Intel Corporation (INTC) Reportedly Rushing New Chips Because of AMD’s Ryzen

Intel Corporation (NASDAQ:INTC) has slowed down the pace of its CPU releases over the past several years, and now that strategy appears to be paying off. For rival Advanced Micros Devices, Inc. (NASDAQ:AMD) … AMD took advantage of the situation to make a big push with its new Ryzen processors, and Intel is now feeling the heat.

Intel Corporation (INTC) Reportedly Rushing New Chips Because of AMD Ryzen

A report says the company has been forced to accelerate release of its new Basin Falls series CPUs by two months, with Coffee Lake chips being moved up even more. To achieve the rush move, INTC is reportedly spending big bucks to increase its manufacturing capacity.

INTC Stock’s Slowing PC Processor Innovation

With the global computer market declining for the fifth straight year, it’s not surprising that Intel took its foot off the gas in terms of new CPU development. Last year, the company ditched its “tick-tock” development model for one that stretched CPUs into three phases of development. Even earlier, it had begun to get complacent with releases.

A prime example was the Broadwell CPUs. Scheduled for 2013, Intel didn’t get around to releasing them until September 2014 and even then, the line-up was staggered with nine months between the first mobile chips and availability of desktop CPUs.

INTC was originally scheduled to release Cannon Lake, a new 10nm chip this year. But then it added Coffee Lake, based on the same 14nm process as three previous generations of chips. Coffee Lake will be the primary CPU aimed at mainstream PCs, and its release was pushed to 2018. Cannon Lake is still on track for 2017, but for low-power devices like ultrabooks.

AMD Moves to Disrupt With Ryzen

PC manufacturers don’t like being at the whims of Intel’s schedule. New models are sometimes delayed for months, waiting for new INTC chips. Consumers may be reluctant to buy a new PC that has a year-old CPU in it. Apple Inc.’s (NASDAQ:AAPL) iMac hasn’t been updated since 2015 and the blame is often placed with Intel for delayed CPU releases.

Intel’s rival in the computer CPU business has not been sitting still. AMD is taking full advantage of INTCs strategy. It has released new Ryzen CPUs that are based on all-new Zen architecture, with improvements that go far beyond the modest gains Intel’s bumps have been providing. AMD Ryzen CPUs also emphasize multicore support, making them ideal for advanced uses like VR and 4K gaming.

AMD has been trampled by Intel in the past, to the point where nearly 90% of PCs sold have “Intel Inside” stickers. But the new AMD Ryzen CPUs — which have been well received — could change that.

Intel Moves to Rush Coffee Lake Release

DigiTimes is reporting that the AMD Ryzen situation appears to have finally set off alarm bells at Intel. Citing Taiwan-based PC vendors, Digitimes says that INTC will move up the launch of the Coffee Lake processors by nearly six months. Under the new plan, the first of the Coffee Lake CPUs would arrive in August, instead of January 2018.

Intel is also reportedly accelerating its Basin Falls chips, aimed at the PC gaming market. These would now arrive several months earlier than planned, in June. Just in time to take on new high performance 16-core AMD Ryzen chips announced for the third quarter.

And Intel has reportedly spent over $100 million on new equipment in an effort to speed manufacturing of its new chips.

Whether AMD manages to claw back meaningful market share from Intel remains to be seen. However, AMD’s aggressive moves and the largely positive response the company has received from reviewers testing PCs equipped with Ryzen chips have clearly spooked Intel. It’s already facing declining CPU revenue because of shrinking PC sales — having AMD cutting into that shrinking sales pool is something that INTC wants to avoid at all costs, even if that means spending money and lighting a fire under its development teams to rush its previously relaxed new product rollouts.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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