On Nov. 17, chipmaker Intel (NASDAQ:INTC) formally announced the name of its next-next-generation cellular modem, which is likely to power the iPhones that Apple (NASDAQ:AAPL) launches in 2019. It's called the XMM 7660.
Intel didn't say too much about the modem other than that it'd support download speeds of up to 1.6 gigabits per second -- 60% faster than the XMM 7560 LTE modem that it'll start selling next year.
However, SemiAccurate's Charlie Demerjian managed to learn another crucial detail about the XMM 7660: the manufacturing technology upon which it will be built.
SemiAccurate says 10-nano
Intel's XMM 7360 and XMM 7480 modems, which are found in the iPhones that launched in the fall of 2016 and fall of 2017, respectively, are believed to be manufactured using Taiwan Semiconductor Manufacturing Company's (NYSE:TSM) older 28nm technology.
One of the nifty features of Intel's upcoming XMM 7560 modem is that it'll be the first-ever modem built inside Intel's own factories, which should help boost Intel's profitability on these chips, since Intel doesn't need to pay the markup that a third-party contract chip manufacturer would ask for. It'll also help keep its chip factories utilized.
Moreover, it'll be built using Intel's 14nm technology, which represents a quantum leap in terms of performance and power efficiency over the 28nm technologies used to build the older modems. The migration to 14nm should contribute to a dramatic increase in power efficiency for the XMM 7560 over the older Intel modems.
SemiAccurate says the XMM 7660 will be built using Intel's upcoming 10nm technology, which should deliver another huge improvement in power efficiency.
Why Intel would use 10-nano
To be blunt, I had expected XMM 7660 to be manufactured on a derivative of the company's more mature 14nm technology. This would've meant inferior power efficiency to a product built using Intel's 10nm technology, but it may have been more cost-effective to produce.
Nevertheless, there are good reasons for Intel to opt to use 10nm for XMM 7660, though. The obvious benefit is power efficiency, which is extremely important for a chip that's primarily designed to go into battery-constrained devices like the iPhone.
In addition, a chip built in Intel's 10nm technology should have a substantially smaller physical footprint than a chip built using Intel's 14nm technology, all else being equal. Since iPhones are also space-constrained, a smaller chip is a better chip -- again, all else being equal.
The only potential downside to Intel's using its 10nm technology for the XMM 7660 instead of its 14nm technology is potential manufacturing technology maturity. Intel's 14nm technology has been in production for years, so Intel can reliably supply tens, if not hundreds, of millions of chips built using that technology per year at a great cost structure.
Intel's 10nm technology, on the other hand, has gone through something of a troubled development cycle. It was originally supposed to go into mass production at the end of 2015 for product availability in 2016, but the schedule continued to get pushed out.
Intel now expects the first products built using its 10nm technology to ship in limited quantities by the end of the year, with more substantial volumes shipping during the second half of 2018.
The good news is that the XMM 7660 doesn't need to be ready to ship in mass quantities until the first half of 2019 for the iPhone launch in the second half of 2019. Intel's 10nm technology should be in reasonable shape by that point, which means that it comes down to Intel's ability to finish the design of the XMM 7660 and get it through the grueling wringer of carrier certification in time.
Since Intel was able to get XMM 7360 and XMM 7480 out in time and since XMM 7560 seems to be on track, I'm optimistic about the odds that the XMM 7660 will be a success for Intel, too.
Ashraf Eassa owns shares of Intel. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.