasn't planned," she laughs. And what would she do if this was a conversation with managers in India? "Same thing," she replies.
It's hard to believe that from the small room as seen in the Zoom background, Eibschitz Segal (42), second only to Intel Israel CEO Yaniv Garty, is managing close to ten thousand employees worldwide. With the outbreak of Covid-19, she was promoted from VP of Validation Engineering in the Design Engineering Group to Global General Manager. In addition to the approximately 7,500 employees under her supervision at four sites in Israel, she now has another 2,000 employees in eight centers around the world.
At beginning of the crisis, Intel went into wartime mode, and succeeded in getting by with emergency contingency plans. But corporate needs began to mount, forcing the huge organization to adapt to a changing reality. Intel's challenges doubled and redoubled, and not just because of its size. Intel is a global company in the full sense of the word. Groups from different countries work together, and managers have to manage thousands of employees outside their home countries. Senior management meets at events and conferences to which people fly from all over the world to hold discussions and make decisions. Above all - Intel manufactures products that require the physical presence of employees, in manufacturing plants, or at development and testing laboratories.
Much rests on Eibschitz Segal's shoulders. As she sees it, she's part of Intel's efforts to "be at the forefront of technology driving the data and computing revolution." She works with Intel's senior managers in Israel to make sure the various development teams meet deadlines. Many Intel products are developed in Israel, the most prominent of which are the Core central processing units (CPUs) used in all Intel products (computers, servers, etc.), along with the communication groups (Wi-Fi, Thunderbolt), the data security group, and the artificial intelligence group. During the discussion, we also touch on Intel's ability to meet the deadlines it has set for itself, and be at the forefront of innovation.
One of the main tasks Eibschitz Segal leads is integrating security in the early stages of Intel product development. "We've decided that it's important for us to push a way of thinking that takes security into account, throughout the development process. This means that no matter what the technology - we're working to make it more secure, aided by collaborations with academia."
The validation group she heads is the one that receives the initial product prototypes. "We conduct testing to ensure the computer does everything we expect it to, and also check other aspects, such as how the chips behave in different temperature conditions." As part of her role, she works closely with the development group whose products they test, with the marketing group, "which determines what's important and what's not, and which benchmarks must be met," and with the customer support and production groups. "For me, a big part of the day centers around the products and technical deep dives, to bring out the best quality products possible," she says, attempting to explain the essence of her role.
Eibschitz Segal began his career at Intel as a student in 2001. Before her current appointment, she managed global groups in software development, hardware, and product testing methodologies.
"Everyone knows you need a broad portfolio"
Intel is exceptional among the major chip companies as the only one that both designs semiconductors and manufactures them in its plants around the world. Almost all well-known chip companies focus on design, with manufacturing outsourced to fabrication plants ("fabs"). In fact, the largest semiconductor maker in the world is TSMC of Taiwan.
Intel owns plants in the US, Ireland and Israel. Its Fab28 in Kiryat Gat is one of the most successful and advanced plants in the world; it is currently upgrading to 10 nanometer (nm) production.
Most of Intel's 14,000 Intel employees in Israel, however, work on development. Intel employs 7,500 developers in Israel, which compares with 4,900 in production, to which 1,350 Mobileye employees have been were added, and about 200 from artificial intelligence chip company Habana Labs, developer of programmable deep learning accelerators for data centers.
After Intel acquired Habana in December 2019 for $2 billion, that company's employees joined Intel. It was a significant business move, designed to bolster Intel's arsenal of capabilities, and provide a response to competition from Nvidia, the major producer of AI-based graphics processing units (GPUs).
"The amounts of data are increasing exponentially, whether because of smart cities, factories, vehicles or stores or smart homes," explains Eibschitz Segal. For Intel, she says, this means that the company "must also take the lead in data transfer, data storage, data processing, and then also draw conclusions from that data. We are looking at a much larger overall market that's expected to reach about $300 billion by 2024. "
But 2020 was not an easy year for Intel. Intel shares suffered a sharp drop following another announcement of a delay in 7 nm production, and concern that the company might outsource some of its manufacturing operations. At the same time, small and agile competitor Nvidia was benefitting from the hype over two acquisitions that had won investor confidence: Israel's Mellanox, which was acquired for about $7 billion, and British chip company ARM, which will be acquired at a $40 billion valuation.
Intel, despite having a sales volume several orders of magnitude larger than that of Nvidia and AMD combined, has a market cap of around the $190 billion mark, while Nvidia's market cap has overtaken it at about $330 billion. AMD's market cap has also jumped tenfold in the last two and a half years, and is already approaching $100 billion.
The Habana acquisition also had a less pleasant side. The deal cut short Intel's extensive internal development of AI chips, much of which was carried out at its Haifa development center. About 600 Intel employees were folded into Habana's activity, or assigned to other groups at Intel following the acquisition. Intel says no employee was fired, although some have chosen to leave. "It's not an easy process to unite two roadmaps into one, and it's emotionally difficult for people, but it was the right thing to do as a company, and we made a tremendous effort to help everyone find themselves in good, interesting and challenging positions, even if for a different product," said Eibschitz Segal.
The acquisition is part of an accelerated process of consolidation and replenishment n the chip market in order to, among other things, become stronger in the growing data center field. "Intel has believed in a broad portfolio of products for several years, and when I look at the market, I see that our competitors understand that too. AMD wants to buy Xilinx and Nvidia wants ARM, because everyone now understands that they need a broader portfolio."
That deal was the second kick to Intel's soft underbelly in a week. Intel is building much of its strategy on the expected growth in the data center market. Following publication of its third quarter financial statements, the company's share price fell by more than 10%, after revenue from data centers fell by 7%. Intel is building on this market for the long-term, not only because of the shift to remote working due to the Covid-19 crisis, but also in light of the transition to Fifth Generation (5G) cellular technology, all of which are expected to significantly increase data consumption worldwide.
"Where we've seen a decline in data centers is in governments and companies, because this is an area where companies and governments take extra precautions because of the uncertainty. This mix has changed our profit margin. A similar thing happened on the 'client side' - more individual consumers are buying computers, while fewer companies are. All in all, the results were excellent, certainly in the Year of the Coronavirus."
"What matters to customers is the end-product performance"
Eibschitz Segal is not responsible for production at Intel. However, as a senior manager, she represents the company's position when indirectly answering the question that is constantly in the air: how does Intel intend to deal with the delays in the transition to 7 nm architecture production, especially given the delays that occurred in the transition to 10 nm production? The position presented by Eibschitz Segal which, it should be emphasized, is not new, is that the improvement in chip performance meant to come from migrating to a smaller architecture - such as the transition from 14 nm to 10 nm, or from 10 nm to 7 nm - is partly achieved by Intel through other technological improvements in production processes.
So, for example, Intel recently announced that some of its next flagship processors will be manufactured using a manufacturing technology it calls SuperFin. According to Eibschitz Segal, this technology improves chip performance almost as if there were another full upgrade in the manufacturing process [like the transition from 14 to 10 nm - U.B.]. Ultimately, she claims, what matters to customers is how the end products - the computers - perform, and not the performance of one single component or another.
"7 nm production is delayed by six months, which created a big mess in the second quarter report. But thanks to the fact that we have such strong chip packaging design technology, even if the 7 nm product is delayed, we'll be able to continue launching a winning competitive product once a year," Eibschitz Segal says. She goes on to elaborate on the components of Intel's strategy, which is "a combination between packaging architecture, integrating standard processors (CPU), a graphics processors (GPU) and accelerators [like artificial intelligence. U.B.], with field-programmable gate array (FPGA) chips, a oneAPI unified programming model, together with investment in memory technology (Intel Optane) and communications (Intel Interconnect).
"We believe that data transfer technology will be critical, as will security - because no one wants to use an unsecured data center or personal computer. These are all basically the things driving us technologically for our products to win."
Intel does not say this explicitly, but the message is that, with all due respect to the performance of one component or another, technological infrastructures are measured by the performance they allow together.
And yet, last week Apple launched its first Mac computer in about 15 years without an Intel chip. Apple developed a chip itself, based on ARM technology (recently acquired by Nvidia in a deal that still requires regulatory approval). Among other things, Apple was indicating Intel's inability to be innovative enough for it.
Eibschitz Segal would not agree to comment specifically on Apple's decision, but Intel has responded: "We believe that PCs based on our processors give consumers the greatest value. They are the ideal choice for users who want to take full advantage of the processor. Most applications are not developed for Apple hardware, which may affect performance. We will know more when Apple's hardware becomes available."
"Our acquisitions are a sign of strength, not weakness"
How do you handle competition from Nvidia and AMD, which have managed to offer advanced products with seriously competitive performance, and have also embarked on equally impressive acquisition campaigns, while you've had to acquire companies offering the products you've failed to develop?
"Competition is on the rise, I agree, both from AMD and of Nvidia . But I have no doubt that we'll handle the competition very well. Intel has a very strong roadmap and I believe in our ability to execute, and you'll see that we'll be the leader.
"In artificial intelligence, Habana is a significant part of Intel's AI portfolio, but it's important to remember that they're just one component. Our AI portfolio is much larger than that. We have quite a few AI capabilities in other components as well. In the area of computerized vision for end-products, we have the Myriad vision processing units (VPUs) from Movidius, a company we acquired. We offer market-leading products; it's a broader narrative than AI.
"As for AMD, Intel's Tiger Lake processor easily beats the AMD Ryzen in many benchmark tests.
"Regarding the acquisitions, many companies have used these methods in the past, like Microsoft, for example. Knowing how to make the right acquisitions is a tremendous strength and I'm in favor of that. I view the ability to connect to the ecosystem through an acquisition and bring in great technology or incredible human capital as a strength, not a weakness.
"Plus, let's take things in proportion. Nvidia's revenue is in the region of $11 billion, and AMD's in the region of $7 billion. Intel's revenue stood at $72 billion in 2019, and will be about $75 billion this year. A 5% increase during the Year of the Coronavirus is good."
What's happening with Habana's products? Why aren't they going into mass production? Are you still stuck in the testing phase?
"Habana is progressing according to plan. Habana has no problems to speak of. You can ask David (Habana CEO David Dahan. U.B.). They are absolutely on schedule and growing as expected in terms of capabilities. But, I'll just say it again, this is a much bigger story, because in addition to AI accelerators, there's a whole range of things here. The AI revolution is more than just one component."
Karin Eibschitz Segal
- VP & GM of Intel Israel Development Center and Intel Validation Engineering in the Design Engineering Group
- 42 years old, married and mother of two, lives in Haifa
- Holds a BA in Computer Science from the Technion - Israel Institute of Technology
- Joined Intel in 2001 while a student
- Included in "Globes" list of Israel's 40 most promising young leaders for 2017
Intel's Israeli Developments
- Core CPU for all PCs (laptops and desktops) and servers at 14 nm and 10 nm
- Thunderbolt technology for wireless communication (Wi-Fi) in computers
- Habana Labs AI-driven accelerators
- Security - Invests to ensure all Intel products are as secure as possible
Intel Israel in numbers
- 14,000 employees
- $6.6 billion exports in 2019 - 12.5% of total high-tech exports and about 1.6% of Israel's GDP
- $13 billion -Intel Inc.'s investment in building development centers and fabs in Israel, from 2005 to 2019
- $6 billion - Intel's investment in upgrading the Kiryat Gat fab in 2014-2018
- $5 million - An additional upgrade to increase production capacity, as agreed upon in 2018
Published by Globes, Israel business news - en.globes.co.il - on November 25, 2020
© Copyright of Globes Publisher Itonut (1983) Ltd. 2020