Will Intel’s Wonder Chip Arrive Too Late?

With Intel's next "wonder chip" slated to arrive in mid-2015, could it end up being too late to take the lead?

Apr 1, 2014 at 8:00PM

Intel's (NASDAQ:INTC) competitive position in the ultra-mobile market continues to improve with each generation. At the 32-nanometer generation with Medfield and Clover Trail, Intel proved that there were no fundamental barriers keeping Intel from penetrating the mobile market (i.e., busting the X86-myth). At the 22-nanometer generation, Intel's parts in both tablets and phones were solidly competitive, particularly on the CPU side of things. The 14-nanometer generation, which should arrive next year, is expected to be the one that "seals the deal."

Intel's 14-nanometer: It's Broxton that matters
By the very end of 2014, Intel expects to launch its very first 14-nanometer mobile processor code-named Cherry Trail. According to Intel's Cara Walker, this part will be aimed at performance and mainstream tablets -- including 2-in-1s and "phablets" -- although it's unclear if Intel's definition of "phablet" is more along the lines of a 7" voice-enabled tablet, or a 5-6" handset.

However, while the Cherry Trail parts should do well in the tablet market, Intel's big hurdle -- and the market that is by far the more important from a growth perspective -- has been the handset market. According to Intel's Investor Meeting, Intel's first truly high-end, "hero device" worthy system-on-chip for phones and tablets is called "Broxton." It will be based on the Goldmont CPU architecture and Intel's next-generation Gen. 9 GPU. It is also targeted at a "mid-2015" launch.

Missing Chip

Source: Intel.

Who are the chief competitors?
Of course, no competitive analysis is complete without a discussion of what the competition will be doing. As of today, Intel's chief competitors in the high-end handset apps processor space are the following:

Samsung is particularly potent given that it also sells about 30% of all smartphones globally and could simply choose to block Intel from competing for that large chunk of the market. Qualcomm is the most aggressive on the chip/integration side of things, and MediaTek is able to very quickly deliver solutions based on off-the-shelf IP.

Fast-forwarding to mid-2015
By the time mid-2015 rolls around, the competitive landscape (in terms of shipping process node from each of these players) should be the following:

  • Qualcomm's MDM9x35 modem built on the 20-nanometer process will ship during the second half of 2014, with a 20-nanometer apps processor with integrated modem likely shipping to customers by Q4 2014 for late Q1/early Q2 2015 device launches.
  • Samsung will likely have a 20-nanometer Exynos part (likely based on ARM's Cortex A57) ready for the Galaxy Note 4 launch in the September/October timeframe, if not for the Galaxy S6 in early Q2.
  • MediaTek, due to its position as a low-cost/high volume player probably will not move to the 20-nanometer node until 2015 after it has matured and costs have come down.

So, this essentially leaves Intel competing with its 22-nanometer Silvermont-based, quad-core Moorefield in phones during the second half of 2014 until the Broxton launch in "mid-2015."

Untitled

Intel's 2014 mobile platforms. Source: Intel.

But what does "mid-2015" mean?
According to Walker, the timelines given at the investor meeting were silicon ship/availability dates. So, "mid-2015" implies silicon availability in the June-August 2015 timeframe. Given that Merrifield was launched in February 2014 and won't appear in devices until May/June, it is likely that Broxton-powered phones won't appear until 3-4 months after silicon launch. This implies a September-November 2015 timeframe.

Merrifield

Intel's Hermann Eul demonstrating Merrifield. Source: Intel.

Realistically, TSMC and possibly Samsung could be in a position to offer top-paying customers 14/16nm FinFET wafers (even if the yields aren't great). For example, the Galaxy Note 5 and the iPhone 6s should both presumably launch in the Sept. 2015 timeframe and are great candidates for 14/16nm FinFET silicon if it is ready but still expensive. Of course, Intel's 14-nanometer process is denser and likely higher performing, but the gap between Broxton and potential Apple/Samsung/Qualcomm FinFET chip implementations may not be as wide as the process availability gap would imply.

So, what's the bottom line?
If TSMC/Samsung can get 16/14nm FinFET designs into shipping devices by Sept. 2015, then Intel's manufacturing lead will have shrunken to less than one generation. If they cannot and those designs are using 20-nanometer silicon, then Intel's lead will actually be quite wide. Also, if Intel can advance to 10-nanometer designs quickly after the 14-nanometer Broxton (i.e., by mid-2016), then that could be the real "winner" while Broxton is merely "very competitive."

Tired of waiting for Intel to deliver in mobile?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers