Both Silicon Valley chip makers Intel and GlobalFoundries issued statements in recent weeks that reasserted their support for the 14 nanometer standard for integrated circuits on which the 9th Gen Intel processorsOpens a new window are based. Aimed at visual content creators and gamers, the chips are indicative of an applications-specific approach that is shaping chip development.
Demand for 9th Gen High Despite Impending Chip Launch
Rising orders from the users and makers of machines from the desktop to the datacenter were cited by both companies as the source of demand and the rationale behind the dedication of production resources to existing technologies, despite the approaching launch of 7nm chips from rival producers that are due to hit the market next year.
In a note to customers and partners published at the end of last month on Intel’s website, interim CEO Paul Swan stated that the company has seen purchases from cloud operators grow by 43% in the first six months of 2018. The demand for chips for data-centric applications pushed year-on-year sales 25% higher in the same period.
With PC sales in the second quarter displaying growth for the first time in six years, Intel expects gaming and commercial systems to underpin sales growth over the full year, according to GartnerOpens a new window . That figure was revised upward by $4.5 billion in July from forecasts issued in January.
At GlobalFoundries, which white-labels chips for a host of makers, CEO Tom Caulfield announced at the end of August that his company was putting 7nm on indefinite hold and instead directing money and manpower to boosting 14nm production capacity.
Rivals Gain as Customers Turn Away from 7nm
According to Caulfield, the manufacturing freeze is a response to fewer customers designing for the ‘outer limits of Moore’s Law’, a caveat credited to Intel founder Gordon Moore that long has guided the industry regarding processing power and price. Instead, he said, they are seeking to leverage their investment and extend the longevity of 14nm designs.
Part and parcel of that move is GlobalFoundries wrap-up of the Applications-Specific Integrated Circuit divisionOpens a new window (and the intellectual property it oversees) into a dedicated subsidiary that will work with clients to create ‘connected intelligence’ for device-driven 5G communications and Internet of Things applications.
The 7nm about-face plays into the hands of rival Asian chip makers who stand to gain from investments in production of shorter standards. California’s AMD, a GlobalFoundries customer for 14nm chips, is working with Taiwan’s TSMC to supply the chips for the 7nm CPUs and GPUs intended for launch in 2019.
Apple and Huawei also source chips from TSMC, and Samsung also reportedly remains committed to producing at the smaller standard for its phones and other devices, as well as for third-party makers.
As Production Gets Into Line, Doubts Surface
For Intel, the reliance on 14nm is the cost of repeated delays in the production of the 10nm chip that, since 2014, has been a contender in theory only. Among other difficulties, delays were due to struggles around the lithography that’s used to etch circuits into layers of silicon, and ultimately foretold the departure of former CEO Brian Krzanich in June.
To meet the demand, including in datacenters and entry-level PCs, Intel is prioritizing production of Xeon and Core lines. A portion of the company’s record $15 billion in capital expenditures this year will increase 14nm capacity at facilities in the US, Ireland and Israel.
It can’t happen to soon, if press reports are to be believed, with industry-focused sites and bloggers calling into question the company’s ability to provide 14nm chips for serversOpens a new window and motherboardsOpens a new window in recent weeks.
In launching the 9th Gen chips, it also stressed application-specific use cases for the standard, including for the 130 million ‘creator segment’ in the US, UK and China that use primarily desktop machines to produce the content consumed by gamers and viewers.