Enlarge /. Intel's continuing setbacks in developing new, denser manufacturing processes raise questions about how it will compete with AMD – let alone with emerging ARM-based competitors like Amazon, Apple, or Ampere.
Yesterday, Intel's Q2 2020 earnings report brought more gloomy news for the company's advanced manufacturing processes. The next generation 7nm manufacturing process is now a year behind schedule. These parts should not be seen until the end of 2022 at the earliest.
14 nm barrier from Intel
Intel's struggles with the development and manufacture of 7 nm follow what can generously be described as a less successful transition to 10 nm. In March of this year, George Davis, CFO of Intel, described the company's 10nm process (used in its current Ice Lake line of laptop CPUs) as "(not) the best node Intel ever had" , and further said that 10nm Intel would do this "less productive than 14nm, less productive than 22nm … it will not be as strong a knot as people would expect from 14nm or what they were in 7 nm will be seen. "
These efforts to achieve higher clock speeds and better yield rates of 10 nm have forced Intel to continue to rely on its aging 14 nm process, which is now so old and revised that it is often called "14 nm +++ + "is referred to. Ice Lake's 10nm laptop CPUs are far from worthless. Because of their higher integrated GPU performance and energy efficiency, they are a top choice for devices with limited battery. But also with laptops, Intel Ice Lake 10nm competes directly with Intel Comet Lake 14nm, whereby the most powerful Intel parts come from the older process.
When Davis admitted these setbacks at 10 nm in March, he thought 7 nm was Intel's chance to regain parity with other manufacturers. So this week's news that 7 nm has fallen back six months is particularly bleak. Assuming there are no further setbacks, Intel's final 7nm debut is roughly on schedule with the proposed 3nm parts from TSMC's competitive foundry. (TSMC is one of the largest foundries in the world; Intel rival AMD is one of TSMC's customers.)
Intel's nomenclature for process size is slightly different from that of TSMC – an Intel 7nm process roughly corresponds to the actual transistor density of a TSMC 5nm process. While this distinction is important, it does not offset the predictions that Intel represents a full process size behind its competition for another entire architecture cycle.
Look for alternatives
With its previous internal manufacturing, Intel is beginning to deal with "more aggressive" outsourcing strategies. As one of the world's largest and most successful chip foundries, Intel has used third party factories for very little production in the past. Usually only cheap products without CPU are used, which are based on older processes.
Given the ongoing problems with 10 nm and now 7 nm, CEO Bob Swain says the company is aiming for a "more pragmatic" approach to using third-party foundries. This can mean more critical components like GPUs or even CPUs that come from outside of Intel itself. The company's advanced multichip packaging technologies are used to combine different chips into a single package.
When Intel relies on third-party sources for mission-critical parts, it is under a lot of pressure that it has avoided by keeping things internal. Procurement of components externally can lead to shrinking margins and even security of supply issues as Intel is forced to compete with competitors such as AMD and Nvidia for production capacity at the same third-party vendors.
In March, Intel planned to shorten the 10 nm production cycle and rely on a fast 7 nm deployment to restore parity with the competition. However, with the announcement of the 7nm setback this week, it's about getting 10nm CPUs up and running. The company is now saying that it will increase the delivery of 10 nm CPUs by 20 percent and achieve another "full performance node" through the 10 nm process. That said, we're going to look for a 10nm + before we see a 7nm debut.
Intel's first 10nm desktop CPU architecture, Alder Lake, is expected to hit the market in the second half of 2021.