Intel Corporation Is Doing Something Smart with Its Upcoming Kaby Lake Chip

Investors might remember that Intel had some issues getting its 14-nanometer manufacturing technology into production at acceptable yields, which led to delays in the ramps of its 14-nanometer Broadwell-based processors.

It seems Intel might be facing a similar delay of its next-generation 10-nanometer manufacturing ramp, with Semiconductor Engineering reportingthe company has delayed equipment move-in for one of its 10-nanometer manufacturing plants from this summer to the second quarter of 2016.

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The good news, though, is that Intel seems to have a Plan B here.

Kaby Lake, the new 2016 processorInstead of launching Cannonlake, a part built on the company's 10-nanometer manufacturing process, for 2016 systems, it appears Intel will deliver a chip code-named Kaby Lake. This chip, according to a leak from website BenchLife, will be built on Intel's 14-nanometer manufacturing technology.

Additionally, according to a user on the AnandTech forums who claims to have done some digging into Intel's latest graphics driver, Kaby Lake will feature Intel's next-generation Gen. 10 graphics and media engine, the successor to the Gen. 9 graphics found in Skylake.

In other words, Kaby Lake seems to be quite a bit more than just a "warmed over" Skylake.

This is better than a "Skylake Refresh"By introducing a new graphics architecture with Kaby Lake, Intel should be able to not only improve performance in 3D graphics over Skylake, but to deliver more robust features in applications such as video playback.

For example, in a recent slide at its 2014 developer conference discussing the challenges of 4K content, the company indicated that some content will require that the hardware can decode 10-bit HEVC content. In the same slide, Intel indicated Skylake would only be able to decode 8-bit HEVC content but that its 2016 platform would bring full HEVC/10-bit decode.

Bringing new architectural features to Kaby Lake, even via an older manufacturing technology, should still yield some tangible benefits over the older-generation Skylake architecture.

Something interesting about Kaby LakeThe leaked documents from BenchLife suggest Kaby Lake chips will support the same memory technologies that the Skylake chips do. This means for desktops and high-performance laptops, DDR4 will be the memory standard of choice, while Kaby Lake processors will use LPDDR3 for low-power laptops and convertibles.

This is interesting considering that Intel's next-generation PC-oriented Atom processors, called Apollo Lake, are said to support the newer LPDDR4 standard. LPDDR4 is currently more expensive than LPDDR3 (DRAMeXchange analysts say the LPDDR4 premium is about 30%-35% over that of standard LPDDR3), but it can deliver more bandwidth and lower power consumption than LPDDR3 can.

Now, the higher-end Kaby Lake mobile parts will feature an on-package cache that should help significantly boost effective bandwidth over what the LPDDR3 memory interface will provide (I don't believe Apollo Lake will have this cache), so that's still an advantage for the higher-end Kaby Lake parts.

Nevertheless it's interesting to see Intel's Atom-derived parts run ahead of its higher-end Core processors in PCs on memory technology adoption.

What's the takeaway?At the end of the day, it seems investors should expect 10-nanometer Intel processors in 2017 rather than 2016. That delay certainly isn't good (Intel will need to explain what's going on at its analyst day in November), but it seems Intel has a solid Plan B in the form of Kaby Lake.

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Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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