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Intel hopes to reach full production capacity after a two month delay

Just months ago at the 2011 Intel Developer Forum, executives with the world's largest traditional personal computer chipmaker, Intel Corp. (INTC) were all boast and bravado, saying their competitors were years behind in process.  Indeed, the talk about the dramatic gains in terms of power efficiency and clock speed using Intel's proprietary 22 nm FinFET 3D-transistor design sounded very impressive.

But the first chinks in the armor perhaps began to show at the 2012 Consumer Electronics Show, when Intel was caught faking its 22 nm Ivy Bridge DirectX 11 demo during its ultrabook pitch.  Intel brushed off the trickery, but the incident raised some serious questions.  If the 22 nm chip was launching in April at production volume and had already been taped out in final form, why would Intel have to use canned video?  Why couldn't it show its real product?  Why the obfuscation??

Well, DigiTimes is reporting that multiple OEM sources have shared that Ivy Bridge is being delayed from April to June.  While not a huge delay, the report raises questions about whether Intel's 22 nm process is as stable as it claims.

To be fair, the OEMs appear to be claiming that the delay is due to inventories:
Because most first-tier notebook vendors are having trouble digesting their Sandy Bridge notebook inventories due to the weak global economy, while Intel is also troubled by its Sandy Bridge processor inventory, the CPU giant plans to delay mass shipments of the new processors to minimize the impact, the sources noted.

In other words, PCs didn't sell well in 2011, Intel built up a surplus of CPUs, and so it wants to delay its release.  This is all very plausible, and indeed lines up with write-offs found in Intel's earnings reports.  

But it is also possible that Intel isn't being entirely forthcoming and that Ivy Bridge wasn't being delivered at the reliable high volumes it had hoped.  And it could very well be a bit of both factors -- too high inventories, and some struggles on the process front.

Regardless, it sounds like customers will have to wait on Ivy Bridge, a bit.

That's good news for the competition.  AMD hopes to aggressively roll out its Trinity accelerated processing units (APUs) later this year.  The chips are built on a 32 nm process (GlobalFoundries), but still aim to be competitive with Ivy Bridge in terms of power consumption and graphics performance.  AMD is gambling that the CPU will lose, processing speed-wise, to Ivy Bridge, but be "good enough" for most consumers.  

Trinity in the wild
AMD's Trinity APU (center) will launch later this year and aggressively target would-be Intel Ivy Bridge buyers by offering improved graphics and power efficiency at a lower price. [Image Source: Jason Mick/DailyTech]

AMD hopes to price its chip + chipset package at hundreds of dollars beneath Intel.  Where as Intel is targeting systems $700 and up, AMD has stated to us that Trinity systems will retail for $500 or less.  Strong 2011 APU sales of AMD's initial swing at this strategy made it look like a home run.

Likewise, ARM CPU makers, including Qualcomm, Inc. (QCOM) are looking to invade laptops and compact desktops late this year, with the introduction of 28 nm ARM CPUs compatible with Microsoft Corp.'s (MSFTnew Windows 8 [1][2][3][4][5][6].  The Q4 2012 devices are expected to follow a strategy similar to AMD's -- strong power efficiency at a low price.

The delay is also good news for third party USB 3.0 chipmakers like Renesas Electronics Corp. (TYO:6723), ASMedia Technology Inc., and Etron Ltd.  As Ivy Bridge was the first Intel chip to include on-die USB 3.0 support, it was expected to render these competitors' designs obsolete.  But now, they have been bought a bit more time.

Intel's core hope in terms of maintaining its dominant position is to beat the competition in process, and trickle down its process improvements into its budget models, mitigating cost and architectural disadvantages.  Intel has made big promises [1][2] regarding Atom-powered smartphones, but without 22 nm technology it appears to be forgoing any sort of big mobile push in 2012.  The longer it waits, the more advantage it gives to the hungry rivals.  Intel should hope that the delay does not set back its very aggressive 22 nm Atom rollout.

Sources: DigiTimes, MaximumPC [faked Intel Demo]

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RE: Lack of competition from AMD?
By bennyg on 2/19/2012 5:32:56 AM , Rating: 2
1. More to it than just price...Intel has margin to play with, it can compete with AMD on price if it wanted to. Ultrabooks are better that's why they're more expensive. Intel makes the same profit on 1 CPU as AMD on about 5 by my guess. Revenue is for ego, profit is for reality.
2. So what... most people don't care about gaming and wouldn't have a clue what DX11 means. To that crowd, the "2Gb VRAM" on the specs sheet means more...
3. Wrong on two counts, crunching FP numbers costs power whether it's on-die IGP or dGPU... and Optimus powers down the dGPU quite effectively. Haven't yet met an all-AMD notebook of equivalent power with better battery life than an Intel/Nvidia option regardless of price...
4. Lol, I'd rather have Intel's R&D budget than AMD's any day, look at performance increase in IPC from 45nm Core2 to 45nm Nehalem and 32nm Nehalem to 32nm SB, 15% IPC from pure architecture is something AMD hasn't done from any of K8 to K10 to Phenom to Dozer. Remember when everyone was saying "Intel's dead, Prescott is a stinker with current leakage issues, it'll be the last CPU they make"... then they came out with Conroe...
5. Roflol, are you still using a P100 with Win95 because it is "good enough" for typing a Word Doc... if power becomes available immediately it's used to create a better experience (only occasionally, less optimised software)
6. If all AMD can say is it's cheaper and the IGP on their chipset is a bit faster... and Intel can still say their chips are faster, have lower power consumption, have more features, are more reliable... Intel will still own the CPU space for anything over $200.

Ask anyone who knows the slightest thing about business, you do NOT want to own the low end of the market without a bigger strategic benefit flowing on to the high end... discounting for market share is a sign of utter desperation.

Nicely done, it's nice to have a change from all the iTrolls.

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