Intel Corp. CFO Practically Confirms Existence of 10-Nanometer Tiger Lake

An Intel wafer being tested. Image credit: Intel. 

In mid-January, I published an article here on Fool.com revealing that Intel (INTC +1.07%) has a third wave of 10-nanometer products planned, code-named Tiger Lake. At the time, I noted that this had some pretty serious negative implications on Intel's so-called "manufacturing lead."

At a recent investor conference, Intel CFO Stacy Smith essentially confirmed that the report was spot on. 

Here's what Smith had to say
During the conference, Smith had the following to say with respect to the company's chip manufacturing technology release cadence (emphasis mine):

Because we're at two-and-a-half years [this is in reference to the time it takes Intel to transition from one technology to the next] this gives us the ability to bring out a third wave of products on 14-nanometer so we can land a product family on a very healthy, mature [manufacturing] process.

That ends up being a good answer for us and a great answer for our customers because we can allow them to refresh their product lines with new [intellectual property] blocks and things like that.

And so that's the strategy at 14 [nanometer], and likely you're going to see the same strategy at 10 [nanometer].

Given typical chip development cycles, Intel must already be actively working to develop this "third wave" of 10-nanometer product, known as Tiger Lake.

Intel management appears to be in denial about loss of manufacturing lead
What I found particularly startling is that, during the investor conference, Smith had the following to say with respect to Intel's series of manufacturing screw-ups (emphasis mine):

We would like to be at two years, but the reality is that we're not, we're at two-and-a-half. By the way, everyone else is even longer than us.

This appears to show that Smith has a view of the company's competitive positioning in the market for leading-edge logic silicon that's seemingly inconsistent with historical fact as well as projections from Intel's main competition for the future.

To illustrate, take a look at the table below in which I show when the first products on a given manufacturing technology from Intel's main competitors -- TSMC (TSM +1.40%) and Samsung (NASDAQOTH: SSNLF) -- first appeared in the marketplace.

Source: Various.

Both Samsung and TSMC have been able to transition to new manufacturing technologies at a far quicker pace than the "two-and-a-half" years that Intel has taken for its last two technology transitions. And, based on the public statements from both of Intel's competitors, it looks as though they will transition to their respective "10-nanometer" processes sooner than Intel will, even though Intel went into production on its "14-nanometer" technology before either of them.

Furthermore, TSMC has indicated that it will go into mass production on its 7-nanometer technology at some point in the first half of 2018. If the technology represents the significant area shrink that the company has said, there's little doubt that at least one of Intel's competitors is moving at a much quicker pace than Intel is.

The fact that Intel's CFO would say what he did on an investor conference doesn't instill confidence that the company's executive team truly understands the capabilities of its competitors. As former Intel CEO once said, "only the paranoid survive." The group of folks currently running the show at the chip giant don't seem to be paranoid at all.