"We continue to make progress with the industry's first 14nm manufacturing process and our second generation 3-D transistors. Broadwell, the first product on 14nm, is up-and-running as we demonstrated at the Intel Developer Forum in Q3'13. We're now planning to begin production this quarter with shipments to customers later this year."
-Intel's company line regarding Broadwell
Investors seem to continue giving Intel (INTC) the benefit of the doubt of late - as am I. After the company's unceremonious recent earnings report, we saw a bit of a pullback in the company's stock that was then eventually met with some support in the past couple of weeks.
The technical picture shows this recent bit of support, as the 200DMA acted as support during the beginning of February. Next resistance for the company is going to be breaking through and above its 50DMA - all in all, Intel's 6 month uptrend remains intact, at least for now.
In October of last year, Intel first came out and acknowledged that they were going to be delaying the shipping of their Broadwell 14nm chip. The Broadwell chip set is a 14nm die shrink of the 22nm Haswell chip. What does that mean? In layman's terms, they're basically scaling down their Haswell chip through advanced types of fabrication. Why is it important to do so? Less power usage, less heat, and accessibility into the rapidly shrinking world of tablets/laptops/mobile.
With so much focus on Intel continuing to innovate, as well as infiltrate tablets and mobile, the Broadwell chip set has been long opined for from investors. Additionally, with the PC market hitting bottom over the last year due to the focus on mobile and tablet, PC manufacturers are likely also excited to get their hands on the latest and greatest from Intel, hoping to spawn a rebirth in PC sales. The latest from the company was that Broadwell was expected to ship towards the end of 2014.
Now, the word from Digitimes is that Intel could potentially be pushing the date back a bit further - for speculative reasons that remain semi-unknown for the time being.
However, the company has come out and denied that the rumors are true. This report in PC Magazine states:
On Thursday, an Intel spokesman reiterated what the company said during a January earnings call about the prospects for Broadwell and emphasized that there had been "no change in what we've said."
"We continue to make progress with the industry's first 14nm manufacturing process and our second generation 3D transistors," Intel said during its earnings call on Jan. 16. "Broadwell, the first product on 14nm, is up-and-running as we demonstrated at the Intel Developer Forum in Q3 2013. We're now planning to begin production this quarter with shipments to customers later this year."
On one hand, that reads like a total denial of the rumor in its entirety. From a skeptic's point of view, it could however read "a delay is no doubt a material event, so we're sticking to our story until we can properly disclose exactly what's going on."
Or, maybe the company technically doesn't call it a "delay" if they're doing it on purpose?
On the other hand, Ed McKernan goes into detail about the company potentially delaying the new processor so it can continue to squeeze the margin juice out of its 22nm processors, which he predicts that the company can continue selling with AMD (AMD) "out of the picture". This is a "having your cake and eating it, too" scenario similar to the one Microsoft (MSFT) is in with Xbox, as they continue to reap profits from the Xbox 360.
If it's a delay simply because Intel is waiting to turn over current Haswell inventories, that's an even uglier headline for those invested in the PC market.
As an Intel shareholder, it's my contention that Intel needs to be a bit forward thinking here. Most of the shareholder sentiment surrounding the company relies on whether or not it's going to be able to get its act together for mobile and tablet - a delay could be the straw the breaks the camel's back for many shareholders. Additionally, Intel can help itself by sparking the PC market a bit as well - almost all major PC manufacturers have suffered from it this past year [exception: Lenovo (OTCPK:LNVGF)].
While I hope the rumors aren't true, Digitimes has a respectable track record. While my confidence in Intel remains high and I'll likely add on dips, the company needs to do something to jar itself from the quicksand its investors have watched it tread for the past year. The solution lies in both innovation and the broader PC market stabilizing. I know the PC market will do its part - will Intel?