The Meteor Lake chip may be Intel's (INTC -0.80%) most innovative product in years. It's also crucially important for both its PC chip business and its foundry business.

When it begins shipping in December, Meteor Lake will be Intel's first tile-based PC chip. By manufacturing portions of the CPU separately and then stitching them together, Intel can use the most logical manufacturing process for each tile. This requires advanced packaging technology in the form of Intel Foveros. Meteor Lake will be the largest-scale use of Foveros thus far.

Meteor Lake could help resuscitate the sluggish PC industry thanks to its built-in AI hardware. Each chip will contain a neural processing unit capable of running AI inference workloads directly on the device. This opens the door for AI-powered features that don't require calling out to a cloud-based service. Beyond AI, the chip is designed to be extremely power efficient, which should help boost the battery lives of laptops.

For Intel's foundry business, Meteor Lake will demonstrate that Intel can bring new manufacturing processes to volume production when it says it will. The compute tile will be built on the Intel 4 process, the second of five process nodes Intel plans to launch by the end of 2024. Intel 3, Intel 20A, and Intel 18A will follow.

Until now, Meteor Lake appeared destined to be a mobile-only part. Intel is expected to launch a refresh of its Raptor Lake desktop processors in October. This refresh, which will likely bring only small performance gains, won't change much about the PC chip market. The original Raptor Lake beats out chips from rival AMD for the most part, so an iterative update makes sense.

However, it now appears that Intel will bring Meteor Lake to desktops after all. Speaking to PC World, Intel's client computing chief confirmed that Meteor Lake desktop chips are coming in 2024.

Battling AMD

While Intel's Raptor Lake chips have been a success, AMD is expected to launch its Ryzen 8000 series sometime in 2024. These new chips will use the company's Zen 5 architecture, which should bring meaningful performance and efficiency improvements. The move to a more advanced manufacturing process from TSMC will also help the cause.

Intel's next-gen Arrow Lake processors likely won't be coming until the end of 2024, given that they'll be built on the Intel 20A process. Arrow Lake has the potential to be a powerhouse, but AMD will almost certainly launch its Ryzen 8000 chips earlier in the year. Without something in between the upcoming Raptor Lake refresh and Arrow Lake, Intel would risk AMD stealing the spotlight for a big chunk of 2024.

Meteor Lake desktop chips would provide an alternative to Ryzen 8000 chips. They would also bring Intel's dedicated AI hardware to desktop systems, expanding the user base and potentially compelling more software providers to support the new hardware. It's unclear whether Intel plans to launch Meteor Lake desktop chips that span the full gamut of performance or will instead focus on power-efficient midrange chips. Recent rumors suggest that Meteor Lake chips will only find their way into all-in-ones and mini PCs. But either way, this move will make Intel more competitive in the lead-up to Arrow Lake.

The PC market is in the process of bottoming out after a severe post-pandemic correction. However, 2024 should be better than 2023 for the industry, and Intel will now have Meteor Lake chips for both laptops and desktops to ride the recovery.