Update 08/02: Patrick Moorhead has revealed a additional tweet, clarifying that “Pat [Gelsinger] didn’t tell me l that there were yield issues. This was *my* interpretation.” The textual content of the article has been up to date accordingly to replicate this tweet, in addition to Intel statements about accelerating their Ireland Fab 34 ramp-up.
Alongside Intel’s weak Q2 2024 earnings report and the announcement of $10 billion in spending cuts and layoffs for 2025, the corporate can also be disclosing some new details about their chip deliveries over the primary half of the 12 months. A short report, posted on X by analyst Patrick Moorhead and citing a dialog with Intel CEO Pat Gelsinger, revealed that Intel encountered a significant manufacturing bottleneck on Meteor Lake earlier this 12 months. The difficulty was vital sufficient to drive intel to take the extraordinary and expensive step of accelerating their Ireland fab ramp-up as a way to enhance chip capability.
It was a really tough Q2 for $INTC. And that information… Thanks, @Pgelsinger, for the time to debate.
It seems that there have been yield/throughput points on Meteor Lake, negatively impacting gross margins. When you need to get the product to your clients, and you’ve got wafers to… pic.twitter.com/pHU66xvFe7
— Patrick Moorhead (@PatrickMoorhead) August 1, 2024
–Patrick Moorhead
In a separate tweet posted a number of hours later, Moorhead then clarified that the yield points talked about in his first tweet had been his interpretation of the matter, moderately than one thing Pat Gelsinger had advised him instantly.
–Patrick Moorhead
Decoding Moorhead’s dense tweets, essentially, Moorhead is questioning why Intel’s Cost of Goods Sold (COGS) – how a lot the corporate’s chips value to provide – had been on the rise with the launch of Meteor Lake. The analyst surmised that yields and/or another sudden manufacturing bottleneck have to be the case, as these are the standard points that drive up chip COGS on a short-term foundation like Intel has been experiencing.
And, judging from Intel’s earnings name that came about after the preliminary tweet, Moorhead was proper to an extent. Referencing the elevated COGS, Intel CFO David Zinsner famous that Intel opted to ramp up its high-volume manufacturing in Ireland quicker than initially deliberate. This elevated Intel’s capability for Intel 4 (and Intel 3) capability, however doing so additionally elevated their prices, as wafers out of Ireland value extra within the close to time period.
-Intel CFO David Zinsner (Intel Q2’24 Earnings Call)
Between Moorhead’s report that OEMs have been receiving fewer Meteor Lake chips than they might use, and Intel’s announcement that they accelerated the Ireland fab ramp-up, that is the primary vital disclosure that Meteor Lake chips had been, no less than in some unspecified time in the future, in unexpectedly…
