In early October 2017, chip giant Intel (NASDAQ: INTC) launched a new family of processors based on its Coffee Lake architecture aimed at the gaming desktop PC market. The main features of Coffee Lake were additional processor cores compared to the prior-generation Kaby Lake processors, as well as the use of a newer, higher-performance manufacturing technology (known as 14-nanometer++) that enabled those cores to run a little bit faster.
The chips, thus far, have been positively received. Third-party reviews of the Coffee Lake desktop processors have been positive, and on Amazon.com (NASDAQ: AMZN), the best-selling computer processor is the Core i7-8700K -- the highest-performing variant of the Coffee Lake family.
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Unfortunately, Intel doesn't seem to be planning successors to the Coffee Lake products for gaming desktop enthusiasts in 2018.
Intel's manufacturing group fails again
Last year, a well-known boutique PC maker, Eurocom, claimed that Intel was planning to launch a processor with eight cores during the second half of 2018. This part is likely based on the company's new Ice Lake architecture. Intel has previously disclosed that its Ice Lake processor family will be manufactured using its 10-nanometer+ technology.
Unfortunately, a recent Intel product road map that began circulating shows that the company has no intention of releasing any Ice Lake-based processors for the desktop PC market in 2018. Indeed, that road map shows that Intel expects to continue selling Coffee Lake-based processors through 2018.
Moreover, that road map explicitly says that the Coffee Lake processors that Intel intends to sell through 2018 will come in variants with two, four, and six cores -- there's no eight-core processor in sight.
What this likely means, then, is that Intel's chip manufacturing group -- called Technology and Manufacturing Group (TMG) -- couldn't get its 10-nanometer+ technology in good enough shape to support the launch of high-end Ice Lake desktop processors for performance-hungry customers.
This is just another example of Intel's chip manufacturing group holding back the company's product teams.
Potential impact to Intel's business
Ultimately, a company like Intel benefits from putting out new products and technologies as quickly as possible. New products have better performance, more features, and improved energy efficiency -- all things that Intel's customers generally value.
Generally speaking, personal computer makers want Intel to release new chips on an annual cadence so that they can release new, more marketable personal computers. Moreover, a sizable chunk of gaming personal computers are assembled by the users themselves, meaning that Intel sells individual processors to customers through retail channels.
Those customers tend to respond well to new, innovative products, and I think that by not launching high-end Ice Lake-based desktop processors for the do-it-yourself market in the fourth quarter of 2018, Intel is missing out on an opportunity to both strengthen its competitive position as well as drive increased demand for its chips.
This isn't going to be something that'll dramatically impact Intel's business performance next year, but it's simply a shame that the company's product development teams continue to be held back by a manufacturing organization that simply can't pull it together.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Ashraf Eassa owns shares of Intel. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.
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