Intel Says First Volume 10nm Chips to Ship in June, 7nm Chips in 2021

Intel said will Start shipping its first Bulk 10nm processors, codenamed Ice Lake, for high-end PCs at June.

It will also plans to establish multiple 10nm products across its portfolio through 2019 and 2020, such as added CPUs for client and server and for servers. The chipmaker included it plans to provide even smaller 7nm processors by 2021. These 7nm processors are anticipated to deliver 2x scaling, 20 percent increase in performance per watt, and 4x reduction in design sophistication.

“The lead 7nm product is forecast to be an Intel Xe architecture-based, general-purpose GPU for data centre AI and high performance computing. It will embody a heterogeneous approach to product structure using advanced packaging technologies. On the heels of Intel’s first discrete GPU coming in 2020, the 7nm general purpose GPU is anticipated to launch in 2021,” the company said in a press announcement .

Intel stocks dropped 2.5 percent on Wednesday after executives predict modest profit growth during the next three decades, signalling it’s very likely to lag huge competitions as the once-dominant chipmaker catches up in tech.

Intel once dominated the most crucial chip market with more than 90 percent share for the brains of personal computers. Since PC sales have stagnated, it has expanded into data center processors, memory and networking chips.

That rankings Intel as a smaller player in a bigger market. The company said on Wednesday it hopes to have just 28 percent market share by 2023, roughly $85 billion in sales in a $300 billion addressable market for the chips it generates, according to the company’s forecast.

Chief Executive Officer Bob Swan stated on Wednesday the company sees both revenue and earnings per share rising in the”single digit” percentage scope during the next three years, with horizontal PC chip sales offset by”double digit” percentage revenue growth in data center processors.

Swan also stated operating margins could remain relatively stable at 32 percent, but gross margins would diminish as the company ramps up its 10-nanometer chip-making technologies, making chips faster by making their features smaller.

Kinngai Chan, a Summit Insights Group analyst, said Intel’s forecast means it could grow more slowly than other big chipmakers, particularly in terms of profit.

Intel”is admitting to gross margin pressures at the next 2.5 years and earnings will only keep pace with topline growth,” Chan explained. Chan said Intel’s peers were more likely to report 5% earnings growth lately, but with profits growing faster than earnings instead of along with it since Intel has prediction.

Swan gave the long-term outlook less than two weeks following Intel cut its 2019 sales forecast, citing poor data centre sales in China.

“We let you down. We let ourselves down,” Swan said of this quarterly results last month.

Swan told investors the primary catalyst of gross margin strain was the transition into new chip-making technology. Intel struggled with delays for its 10-nanometer technology, losing its lead in creating the smallest chips to rival Taiwan Semiconductor Manufacturing (TSMC).