Intel Teases Panther Lake Launch As 18A Chip Yield Update Shows Strength
This announcement comes just one day after Intel's John Pitzer, VP of Corporate Planning & Investor Relations, spoke to the RBC Capital Markets Global TIMT Conference about Intel's position in the market, where he stated:
We clearly want to do better on the big margin side. I think what's important is when Lip-Bu joined in March, he was unsatisfied by yields and he was unhappy that the progress on yields was sort of erratic. I think one of the things that's dramatically changed over the last 7 or 8 months, we now have a predictable path for yield improvement. We've talked about in the past that the industry average yield improvement on a new ramp is about 7% per month. And we are now on that curve for Panther Lake, which is giving us some confidence as we launched the product this quarter. And like I said, if you go to CES in January, you can hear a lot more about that.
For those unfamiliar, "yields" in the context of semiconductor manufacturing refers to the proportion of usable dice versus discarded dice. In other words, what percentage of the chips that we fabricated were actually functional, and how many of those were fully functional? If you read between the lines a little bit, Pitzer's statement is basically admitting that yields on the 18A process weren't great at the beginning of the year, but that they're now steadily improving. Note the word choice: "steadily," not "rapidly."
Still, this is good news for Intel no matter what the actual yields on 18A are. Steady improvement means processes have stabilized, which in turn means that some of the internal turmoil at the company has settled down. It doesn't take a genius to look at the Intel of the last few years and see that it has been a company plagued by high turnover, poor leadership (at least below the C-level), and incoherent decision-making. If things are stabilizing internally, that means we might be on the cusp of a newly refocused Intel.
Besides his remarks about 18A, Pitzer had things to say about the company's next-generation 14A process too:
We're getting earlier, more and better feedback on how we're doing from those external customers at 14A than we did at 18A, and our PDK maturity is much better. And we are now bringing to market industry standard PD, both of which help dramatically. So I'd point out that at 18A, we were changing from FinFET to gate-all-around, we were adding backside power; we were making major changes. At 14A, it's a second-generation gate-all-around, it's second-generation backside power, and we have stated and been very clear: if you look at where we are today on 14A on performance and yield versus a similar point of development on 18A, we're significantly further ahead on 14. So we're feeling very good about 14.
Encouraging comments, to be sure, but he continued, additionally saying this:
When we win a customer for Intel 14A, we will have to layer on expenses well ahead of getting revenue. I do think, you know, for transparency purposes, as 14A sort of customer traction materializes, it’s likely to push out that [breakeven] end of 2027. I’m thinking, though, most investors will be okay with that because it will be confirmation that we can actually stand up an external foundry.
What does this all mean? 14A is apparently well ahead of where 18A was at the same point in its development, and in particular, the Process Design Kit—the tools and information that third parties need to make chips at Intel's foundry—is much more mature. That means Intel is in a much better place to offer 14A to customers; however, if that happens, Intel's going to have to burn a bunch of cash to materialize the capacity necessary for that customer's orders, and it means the company will take longer to realize returns on its foundry investments.
Despite that, Pitzer thinks that it will be a good thing, and that investors will see it that way. His reasoning makes sense; if Intel successfully fabs chips for an external customer, and they're good, then it proves that Intel can actually serve in that capacity. While Intel has made chips for other companies before, they've never been bleeding-edge high-end processors. A major external customer, like AMD, Apple, or Broadcom, would be a huge step toward validating Intel as a client foundry.
That's all in the future, though; the next major event for Intel will be the launch of Panther Lake at CES in January. We're expecting a number of huge announcements at the Vegas show, including rebadged CPUs from AMD and potentially one or both of a GeForce RTX 5000 "Super" refresh and the N1X SoC launch from NVIDIA, too. 2026 is shaping up to be a huge year for hardware, so make sure to keep your eyes here for the latest announcements.
