Intel says it 'bit off too much' amid 10nm chip delays

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Intel says it 'bit off too much' amid 10nm chip delays

Investors raise concerns over Intel's market position despite record revenues.

Intel has faced a grilling from investors over production delays of the company's new 10 nanometer processors as concerns mount over its ability to remain competitive.

Intel CEO Brian Krzanich said that the full-scale release of the 10nm chips would be delayed until sometime in 2019, despite initially releasing in limited numbers as far back as 2017.

"We think we bit off a little too much in this case," said Krzanich, during an earnings call with investors, transcribed by Seeking Alpha. "It may not seem like a lot, but 10% can make a lot of difference in this kind of world," he added, referring to the scaling process.

The company faced repeated questions over its ability to deliver the chips, including a suggestion that the company's base technology may be flawed.

"There is nothing wrong with the design library," said Krzanich. "If there were basic functionality issues, you wouldn't be able to ship a product."

"We know the performance is in line. So it's really just about getting the defects and the costs in line to where we want," added Krzanich. 

Intel said low production yield was due to a problem with the manufacturing of the components, which has now been identified and will soon be fixed.

Intel has been keen to advertise the power improvements and efficiency gains of the 10nm chips, but has yet to fully replace its existing 14nm range; chips such as its eighth-generation Coffee Lake processors are built on the 14nm process.  

The issue is compounded further due to stiff competition from the likes of Qualcomm, which is already mass producing 10nm chips in the form of the Snapdragon 835 and 845 mobile processors.

In an attempt to allay concerns, Krzanich said the company was committed to the process and remained optimistic it would be able to keep ahead of its rivals.

"We're not going to skip 10, there's a lot of learning there that we can carry into 7nm production," he said. "Also, around 80 per cent of our 14nm capital equipment is movable to 10nm production and the same thing will happen between 10 and 7nm processes."

Intel reported record revenues for the first quarter of 2018, posting a 9% year-over-year to $16.1bn, just over $5.2bn of which coming from the company's high-performing Data Center Group.

While it's likely that Intel has yet to feel the full effect of the recent Spectre and Meltdown debacle, the company said its next quarter is likely to be even stronger.

While the wait continues for a full-scale 10nm processor rollout, Intel confirmed that it would be delivering a new data centre chip based on the process, code-named Cascade Lake, at some point later in the year.

Intel also said it would be introducing a Whiskey Lake processor that would "continue to take advantage of 14-nanometer" technology, also expected in late 2018.

Photo by Bob Riha, Jr. / CC BY 2.0

This article originally appeared at itpro.co.uk

Copyright © ITPro, Dennis Publishing
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