Intel Corp. Chief Financial Officer George Davis made comments at a Morgan Stanley investor conference Monday about the impact of the coronavirus outbreak to the company's operations as well as the company's lag in the chip making process techniolofy compared to competitors.
Davis said that that the company has found itself with "the ability to operate on a relatively normal basis." Asked about the impact the company was feeling from the coronavirus outbreak, Davis outlined that the company has NAND manufacturing plants in Dalian, China, a test and packaging facility in Chengdu, and design centers in centers in Shanghai and Beijing. The company also has corporate groups in Beijing.
Davis said Intel is "starting to see customers being impacted" by the situation as those businesses try to manage their own supply chains. While Davis said that Intel is operating in a relatively normal fashion, he also noted that the company was "coming into this environment from a shortage perspective" as it wasn't able to meet all customer demand toward the end of last year.
Davis also said that although it is currently "in the 10nm era," the company would catch up with compatitors by the end of 2021, when it will release chips baed on the 7nm node. Davis also said that Intel wouldn't regain process leadership until it produces the 5nm node sometime in the future.
Currently, Intel's 10nm chips are the Ice Lake series as well as networking ASICs. Discrete GPUs and Ice Lake Xeons are expected to be released soon. Intel is also continuing its inter-node development policy, which consists of "+" revisions to existing processes. Davis said the 10nm inter-node step provides a "step-function move" with the Tiger Lake chips based on the 10nm+ process as the company awaits its 7nm process.
However, Davis noted that even the 10nm+ process node still lags behind competitors, stating:
"So we bring a lot of capability to the table for our customers, in addition to the CPU, and we feel like we're starting to see the acceleration on the process side that we have been talking about to get back to parity in the 7nm generation and regain leadership in the 5nm generation."
Intel's 10nm process provides comparable density to TSMC's competing 7nm process.
Davis says Intel will offer differentiated platform-level solutions, which will includes tight hardware integration on the AI and software fronts, but he also noted that the company's 10nm node won't be as successful as Intel's prior nodes:
"As we said back at our analyst day in May of 19: Look, this isn't just going to be the best node that Intel has ever had. It's going to be less productive than 14nm, less productive than 22nm, but we're excited about the improvements that we're seeing and we expect to start the 7nm period with a much better profile of performance over that starting at the end of 2021."
Davis also talked about the impacts of 10nm on the company's gross margins: "...but the fact is that I wanted to be clear what was happening during the 10nm generation. The fact is, it isn't going to be as strong a node as people would expect from 14nm or what they'll see in 7nm."
"Also, we were at a time when in order to regain process leadership we had to accelerate the overlap between 10nm, 7nm, and then 7nm and 5nm, so the cost that you're absorbing, starting in particular in 2021, you’ve got this intersection of the performance of 10nm, the investment in 7nm, and were also well into starting the investment in 5nm: All of those elements just combine to impact gross margin."
Rival TSMC should be on the 3nm node in late 2022.