Intel's 10-Nanometer Challenges Spell a Tougher Fight Against AMD and Others

A lot has been written over the last few months about the implications of the 7-nanometer (7nm) manufacturing process setback that Intel (INTC) disclosed in July -- a setback that Intel says will push back the launch schedule for its first 7nm PC and server CPUs by about 6 months, and which is widely seen as a boon for AMD (AMD) and Taiwan Semiconductor (TSM) .

Less has been written, however, about the ongoing challenges Intel seems to be having in migrating its CPU lineup to its 10nm process node from its age-old 14nm node, which for the moment is still used to make all of its desktop and server CPUs and some of its notebook CPUs.

Intel's Current and Expected 10nm CPUs

Following multiple delays, Intel launched its first 10nm notebook processor line (codenamed Ice Lake) in the second half of 2019, and followed that up two months ago with a second-gen 10nm notebook processor line (codenamed Tiger Lake) that delivers healthy CPU performance gains and major integrated GPU gains. The company has also launched a 10nm 5G base station processor (the Atom P5900) and its 10nm Agilex FPGA line.

However, while Ice Lake and now Tiger Lake processors have gone into many mainstream thin-and-light notebook designs, the fact that the chips have at most 4 CPU cores has generally prevented them from being used within gaming and workstation notebooks. For such systems, Intel is still selling 14nm processors -- specifically, its Comet Lake-H line, which was launched in April and scales up to 8 cores. Tiger Lake-H processors featuring up to 8 CPU cores appear set to launch in the first half of 2021.

Meanwhile, Intel's first 10nm desktop CPUs -- part of a next-gen platform for both notebook and desktop processors that's codenamed Alder Lake -- aren't due to arrive until the second half of 2021.

In the interim, Intel plans to launch yet another 14nm desktop CPU line -- it's codenamed Rocket Lake-S and appears to deliver healthy per-core performance gains relative to Intel's current Comet Lake-S desktop CPU line. But Rocket Lake-S only scales up to 8 cores, 2 less than Comet Lake-S and 8 less than AMD's 3rd and 4th-gen Ryzen desktop CPU lines.

As for the server CPU market, CEO Bob Swan disclosed on Intel's Q3 earnings call that his company's first 10nm server CPU line (also known as Ice Lake) is now expected to see its volume ramp begin in Q1 2021. Ice Lake server CPUs were previously set to arrive in Q4, and before that were due in the first half of 2020.

Also: When asked about Intel's second-gen 10nm server CPU line (codenamed Sapphire Rapids), which was said in July to be due in the second half of 2021, Swan suggested it wouldn't begin shipping until the end of 2021.

High Core Counts, High Clock Speeds, Reasonable Power (Pick Two)

As it is, Intel's 10nm CPU launch schedule spells a tough fight against AMD, which is in the midst of rolling out its second generation of PC and server CPU lines to rely on TSMC's 7nm node (competitive with Intel's 10nm node), which contain CPU cores based on a new microarchitecture known as Zen 3. AMD unveiled Zen 3 desktop CPUs in October, plans to reveal Zen 3 server CPUs (codenamed Milan) later in Q4, and might reveal Zen notebook processors at CES in January.

However, things look messier still for Intel when one goes over the technical details that have been disclosed and reported about its upcoming 10nm products.

There's an old saying among software developers: Fast, good and cheap: pick two. Along similar lines, it seems that when designing 10nm CPUs, for now at least Intel has to choose 2 out of 3 desirable features: High core counts, high clock speeds and reasonable power consumption.

The Tiger Lake notebook processors Intel has launched to date have reasonably-low power consumption and (with the help of Intel's SuperFin transistor technology) decent clock speeds, but top out at 4 cores. And while the upcoming Tiger Lake-H line is expected to include 8-core CPUs, the chips are also expected to feature relatively high thermal envelopes (TDPs) of 45 watts.

AMD doesn't have to make the same tradeoff, at least not to the same extent. While the company's Ryzen Mobile 4000 notebook processor line does include H-series parts with 45-watt and 35-watt TDPs, it also includes 8-core processors with 15-watt default TDPs. It's a safe bet that the same will also be true for AMD's upcoming Zen 3 notebook processors.

Intel's 10nm Alder Lake desktop CPUs are expected to pair powerful CPU cores that will presumably sport high clock speeds with low-power cores, with up to 8 of each reportedly included on a chip. While such an architecture is a common sight in smartphone/tablet processors and (due to its battery life advantages) could make sense for some notebook processors, using it for desktop CPUs -- rather than simply packing high-performance cores, as both Intel and AMD's desktop CPUs do today -- is more questionable.

Either way, if the most powerful Alder Lake CPUs do top out at 8 high-performance cores, that would respectively give them 4 and 8 fewer such cores than AMD's most powerful Zen 3 desktop CPUs: The 12-core Ryzen 9 5900X and the 16-core Ryzen 9 5950X. Moreover, Alder Lake's arrival could be shortly followed by the launch of AMD's first Zen 4 desktop CPUs, which will rely on TSMC's newer 5nm node and might arrive in early 2022.

Intel's Ice Lake server CPUs, by contrast, will scale up to at least 28 CPU cores (AMD's server CPUs, it's worth noting, go up to 64 cores) and appear to have power consumption that's within the bounds of what server CPUs typically draw. But since the CPUs won't feature SuperFin transistors, clock speeds could be relatively low, just as they were for Intel's Ice Lake notebook processor line.

Sapphire Rapids server CPUs will contain SuperFin transistors, and it's possible that they also leverage some of Intel's recent packaging technology advances. But based on Swan's latest comments, Sapphire Rapids' shipment ramp might happen around the same time as that of AMD's Zen 4/5nm server CPUs (codenamed Genoa), which should deliver core density, clock speed and power efficiency improvements.

The Big Picture

In the wake of its 7nm manufacturing setback, markets are understandably on edge about how competitive Intel's CPU lineups will be in 2022 and beyond -- at least unless it's able to shift much of its CPU production to foundries such as TSMC, a move that would inevitably carry a large margin hit.

However, the challenges Intel is seeing in the interim when it comes to launching 10nm PC and server CPUs that strike the right balance between core counts, clock speeds and power consumption shouldn't be ignored either. Those challenges are already making things tougher for Intel in its battles against AMD and various developers of Arm-based CPUs, and it doesn't look as if things will get any easier in 2021.

At the time of publication, Action Alerts PLUS, which Jim Cramer co-manages as a charitable trust, was long AMD