Intel 7nm Delay Forces Major Strategy Shift Amid AMD Pressure
Intel reveals a six-month delay for its 7nm manufacturing process due to a design defect, pushing the timeline a full year behind original expectations. The chipmaker now considers using external foundries to keep products on schedule.
Intel faces a significant setback as it acknowledges a design defect in its 7nm manufacturing process, delaying the transition by six months. This pushback puts the company a full year behind its original internal expectations and raises serious concerns about its ability to compete in the high-end processor market. To compensate, Intel tweaks its existing 10nm process into another iteration and prepares to launch its first 10nm desktop CPU, Alder Lake, in the second half of 2021.
The delay also impacts Intel's highly anticipated Xe GPUs, with the datacenter version now pushed to late 2021 or possibly 2022. In a shocking move for a company known for its massive in-house fabrication investments, Intel reveals it may use external foundries to manufacture its chips. However, this potential shift introduces uncertainty regarding both the pricing of these outsourced chips and Intel's ability to deliver them on time.
Despite these roadmap troubles, Intel reports a strong second quarter with net income of $5.1 billion on $19.7 billion in revenue, largely driven by a 43 percent revenue boost in its Data Center Group. The PC-focused Client Computing Group shows a more modest 7 percent growth, highlighting a reliance on enterprise sales. While CEO Bob Swan predicts record revenues for 2020, the manufacturing delays hand a clear competitive advantage to AMD and its Ryzen lineup.