Intel Corporation (NASDAQ:INTC) to abandon tick-tock chip manufacturing approach

Intel Corporation (NASDAQ:INTC) is going to slowdown the rate at which it upgrades its chips. That change appears to be a silent admission that living with Moore’s Law is increasingly becoming difficult.

In the new approach, Intel Corporation (NASDAQ:INTC) will be optimizing chips based on certain microarchitecture instead of rapidly moving to a new microarchitecture. For several years, Intel based its chip upgrade on what popularly came to be known as tick-tock approach.

As much as that approached enabled Intel to maintain a solid production process lead over rivals, it presented challenges that have come more serious in the recent years. For example, shrinking transistors and cramming more of them on a chip’s surface has increasingly become difficult.

Therefore, slowing down the pace of upgrading to new chip architectures should allow Intel to offload some manufacturing pressure.

Under the tick-tock model, Intel upgraded its chip production processes almost every year. That allowed it to pack more transistors on a chip, thus enabling it to significantly enhance the efficiency and performance of its processor chips.

Limits of Moore’s Law

Moore’s Law talks about computing power doubling every couple of years as the number of transistors on a chip double. But Intel Corporation (NASDAQ:INTC) appears to be confirming that Moore’s Law is reaching its limits. Shrinking transistors is not as easy as it was in the past.

Processor optimization

The new approach that Intel Corporation (NASDAQ:INTC) has adopted will be characterized by chip optimization. The company has already embarked on that path. For example, Intel plans to release three models of 14nm-based chips in 2016. These are Broadwell, Skylake and Kaby Lake. That’s a stark departure from the earlier plan where the company intended to release only two 14nm chips this year and the follow that with a 10nm chip called Cannonlake.

What will now happen is that Intel will optimize the 14nm process and squeeze another chip model based on the same process before it moves to 10nm process. Therefore, the 10nm-based Cannonlake that was supposed to come out this year will wait until 2017.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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