About a decade ago, PC processor giant Intel (NASDAQ:INTC) announced that it would be pursuing a new chip development methodology known as "Tick-Tock." Under this development model, the company would transition its latest architecture to a new manufacturing technology, reaping performance, power, and cost benefits in the process. Intel called this a "tick."
Then, as that manufacturing technology matured and chip design teams become more familiar with the technology, the company would introduce a brand-new chip design on a pre-established process. Intel referred to this as a "Tock."
However, back in mid-2015, Intel admitted that its 10-nanometer technology was in rough shape and wouldn't go into production at the end of the year as expected. In the company's most recent form 10-K filing, it went ahead and officially declared "Tick-Tock" dead.
The official word
Intel's wording in the form 10-K filing is as following:
"We expect to lengthen the amount of time we will utilize out 14 [nanometer] and out next-generation 10 [nanometer] process technologies, further optimizing out products and process technologies while meeting the yearly market cadence for product introductions."
The company even includes an interesting visual aid to contrast the differences between the previous methodology and the current one:
Intel says that its third 14-nanometer product, known as Kaby Lake, will have "key performance advancements as compared to [its] 6th generation Core processor family." The extent of these enhancements is clear, but leaks to the Web suggest enhancements to graphics and media.
What else Intel says about its chip manufacturing technology in the 10-K
interestingly in the 10-K filing, Intel claims that it has "long been a leader in silicon process technology and manufacturing" and that it "aim[s] to continue [its] lead through investment in this critical area."
Intel further goes on to say that it believes that it has a "competitive advantage" as a result of manufacturing chips "in [its] own facilities." This advantage, the chip giant claims, "enables [Intel] to optimize performance, shorten time-to-market, and scale new products more rapidly."
Continuing further, the company indicates that "this competitive advantage will be extended in the future as the costs to build leading-edge fabrication facilities increase, and as fewer semiconductor companies will be able to leverage platform design and manufacturing."
This all sounds really good in theory, but Intel's competition has been quite aggressively moving from one technology to the next and it's not at all clear to me that the chipmaker will be able to sustain this competitive advantage out in time.
Indeed, from what Intel-rival TSMC (NYSE:TSM) has disclosed about its 7-nanometer manufacturing technology (which is expected to go into production in the first half of 2018), it should be very similar in terms of transistor density to Intel's 10-nanometer technology (both will employ Self-Aligned Quad Patterning for critical metal layers, for example, allowing them to achieve similar metal pitches).
That said, although Intel and TSMC will probably match up in terms of density, transistor performance and power characteristics remain an unknown for both. We'll learn more once both companies publish technical papers at major semiconductor conferences such as the International Electron Devices Meeting (IEDM) or the VLSI Symposium.
Ashraf Eassa owns shares of Intel. The Motley Fool 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.