Intel stock dives, investors ‘frustrated’ by new manufacturing defects
Intel shares plunged Thursday after the company reported serious manufacturing problems with its next generation of microprocessor. The company suggested it might turn to its rivals to make new chips if Intel cannot make them in its own factories.
Intel said it is a year behind in developing its forthcoming 7-nanometer processors, an ominous sign after the company suffered years of delays producing its current generation of 10nm chips. The latest problems will result in a six-month delay in bringing the 7nm technology to market, according to Intel, which is now due late in 2022 or early 2023.
Investors were blindsided and Intel’s stock slid 10% in after-hours trading.
Intel touted strong second-quarter results – sales were up 20% despite the pandemic, well ahead of Wall Street expectations. But investors focused on the bad news about the 7nm chips and nearly every question on the company’s quarterly analyst call was about Intel’s manufacturing woes.
Intel develops each new generation of chip technology at its Ronler Acres campus in Hillsboro, advancing computing power on a regular cadence called “Moore’s Law.”
The term, coined by Intel founder Gordon Moore, predicts exponential growth in computing power on a dependable timetable – driven by improvements in manufacturing technology that enable smaller features on each new generation of chips.
As those features approach the atomic level, though, it becomes more difficult to deliver those regular improvements. It’s a challenge every company has been facing but Intel competitors – especially contract manufacturer Taiwan Semiconductor Manufacturing Co. – don’t seem to have run into the same problems Intel has.
Last month, Apple announced it is dumping Intel chips from its Mac lineup of PCs and laptops. Continued production problems could prompt other manufacturers and data center operators to do the same.
On Thursday, Swan said Intel has developed “contingency plans” to outsource production of new chip designs to other manufacturers if it cannot deliver its own technology. It’s a humbling admission from a company that long cherished its title as the world’s most advanced chipmaker.
The war between wetware and hardware.
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Whilst that may be true, I'll bet that my five-year-old AMD FX8350 8 core based PC kicks the crap out your puny, overpriced Intel piece of shit. I've built four of these for people and they're all still going strong.