In announcing a six-month delay on its transition to 7nm products, Intel is doing its best to keep things moving—tweaking 10nm processors into another ‘+’ iteration, pushing out 10nm desktop CPUs, and announcing delays for its first Xe GPUs for the datacenter, too.

In order to keep products on schedule, Intel may even manufacture them using external foundries—shocking news for industry watchers well-acquainted with Intel’s massive fab investment. Still, the shift could affect those chips’ pricing, and it’s uncertain whether Intel can deliver them on time.

Intel dropped several bombshells on Thursday. First, it acknowledged that a design defect in its 7nm manufacturing process will delay the transition from the current 10nm process to 7nm by six months, or a full year past its original internal expectations. Second, Intel expects to deliver its first 10nm desktop CPU, Alder Lake, in the second half of 2021. Third, the company said that it will delay its first Xe GPU for the datacenter until late 2021 or even 2022. Intel gave no guidance on its consumer GPU plans.

intel ceo bob swan Intel / YouTube

Intel CEO Bob Swan tried to position Intel’s quarter in the best possible light, while being pragmatic about its future roadmap.

Intel’s strong quarter belies a weaker outlook

During its second quarter earnings call, Intel delivered solid revenue that exceeded expectations. Overall, Intel beat analyst projections compiled by Yahoo Finance, with overall net income of $5.1 billion (up 22 percent from a year ago) on revenue of $19.7 billion (up 20 percent year over year). Intel’s Data Center Group (DCG) and its Xeon chips were responsible for the better-than-expected results, however. DCG reported 43-percent revenue growth and overall revenue of $7.1 billion. The PC-centric Client Computing Group reported just 7-percent revenue growth, for a total of $9.5 billion.

“It’s more and more Intel silicon, inside more and more computers, so we can have a larger impact on our customers’ success,” chief executive Bob Swan said during a call with Wall Street analysts on Thursday,

For 2020, Swan predicted that Intel would still enjoy record revenues of as much as $75 billion. Most of that revenue will be recorded in the first half (an odd reversal from Intel’s traditional strength during the holiday season), and most will come from additional investment Intel’s making in its current 10nm processors, with unit shipments increasing more than 20 percent versus Intel’s January expectations.

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That, in turn, means that Intel now has the capacity to address the low-end market it had abandoned during several quarters, where CPU shortages caused it to prioritize the “many core,” premium CPU market. Intel chief financial officer George Davis said PC-centric sales were up 2 percent from a year ago on strong notebook demand. Intel predicts that trend will continue into the second half—even as a more competitive environment forces lower prices.

intel tiger lake announcement ces 2020 Intel

Next up for Intel: Tiger Lake.

Here’s what part of Intel’s roadmap looks like over the next two years. Intel’s Swan said that its next-gen Tiger Lake chip, which it announced in January, will ship in the next few weeks. Its first 10nm Tiger Lake chip for servers is also due before the end of the year.



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