Intel earnings fail to placate investors (copy)

Intel’s Ronler Acres campus in Hillsboro is the company’s most advanced research site.

Intel sought to put years of manufacturing setbacks behind it Monday by rebranding its upcoming generations of microprocessors and promising a succession of technological breakthroughs from its Oregon factories over the next several years.

The chipmaker, whose semiconductors are now at least a few years behind in the technological arms race, told industry analysts Monday that it plans to catch up in 2024 and restore its “unquestioned leadership” in 2025.

And the company announced the first customers for its new contract manufacturing businesses, saying that Amazon will use Intel’s packaging technology on new chips and Qualcomm will hire Intel to make future chips that use some of the new innovations the company announced Monday.

“This is the most detailed roadmap we’ve ever provided for process and packaging technologies,” new CEO Pat Gelsinger said on Monday’s video call. “We are significantly accelerating our clock rate of innovation.”

Intel must demonstrate, though, that it can deliver the new technologies on its ambitious schedule. Production defects have delayed three successive generations of Intel chips, costing Intel market share and profitability as customers turned elsewhere.

Monday’s announcements included:

A five-year plan for technological upgrades, including the company’s first new transistor architecture in a dozen years, and a new design for managing power within the chips. Intel said the new processors will enable substantial boosts in performance and power management, which are what distinguish computer chips in everything from smartphones to data centers.

A renumbering of Intel’s technology nodes. As The Oregonian reported in March, Intel is reclassifying its chips to more closely match the classification system its rivals use. Smaller features on computer chips enable faster, more efficient performance. Intel argued the existing numbering convention was outdated and didn’t fully capture the improvements in its chips. So the company renamed a forthcoming processor, previously called a 7-nanometer chip, as “Intel 4.” Beginning in 2024, Intel will shift from nanometer as the standard of measurement in its chips to the angstrom. An angstrom is one 10-billionth of a meter. The “Intel 20A” chip is due in 2024, followed by an “Intel 18A” chip soon after.

A partnership with Dutch equipment manufacturer ASML to improve a new class of production tool, known as extreme ultraviolet lithography, or EUV.

The first customers for Intel’s new contract manufacturing business, known in the industry as foundry work. Amazon Web Services will use Intel’s new packaging technology, which stacks components vertically to enable better performance. Intel rival Qualcomm will use Intel’s new transistor architecture for chips coming in 2024.

Intel didn’t say how many chips it will make for Amazon and Qualcomm, leaving open the question of whether those companies are merely testing the waters or if Intel has persuaded them to bring high volumes of their chips to Intel’s factories.

Intel is among a handful of companies that both engineer and manufacture its own chips. That’s been a competitive advantage for the company in past years, but once Intel’s factories began to lag it became an albatross.

The chipmaker began the year openly contemplating the possibility it would send its advanced production to rivals in Asia. But then it hired Gelsinger, a 30-year Intel veteran and former chief technology officer who had spent the past decade as CEO of software company VMware.

In the five months since he returned to Intel as CEO, Gelsinger has sought to take into back to the future, re-emphasizing the company’s engineering and its Oregon-based manufacturing network. Intel is the state’s largest corporate employer, with 21,000 people working at Intel’s campuses in Washington County.

The technologies Gelsinger outlined Monday had been in development for years before he returned to Intel last February. It’s been a long time, though, since Intel had a CEO who could talk in as much detail as Gelsinger did Monday about those technologies, and that may go some way to persuading investors and customers that Intel can fulfill its promises.

“Intel is back,” Gelsinger insisted. “We are picking up the pace.”

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