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The Funny Thing About Intel Corporation’s 14-Nanometer Process

By Ashraf Eassa - Dec 17, 2014 at 8:30AM

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Intel's "air gap" advance is technologically neat, but oh-so ironic.

During Intel's ( INTC -0.51% ) investor meeting, Bill Holt -- who runs the technology and manufacturing group for the company -- disclosed that the company's 14-nanometer chip manufacturing technology would implement a technique known as "air gaps." You can listen to Holt's presentation here to understand why it's such a big deal, but in a nutshell, he points out that these are used to lower capacitance of the interconnect stack, leading to better performance per watt. 

According to Holt, Intel might be the first logic manufacturer to implement air gaps in shipping products. This is a great achievement, but it's also incredibly ironic.

IBM actually invented the technique ... and Intel slammed it
Back in 2007, IBM ( IBM 1.66% ) was quite vocal that it had planned to bring this technique to its 32-nanometer technology in around the 2009 timeframe. Interestingly enough, Intel's Mark Bohr -- currently an Intel senior fellow and director of process architecture and integration -- publicly criticized this technique back in 2007.

According to EDN Network, Bohr claimed that the technology led to a doubling of interconnect masks, which could significantly impact manufacturing costs. He also claimed that air gaps "reduce[d] the mechanical reliability of the chip."

While Holt didn't specifically mention the direct impact to cost of the air-gap implementation at 14-nanometers during his investor meeting presentation, he did point out that solving the issues around the mechanical reliability of the chip wasn't trivial.

Wait, it gets better!
Interestingly enough, when IBM did finally announce details of its 32-nanometer manufacturing technology, air gaps were nowhere to be found, according to microprocessor analyst, David Kanter. According to Kanter, for the kinds of processors that IBM hoped to build at the 32-nanometer generation, air gaps would offer "minimal advantages and high risk" as a result of the potential mechanical reliability issues mentioned previously.

Interestingly enough, it doesn't seem that IBM used this technology at its 22-nanometer high-performance manufacturing technology, and I'd be surprised to see it implemented at IBM's 14-nanometer technology.

What does this mean for investors?
At the end of the day, the reason that investors care so much about the underlying manufacturing technologies for chips is that, at a fundamental level, denser and higher-performing manufacturing technologies enable chip designers to develop better, more feature-rich chips.

A big part of the Intel bull thesis in mobile for quite some time is that since Intel has the "better" manufacturing technology, it will be able to pack in more features and run at higher speeds at lower power than the competition can.

This thesis hasn't exactly played out, particularly as the company's designs for mobile have usually been late and underdressed. However, if the product teams do pull it together, I believe Intel has enough of a manufacturing edge to allow it to offer some pretty compelling solutions to the market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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