Not all potential problems were clearly discussed at Intel’s quarterly earnings call, which is why some authors of accompanying news materials were in for some surprises. Semiconductor expert Patrick Moorhead even suggested that Intel is having problems with the release of Meteor Lake processors, and this is negatively affecting the cost of production.
Image source: Intel
Intel CFO David Zinsner noted at the reporting event that the company’s costs in the second quarter were negatively affected by the need to increase the volume of production of products for the AI PC segment. Of the officially presented processors in this area, Intel has the Meteor Lake family, although it is already forced to begin production of Lunar Lake, which will be presented in September. However, the latter will be almost entirely processed by TSMC, and Intel itself will be responsible for the procedure of their testing and packaging, so Meteor Lake had a greater impact on the company’s financial performance in the second quarter.
“We have decided to accelerate the migration of Intel 4 and Intel 3 process technologies from our Oregon research lab to our Irish facility, where wafer processing costs will be higher in the near future,” explained Zinsner. Some experts explained such a rush not so much by the need for more crystals for Meteor Lake, manufactured using Intel 4 technology, but by the conditions set for the manufacturer by investors from Apollo Global Management. It should be recalled that Intel equips its Fab 34 enterprise within the framework of an investment agreement with Apollo, under which the former already received $11 billion in the second quarter in exchange for 49% of the shares of the created joint venture. Intel reserves the right to buy 100% of the enterprise’s products, but undertakes to provide certain volumes of product output to investors. Perhaps the acceleration of the transfer of Intel 4 and Intel 3 technologies to Ireland occurred precisely at the request of investors, since they have already entered into their rights in this joint venture.
Patrick Moorhead, after talking to his namesake Gelsinger, who heads Intel, came to the conclusion that the company is experiencing certain problems with the level of good products when releasing Meteor Lake processors. Intel’s CEO did not directly talk about these problems, but the company’s customers are complaining about the inability to get enough processors of this family.
Secondly, the possible existence of problems is indicated not only by Intel’s desire to form urgent orders for the release of additional batches of processors, which provokes an increase in costs, but also by the absence in the manufacturer’s plans of server processors, whose elements would be produced using Intel 4 technology. All processors of the Xeon 6 family use Intel 3 technology. Perhaps, Intel 4 process technology will remain a niche technology of the company, the widespread use of which at this stage may be hampered by quality problems. Intel representatives do not directly comment on this issue.
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