Will Intels 14-Nanometer Kaby Lake Be Enough in 2016?

During Intel's most-recent earnings call, CEO Brian Krzanich admitted that mass production of the company's 10-nanometer manufacturing technology would be delayed by approximately a year. Krzanich said that the issues that Intel is having in ramping its 10-nanometer technology into production are "similar to" those faced at the company's 14-nanometer ramp-up, implying poor manufacturing yields.

In order to tide Intel's customers over, Krzanich said that the company plans to introduce a "third wave" of products built on its 14-nanometer manufacturing technology, known as Kaby Lake. Will Kaby Lake -- which is built on the same tried-and-true 14-nanometer technology -- be enough to help Intel maintain its current dominant position in the PC market.

What's a Kaby Lake, again?Intel has not formally revealed the specifications of Kaby Lake, but there's evidence out there to suggest that it's essentially Skylake with an upgraded integrated graphics engine. This means that general-purpose CPU performance will remain roughly flat to what we'll see in the Skylake-based chips this year -- although, through process improvements/refinements, Intel might be able to squeeze out a little extra clock frequency.

Graphics performance should move up, though, and Kaby Lake will likely have enhanced media capabilities. In a recent analysis of the media capabilities on Skylake, AnandTech's Ganesh T S lamented the lack of hardware HEVC 10-bit decode capability.

"Netflix has opted to go with HEVC Main10 for its 4K streams," he writes. "When Netflix finally enables 4K streaming on PCs, Skylake, unfortunately is not going to be as power efficient a platform as it could have been."

This is a feature that Intel has publicly said will be coming with its 2016 platform. It's improvements like these that I believe will make Kaby Lake a solid upgrade from Skylake.

Will it be enough for 2016?The vast majority of the PC market is served with what Intel refers to as its "mainstream" chips. These are chips with between two and four CPU cores, as well as integrated graphics. According to various leaks, Advanced Micro Devices will still be fielding integrated CPU/graphics parts built on an older 28-nanometer manufacturing technology, as well as its Excavator CPU architecture during the second half of 2016.

However, a leak from BenchLife suggests that AMD will start rolling out APUs -- chips that integrate the CPU and graphics -- based on its new Zen CPU core, and built on a foundry 14/16-nanometer FinFET manufacturing process during the first half of 2017.

Assuming that AMD launches these chips on time, and that they're architecturally competitive, then Intel's smaller rival might have a window of opportunity to successfully compete with Kaby Lake. This window is likely to be fairly small, as Intel has said that it plans to launch its next-generation Cannonlake processors built on its 10-nanometer manufacturing technology sometime in the second half of 2017, likely giving Intel a meaningful technology lead in the PC market, once again.

In a nutshell, I believe that Intel's current product release plans should allow it to remain quite competitive in the PC market. Given how large a portion of its overall revenues come from PC processors, and given that the underlying PC market is still showing signs of decline, it's critical that the company continue to field leadership products into the PC marketplace.

The article Will Intels 14-Nanometer Kaby Lake Be Enough in 2016? originally appeared on Fool.com.

Ashraf Eassa owns shares of Intel. The Motley Fool owns and 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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