It's a well-known storyline at this point that Intel (NASDAQ:INTC) faced challenges bringing its 14-nanometer manufacturing technology into volume production, and that it's experiencing difficulties ramping its next generation 10-nanometer technology. In fact, Intel's 10-nanometer woes are precisely why the company has chosen to bring out yet another family of 14-nanometer parts during the second half of 2016, pushing out 10-nanometer products until the second half of 2017.
Intel hasn't disclosed much about Kaby Lake beyond the fact that it will be, in the words of CEO Brian Krzanich, "built on the foundations of the Skylake micro-architecture but with key performance enhancements." It's already widely expected that Intel will include an updated graphics processor to Kaby Lake; but there's another sizable enhancement that the company could make to these chips, as well.
CPU performance could actually improve
Although I don't expect Intel to include an improved CPU core inside of Kaby Lake, I do think that Intel can improve CPU performance -- particularly in mobile PC form factors -- over Skylake by way of frequency improvements. Indeed, as Charlie Demerjian over at technology news website SemiAccurate points out, although Skylake delivers improved performance-per-clock relative to the older generation Haswell processors, clock speeds, in many cases, have come down relative to the older Skylake chips.
For example, the highest-end quad-core mobile focused Skylake chip, the Core i7-6920HQ, runs at 2.9 gigahertz base frequency with maximum single-core turbo of up to 3.8GHz. The best Haswell-based quad-core notebook chip -- the Core i7-4980HQ -- runs at 2.8 gigahertz base frequency, but can turbo up to 4 gigahertz. Oh, and that part -- unlike the i7-6920HQ -- has the larger, more powerful Iris Pro graphics engine.
Given that Intel was able to deliver 22-nanometer Haswell parts with improved clock speeds in 2014 once 14-nanometer Broadwell was delayed -- likely as the 22-nanometer process matured -- I suspect that Intel will be able to pull off the same trick with Kaby Lake.
Kaby Lake should be a nice boost over Skylake
When Intel was forced to delay its 14-nanometer Broadwell chips, the company released a set of Haswell-based chips that simply ran at higher frequencies. This delivered a reasonable performance improvement; but the company could have offered a much better product had it been able to respond to the 14-nanometer yield issues sooner.
It's unfortunate that Intel is facing issues ramping up its 10-nanometer manufacturing on schedule; but as an Intel shareholder, I'm happy that the company is able to deliver more than just a slightly higher clocked Skylake for 2016 systems. Indeed, according to CFO Stacy Smith on the company's most recent earnings call, "the best correlation of gross margin is when you've got leadership products."
Given that Intel clearly wants to keep its gross profit margins as high as possible, it makes sense for them to do the best that they can given its 10-nanometer difficulties to keep its product line fresh. Although I suspect that Skylake should be quite competitive until Cannonlake -- the first 10-nanometer processor family from Intel -- arrives, I believe that both Intel and its PC system builder partners will benefit from Intel rolling out newer, better chips.
In addition to the performance and feature enhancements that should come with Kaby Lake, Intel could market these chips as the "seventh generation Core," which might -- even in a subtle way -- help convince system buyers that it's time to upgrade their systems.
Ashraf Eassa owns shares of Intel. The Motley Fool owns and recommends Intel. 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.