Intel Corp. Needs to Make This Addition to Its Technology Roadmap

Markets Motley Fool

In the wake of the news from DigiTimes that Intel's (NASDAQ: INTC) first chip manufactured in its 10nm technology, known as Cannon Lake, would be delayed yet again to the end of 2018, my conviction that the chipmaker faces fundamental manufacturing technology development issues has never been greater.

Continue Reading Below

The silver lining to all this has been the company's rather smart move to continue to refine its more mature manufacturing technologies and bring to market new products based on those products.

Intel's seventh-generation Core processors, which have likely driven tens of billions of dollars of revenue for the company over the last year, were made possible thanks to an enhanced version of its 14nm technology, known as 14nm+.

Intel is expected to yet-again release a wave of products based on a still-enhanced version of its 14nm technology, called 14nm++, that should yet-again allow Intel to sustain its large and highly lucrative personal computer processor business for another year.

However, 14nm++ appears to be the end of the road as far as major enhancements to the company's now-mature 14nm technology goes. After 14nm++, Intel must take the leap to one of the flavors of its 10nm technology.

It's probably too late for Intel to do something that would be marketed as 14nm+++, but it's not too late to make a key change to its pipeline of 10nm derivatives.

Continue Reading Below

Intel needs to add a fourth 10nm tech

At some point, Intel is almost certain to overcome the issues plaguing its 10nm technology, just as it did with its 14nm technology, which was initially problematic.

Only after years of mass production and lots of work to both improve the technology and the products built on better derivatives of the initial technology, Intel's 14nm is mature, cost-effective, and has been used to deliver some nice products.

Had Intel planned a fourth-generation of 14nm technology, as well as a set of products to be manufactured on that technology, the apparent uncertainty around the upcoming 10nm technology, wouldn't be as big a deal.

So, for Intel to avoid this issue in the future, I think it would be only prudent for the company to insert a fourth iteration of its 10nm technology -- perhaps call it 10nm+++ -- and plan a set of products around the technology as well.

Intel's current plan calls for just three flavors of its 10nm technology: 10nm, 10nm+, and 10nm++

Indeed, the stumbles that Intel faced with its 14nm technology and the issues that it's reportedly facing with its 10nm don't inspire confidence in the company's ability to ramp-up its 7nm technology anytime in the foreseeable future.

Intel should, of course, aspire to get its 7nm technology into mass production as soon as possible, but if the company wants to maximize the value that it delivers to both shareholders and its customers -- that is, major system vendors that rely on Intel for the chip technology at the heart of their products -- it can't afford to not have a realistic backup plan in place.

10 stocks we like better than Intel
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Intel wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of September 5, 2017

Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.