INTEL DELAYS 7NM CHIPS, AGAIN

And it may need help building them

INTEL’S PROBLEM going beyond the 14nm Skylake processor to 7nm parts shows no sign of ending, as the company has pushed the release date back another six months, to late 2022, or early 2023. The project is now a full year behind schedule. Apparently the yield rates are terrible, although Intel says that it has analyzed the situation and that there is no “fundamental roadblock.” It can fix this. It also said that it has “contingency plans.” This means more stress on 10nm parts (lackluster, and way behind schedule too), and the “backport” of 10nm designs to 14nm for the desktop.

Intel’s CEO, Bob Swan, said that the company will be “pretty pragmatic” about who makes its chips in the future. If Intel can’t get its own fabrication plants working smoothly at 7nm, it will have to go elsewhere. Intel has used other manufacturers before, but only for specific minor parts. If its plants can no longer handle the heavy lifting, this is not good news. Meanwhile, TSMC has started making 5nm parts, and has plans for 3nm by 2023. The announcement caused a significant jitter in stock prices—within hours Intel stock dropped 16%, and TSMC (makers of AMD’s 7nm Ryzens) gained 10%.

Before we get too downbeat, this is Intel, a company with massive resources, superb engineers, and world-class technologies. Its numbers are still solid, including a highly profitable data-center business. It remains to be seen if it can fix its foundries. The danger is that if it falls too far behind then the manufacturing side will begin to drag.

Within Intel some important, and expensive, decisions need to be made. Does it maintain a top-level manufacturing ability or not? Its previous success has been built around being an IDM—integrated device manufacturer—going from design right through to final sale on its own. Intel won’t be in any hurry to change that. Being pragmatic about exactly who makes what can only help in this difficult transition.