At the Intel (INTC +4.96%) Developer Forum in Shenzhen, China, the company held a very informative presentation titled "Tablet Evolution: Winning With Intel Platforms," within which the company essentially tried to convince the audience (which consisted of everybody from industry observers to hardware partners) of why Intel-based solutions are superior for tablets. While the presentation was informative, it is important for investors to look underneath some of the glossy marketing statements to get to the truth.
A 3.5-year lead thanks to the 22-nanometer process?
Take a look at the following slide from the presentation:
Source: Intel.
This slide gives investors a rough idea of what Intel's plan for future products looks like. The chart doesn't offer too much that's new other than saying that as the product generations roll on, Intel's competitive positioning will continue to improve. However, direct your attention to the very first bullet point in the box (boxed in for the reader's convenience).
Here, Intel is claiming that it has a "3.5 year" on 22-nanometer tri-gate. While it is technically true that Intel shipped its first commercial 22-nanometer tri-gate based products in late 2011, and while it is also true that competitors are likely to ship their first FinFET-based (this is the non-marketing term for tri-gate) designs in late 2015/early 2016, this does not imply that Intel was able to capitalize on this lead in mobile as suggested in this slide.
What do you mean?
The very first tri-gate products were launched in April 2012, but these were notebook and desktop PC chips, not anything intended for tablets or smartphones. Indeed, Intel's very first 22-nanometer tablet parts were launched in September 2013, and its first smartphone parts launched in February 2014 (although still no word on actual commercial availability of devices based on that platform). Assuming that competitors TSMC (NYSE: TSM) and Samsung (NASDAQOTH: SSNLF) will be able to roll out 14/16nm FinFET products by the first half of 2016 (a year after the first 20-nanometer system-on-chip products), then Intel's "advantage" is at most two years on the process side.
But is it even really two years?
The problem here is that when competitors move to their first FinFET nodes, they will actually be moving to the 14/16nm node, which should offer better density and better performance per transistor than the current Intel 22-nanometer process. Of course, Intel will get to its own 14-nanometer first (which Intel claims has a performance and density advantage over competing 14/16nm processes) in late 2014, but the idea that Intel is "3.5 years ahead" with 22-nanometer parts seems absurd.
Further, while Intel should have a transistor performance lead at 22-nanometer over TSMC's 20-nanometer, TSMC's 20-nanometer process is meaningfully denser than Intel's 22-nanometer, which offsets that transistor performance gain and muddies the picture of what kind of "lead," if any, Intel has. In mobile processors, low leakage (which is what FinFETs provide) is important, but density is also extremely important since these products need to integrate a lot.
Source: Intel via ExtremeTech.
Foolish bottom line
Intel's marketing claims here seem a bit off base. While there is no doubt that Intel implemented the FinFET transistor structure first, it did not bring it to mobile system-on-chip products until a fair bit after the initial PC chip implementations, thus making the claim of a 3.5 year lead a bit hard to swallow. Further, with a lot of the uncertainties and marketing claims coming from all camps with respect to 14/16 nanometer, it's tough to really get an idea of how big Intel's lead in manufacturing technology really is. However, there's still plenty of work to be done in determining the "truth" here, so stay tuned!
