Intel Tackles Voracious 14nm CPU Demand With New Vietnam Copy Exactly Fab

These shortages have affected all of Intel's processor lines (server, desktop, notebooks), including its newly released Whiskey Lake notebook processors. Luckily for Intel, it has a backup plan. The company announced this month in a support document [PDF] that it is shifting some of its 14nm products testing to one of its facilities in Vietnam to alleviate some bottlenecks. The Vietnamese facility is operating under Intel's Copy Exactly! program, which ensures that the same production and testing procedures used at Intel's other mainline facilities are adhered to. 

According to Intel, sourcing is processors from multiple production sites has a number of benefits including "faster production ramps that improve product availability and improved consistency to quality performance."

As a result of this shift, Intel says that customers will likely receive processors from multiple facilities including China, Malaysia and Vietnam. Processors affected by this Vietnam shift include 7^th generation Core i3, i5, and i7 processors along with select Pentium and Celeron processors.

Alleviating some of the demands and testing procedures involved with these older product lines will allow Intel to focus its efforts on important, upcoming 14nm++ products like 9^th generation Coffee Lake Refresh processors and its Cascade Lake server processors (which will contribute greatly to Intel's bottom line).

There's also another wrinkle in Intel's 14nm manufacturing capacity. The company is also building its XMM 7560 Gigabit LTE modem on 14nm lines, and as we've recently learned, this chip will be going into every single Apple iPhone XS, iPhone XS Max, and iPhone XR that ships for the next year. Considering that Apple sells upwards of 77 million iPhones (particularly during its fiscal Q1) per quarter, keeping these lines humming will be a high priority for Intel. Intel will be the sole modem supplier for [new] iPhones for the foreseeable future given Apple's falling out with Qualcomm.

Moving forward, Intel is going to have to fire on all cylinders to ensure that not only are customer supply demands met, but that its transition to 10nm proceeds without a hitch. Intel's 10nm production has already been delayed extensively, and the few 10nm parts that have managed to see the light of day have disabled integrated graphics (reportedly due to defects). This is forcing OEMs to use discrete AMD Radeon GPUs, which negates some of the inherent power efficiencies achieved by moving to the 10nm process for low-power applications.

Any missteps by Intel will be quickly seized upon by AMD, which has been grabbing market (and mind) share with its Zen-based processors. AMD has been making inroads in both the desktop and server markets thanks to the performance of Ryzen and EPYC products, and analyst firm Jeffries thinks that AMD has the potential to triple its CPU market share to 30 percent in the coming months. Throw in the fact that AMD is on the verge of shipping its first 7nm products, and there's definitely cause for concern for the folks in Santa Clara.