Intel's CFO George Davis presented at the Morgan Stanley's TMT conference and had a refreshingly honest and candid discussion with analysts about the 10nm process. The company revealed that it's planning to push out 10+ process this year but also warned that while it is almost certainly in the 10nm era now, 10nm as a node "just isn't going to be the best node that Intel has ever had" and will actually be less productive than 22nm. That said, George mentioned that Intel has been completely unaffected by the Coronavirus (considering it's based primarily in the US) and still has excess demand waiting to be fulfilled.
Intel CFO tampers expectations in refreshingly honest disclosure: 10mm just isn't going to be the best node that Intel has ever had, less productive than 14nm and 22nm
He also further mentioned than 10nm server parts are going to be landing this year as well - dispelling any myths about 10nm still being in limbo. Intel has been increasingly candid about the state of business (or manufacturing in this case) - an attitude that be traced back to Intel's CEO Bob Swan. Before we go any further, here is the relevant portion (transcribed by yours truly):
[question asked about state of 10nm]
We are definitely in the 10m era and we launched Ice lake client at the end of last year. We have GPUs coming out -uh- a discrete GPU coming out this year. We have networking ASIC, obviously - at the end of the year. We have the server SKUs coming out on 10 -uh- interestingly and indicative of how we are approaching process technology going forward, we also have 10+ coming out this year.
And what we said is it is important to launch a new node as it is to launch intra node Improvement every year and so we will have we have our Tiger Lake client product coming out. It's going to be on our 10+ node. And so I've been told by our client team that I'm not allowed to talk about how much incremental performance is going to come out of that. But there's the idea is to have a step function moved without having to wait for 7nm in between those and we'll be able to talk about that as - since it's hard to find a conference where we've been able to talk about some of these things which we were planning on doing - but we'll get the information out.
[incomprenhesible comments about 10nm from audience]
Yeah. Yeah, but they're not they're not gonna let me talk about it first.
You know the right people doing the hard work on the product will talk about [it] but so you know, I feel like we're in that 10nm node era. It's important that we're continuing to see yield improvements rate-ably over the time period but as we said back in our analyst day in May of 19 look, this just isn't going to be the best node that Intel has ever had it's going to be less productive than 14 [nm], less productive than 22 [nm] but we're excited about the improvements that we're seeing and we expect to start the 7nm period and at a with a much better profile of performance over that starting at the end of 21.
This is something that enthusiasts have discussed for a long time while Intel's 10nm was stuck in limbo a year or so ago. Because 7nm is an EUV-based process, it will act as a sort of reset in difficulty and will actually be much easier to achieve (relatively) than the costly 10nm process. A lot of people suggested that Intel should just move directly to 7nm but since the transition to 7nm is not affected by the transition to 10nm and considering the company has ample cash, it makes sense for 10nm to be a sort of transitionary node while Intel gathers its bearings again.
The good news for investors here is the dispelling of uncertainty and knowing exactly where Intel stands: 10nm is going to be out properly this time, but don't expect it to be as productive as 14nm. This can probably be interpreted as not only the incremental performance gains that you get by shifting to a lower node but also (edit: the question by the audience immediately before the reply clarified the context - George is talking only about gross margin here) the financial profile (10nm is definitely going to cost Intel a pretty penny). Another silver lining here is the company remains on track to transition to 7nm by 2021 and has been relatively unaffected by the global slowdown the Coronavirus catalyzed.
