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Intel Says It Fixed 7nm Process, but Will Still Outsource Some Parts

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Intel isn't giving up on making its own chips. The company reported its fourth quarter earnings today, with incoming CEO Pat Gelsinger and Omar Ishrak, Chairman of Intel's board, joining outgoing CEO Bob Swan on the call. Intel posted yet another strong quarter and record year, but the promised update on its 7nm process and outsourcing strategy, which will see the company contract out production of some of its leading-edge products for the first time in its history, hung thick in the air.

Incoming Intel CEO Pat Gelsinger spoke on the call, saying that he has personally reviewed progress on the company's 7nm process over the last week and that he is pleased with the "health and recovery of the 7nm program." Gelsinger also said that, given the breadth of the company's portfolio, Intel will expand its use of external foundries for some products. However, he is confident that the majority of Intel's 2023 CPU products will come from the company's own factories. The company plans to share more details after Gelsinger takes the helm in February. 

Notably, the 2023 timeline is still delayed relative to Intel's original timeline for its 7nm process, but is in line with the six-month delay the company outlined when it announced that its 7nm process was broken. Gelsinger noted that while his cursory 7nm investigation took place over the last week, it's based on data collected over the last six months as Intel investigated the yield issues. 

Intel CEO Bob Swan weighed in with more details, saying that the company's yield issues with the 7nm process stemmed from difficulties with a sequence of steps in the company's production process, which introduced defects. "By rearchitecting these steps, we have been able to resolve the defects," Swan said. Swan also said that the company has simplified and streamlined the 7nm process to better ensure that the company can deliver on its 2023 roadmap, implying there may be some significant changes to 7nm's performance and/or design targets. 

Intel chips based on the 7nm process will debut in 2023, with client processors coming in the first half and server products following. That timeline still leaves Intel's competitors, like TSMC and Samsung, with a process node advantage in the 2023 time frame. TSMC projects it will be in full production of its 3nm node in 2023, explaining Intel's continued need to outsource some products. Intel plans to leverage its packaging technology and disaggregated design philosophy to integrate externally-produced chips into its own products. 

Gelsinger also said the company remains committed to re-establishing its lead in process node technology, saying he's "not interested in closing the gaps...but being the unquestioned leader in process technology." 

Swan also reiterated the company's commitment to preserving its IDM advantage, echoing his comments in our recent interview, meaning the company will still focus on producing its own chips in-house. Intel's CFO also said the company is increasing its spending on 7nm tooling for internal production. 

Gelsinger noted that the company wouldn't share its detailed plans until after he takes the CEO position next month. Gelsinger commented that he will make key leadership changes and that other leaders will come back to the company, much like the news that Glenn Hinton has re-joined Intel

Gelsinger also commented that "we are committed to innovation and delivering the best products in every market we compete in." Gelsinger says his overhaul of the company will focus on four key areas: Leadership products, 'maniacal execution,' innovation, and restoring the "transparent, data-driven culture" cultivated by former Intel CEO Andy Grove. 

The company is also delaying its full-year outlook until its next earnings call. Intel's press release also indicates that the company has quadrupled its '10nm supply unit growth', which has long been plagued by low yields, but didn't provide a frame of reference as to how much actual 10nm volume is in production.

Paul Alcorn

Paul Alcorn is the Deputy Managing Editor for Tom's Hardware US. He writes news and reviews on CPUs, storage and enterprise hardware.

  • Makaveli
    The timing of this is a little too convenient just before the new CEO is taking over to spin some positive light. After taking a beating in 2020 from AMD.

    And don't get me wrong I have faith in PAT he looks like the man for the job and will right the ship.

    I'm just going to hold my judgement on 7nm from Intel until I see it.
    Reply
  • Gurg
    Makaveli said:
    After taking a beating in 2020 from AMD.
    TH "Intel reported its fourth quarter 2020 earnings today, marking a stronger-than-expected quarter and the fifth consecutive record-breaking year, largely propelled by sales of PC chips. ""Intel's earnings beat expectations as the company enjoyed record revenue for the fifth straight year. The company's client, data center, memory, and mobileye businesses all set revenue records. "Intel's PC sales were powerful, with the company noting that it sold 33% more PC chips than it did the year prior. "
    Meanwhile AMD market share took a dive in both CPUs and GPUs at end of 2020 in Steam Hardware Survey. https://store.steampowered.com/hwsurvey/
    LOL That is a beating Intel stockholders want every year!
    Reply
  • Math Geek
    i'm inclined to believe this report since they are staying with the 2023 release. if they all of a sudden claimed they would be out in 6 months, i'd be waving my BS flag all over the place. but figuring out the problem was eventually going to happen. seems they may know how to fix it now and if they don't rush it, they may have 7 nm ready to go by the time, everyone else is on 3 nm.

    but if they can bring some ipc gain and much lower power draw, then they'll still be good to go. look at what they can still do with 14nm which other than the crazy high power draw, is still good performance.
    Reply
  • watzupken
    I think the question is how much compromise do they need to accept to bring 7nm past the finish line. I don't believe this was the same 7nm which they envisioned many years back.
    Reply
  • watzupken
    Gurg said:
    TH "Intel reported its fourth quarter 2020 earnings today, marking a stronger-than-expected quarter and the fifth consecutive record-breaking year, largely propelled by sales of PC chips. ""Intel's earnings beat expectations as the company enjoyed record revenue for the fifth straight year. The company's client, data center, memory, and mobileye businesses all set revenue records. "Intel's PC sales were powerful, with the company noting that it sold 33% more PC chips than it did the year prior. "
    Meanwhile AMD market share took a dive in both CPUs and GPUs at end of 2020 in Steam Hardware Survey. https://store.steampowered.com/hwsurvey/
    LOL That is a beating Intel stockholders want every year!
    I think it is not a good comparison just looking at Steam's hardware survey to conclude that AMD is losing steam. To be fair, PC sold very well in 2020, which Nvidia and AMD have also confirmed. So if Intel is not making a record profit, then something is terribly wrong.

    The problem with AMD however is that they can barely produce enough CPU and GPU to satisfy demand. Since the Ryzen 5000 series start with a fairly significant premium over the older 3000 series, the shortage just made the prices go through the roof, further making things worst in a sense there is no stock and prices are too high. Both these contributed to a lower demand.
    Reply
  • jasonf2
    Intel leaves itself in good position by locking up the fab volumes, regardless of what they make with it. AMD is dependent on TSMC production. TSMC isn't going to build additional capacity knowing Intel is a short term game. So AMD is left with quantity issues in the near term. Intel is bringing back star players in key leadership positions and from the looks of it is going to give those keys the resources they need to reestablish performance dominance. AMD's magic right now is a process node advantage that they neither own, control or created. Intel still has managed to maintain near parity on 14nm which is really pretty impressive all things considered. Assuming that Intel gets its process nodes online the designs are already there to maintain parity or pull back into the lead. Unfortunately for them 10nm is pretty much DOA for Intel because they simply took too long. Parity or a minor IPC lead isn't going to be the target though. We are in for a wild ride in the next three years as AMD continues to drop the hammer trying to mitigate Intel's response. Intel's response, though delayed, plays out much like the Nehalem response to Athlon 64 that reestablished the baseline computing experience for the following decade. Intel's major problem was abandoning tick, tock. The people they are bringing back established it in the first place. This plays out well for X86 in a time where ARM continues to threaten its PC dominance. The next three years are going to be exciting release cycles on both sides. Intel is going to going to trail moderately for the next 18-24 months and then things are going to get interesting.
    Reply
  • quadibloc2
    I'm glad to hear that they feel they have fixed their 7nm process, which I presume is equivalent to everyone else's 5nm, just as their 10nm process is equivalent to everyone else's 7nm. Given the shortages of Nvidia and AMD product, if Intel tried to rely on TSMC and/or Samsung, their products would be unobtainable too. But if they can produce chips themselves on an advanced process in quantity, they could have a key advantage, at least for a while.
    Reply
  • digitalgriffin
    Gurg said:
    TH "Intel reported its fourth quarter 2020 earnings today, marking a stronger-than-expected quarter and the fifth consecutive record-breaking year, largely propelled by sales of PC chips. ""Intel's earnings beat expectations as the company enjoyed record revenue for the fifth straight year. The company's client, data center, memory, and mobileye businesses all set revenue records. "Intel's PC sales were powerful, with the company noting that it sold 33% more PC chips than it did the year prior. "
    Meanwhile AMD market share took a dive in both CPUs and GPUs at end of 2020 in Steam Hardware Survey. https://store.steampowered.com/hwsurvey/
    LOL That is a beating Intel stockholders want every year!

    Intel lost market share in EVERY market segment. mobile, cloud, server, pc. Their margins are down per chip. And now they lost the performance crown in their last stronghold gaming. (I'm reserving judgement on rocket lake till it's in reviewers hands)

    The ONLY reason for record profits is because everyone and their cousin are sucking up what pc parts they can. Even AMD has had record profits. And the only reason why AMD isn't selling more is because of capacity limitations.

    I don't know about you, but I would call that a beating. When covid is done in 9 months due to the vaccine sales will return to normal.
    Reply
  • digitalgriffin
    Math Geek said:
    i'm inclined to believe this report since they are staying with the 2023 release. if they all of a sudden claimed they would be out in 6 months, i'd be waving my BS flag all over the place. but figuring out the problem was eventually going to happen. seems they may know how to fix it now and if they don't rush it, they may have 7 nm ready to go by the time, everyone else is on 3 nm.

    but if they can bring some ipc gain and much lower power draw, then they'll still be good to go. look at what they can still do with 14nm which other than the crazy high power draw, is still good performance.

    14nm is out of legs. Rocket lake is a step backwards in terms of total performance from early reports because it only had 8 cores. They are just out transistor budget to make things faster.
    Reply
  • Makaveli
    Gurg said:
    TH "Intel reported its fourth quarter 2020 earnings today, marking a stronger-than-expected quarter and the fifth consecutive record-breaking year, largely propelled by sales of PC chips. ""Intel's earnings beat expectations as the company enjoyed record revenue for the fifth straight year. The company's client, data center, memory, and mobileye businesses all set revenue records. "Intel's PC sales were powerful, with the company noting that it sold 33% more PC chips than it did the year prior. "
    Meanwhile AMD market share took a dive in both CPUs and GPUs at end of 2020 in Steam Hardware Survey. https://store.steampowered.com/hwsurvey/
    LOL That is a beating Intel stockholders want every year!

    lol calm down.

    The size different between these two companies is public information, I know intel makes more money than AMD as they should considering how much difference there is in market share.

    Competition is good my friend be water :)
    Reply