Intel Announces Tiger Lake Coming Mid-Year, 10nm Ramp Accelerating
Intel posted its Q1 2020 results yesterday, and the firm reported a strong Q1, particularly given the ongoing economic impact of coronavirus. Companies like Intel, AMD, and Nvidia are some of the few that have seen stronger sales in the wake of the pandemic, thanks to a surge of work-from-home equipment purchases.
After years of delays, Intel appears to finally be confident in its 10nm. Even after Intel launched 10nm, it has remained cautious about predicting the future of the node. Things began to change earlier this quarter when a large chunk of the expected Cooper Lake SKUs was canceled; that chip will only ship in 4S systems or above. We said at the time that this was likely a metric of how confident Intel was feeling about its 10nm, and the company confirmed that during its conference call.
Intel CEO Bob Swann confirmed that the company would launch its upcoming 10nm refresh, Tiger Lake, on its 10nm+ process. Ice Lake-derived Xeon CPUs arrive late in the year. Desktop parts were not discussed at all, either in terms of future 14nm refreshes (the rumored Rocket Lake) or with any notes on when we can expect 10nm chips on client desktops.
The implication of this is that 10nm+ still won’t be capable of matching Intel’s 14nm silicon for high-power desktop chips. Intel has never talked about launching any desktop CPUs on either the 10nm or 10nm+ process nodes, and with the firm already ramping up its discussion of Tiger Lake as an Ice Lake replacement in mobile, it seems clear there’s no near-term plan to launch 10nm desktop chips.
Despite this omission, Intel is taking several steps to ensure a large supply of Tiger Lake CPUs comes to market. The firm is building up a large reservoir of parts before it launches these CPUs — roughly 2x as much as it massed before launching Ice Lake. The goal is to ship those parts in Q3 and possibly Q4 to make sure any level of demand can be met. It’s possibly not a coincidence that the tailwinds currently fueling AMD and Intel’s profits are expected to dissipate in Q2. By taking a large hit to margin on reserve Tiger Lake parts in Q2, Intel can ship them ‘zero cost’ (with respect to gross margin) when it actually sells them in Q3 and Q4.
Overall, Intel sales were up substantially this quarter, thanks to a 1.34x increase in data center sales year-on-year and a 20 percent gain in laptop sales. Data center sales now represent 51 percent of Intel’s revenue, a first for the company. 70 percent of Intel’s data center revenue is being driven by cloud and communication service providers — two areas we can likely expect to expand in Q2 as well, given the number of people working from home.
Santa Clara isn’t giving any forecasts on what it expects back half of the year numbers to look like, which makes sense given the overall uncertainty in the market. Nobody has any idea what to expect as the pandemic rolls on.