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Intel's Meteor Lake Is Almost Here: What Investors Need to Know

Motley Fool - Thu Dec 7, 2023

Semiconductor giant Intel(NASDAQ: INTC) is set to launch its most important PC chip family in years on Dec. 14. Codenamed Meteor Lake, these mobile-only computer processing units (CPUs) will bring a lot of changes all at once. That's an unusual and risky move for Intel but one that makes sense as the company races to advance its manufacturing technology and pull ahead of rival Advanced Micro Devices.

Moving to Intel 4

Meteor Lake will be the first set of PC chips from Intel which use a tile-based architecture. In the past, when Intel only manufactured its own chips and didn't make much use of other foundries, this type of architecture wouldn't have made a ton of sense. But the situation has changed. Intel is working on building a foundry business that makes chips for third parties, which means its various manufacturing processes will have much longer lifespans. The company has also embraced using rival Taiwan Semiconductor Manufacturing Company (TSMC) for some manufacturing.

A tile-based architecture allows Intel to mix and match manufacturing processes, using the optimal process for each tile instead of using a cutting-edge process for the whole chip. Meteor Lake will use the new Intel 4 process for the compute tile, which houses the CPU cores as well as the mature Intel 16 node for the base die that underlies all the tiles. For everything else, including the graphics processing unit (GPU) tile, Intel will turn to TSMC's 5nm and 6nm processes.

The Intel 4 process brings some big changes of its own over the Intel 7 process used for the company's current-generation products. On top of a die shrink, Intel 4 is the first process from Intel to use extreme ultraviolet lithography, or EUV, technology. TSMC has been using EUV technology for years. N7+, its first high-volume process using EUV, delivered double-digit percentage improvements in density over the previous N7 process.

Intel will tie the tiles together using its 3D Foveros packaging technology, which allows tiles to be stacked on top of a base die. Meteor Lake isn't the first use of Foveros for Intel, but it is the first time the company has used the technology for a high-volume product. Advanced packaging is also critical to Intel's foundry efforts, with the company reportedly planning to greatly expand its capacity over the next few years.

New architecture and AI built-in

In the past, Intel generally wouldn't move to a new manufacturing process and a new architecture simultaneously. With Meteor Lake, the company is throwing that playbook out the window. In addition to the manufacturing changes, Intel will introduce new CPU core architectures and include dedicated AI hardware.

Like the last two generations of Intel PC chips, Meteor Lake will have two types of CPU cores. The P-cores will focus on raw power, while the E-cores will focus on efficiency. Meteor Lake's new Redwood Cove P-cores will bring efficiency improvements, and its new Crestmont E-cores should deliver a 4% to 6% improvement in instructions per clock. Meteor Lake will also house additional low-power E-cores on the system-on-a-chip (SoC) tile, which is separate from the compute tile containing the rest of the cores. This could improve battery life by keeping the power-hungry compute tile dormant for certain tasks.

The SoC tile will also contain a neural processing unit, which is capable of accelerating AI tasks. Software will need to explicitly support this new AI hardware, but the potential impact for users is significant. Being able to use AI-powered features without waiting for a cloud service to respond or bogging down the CPU and GPU can greatly improve the user experience.

AI chip centered on circuit board.

Image source: Getty Images.

Timed for the PC comeback

The PC market has been in a slump for the past two years. Shipment growth is finally expected to return in the fourth quarter, which is good news for Intel as it launches its most important PC CPU product in years.

We don't know much yet about the performance, efficiency, or battery life of Meteor Lake-powered systems or for that matter any solid details about specific models. Samsung is reportedly planning to launch its Galaxy Book 4 on Dec. 15, one day after Meteor Lake's official launch date. The Galaxy Book 4 is expected to make use of Meteor Lake's AI hardware to power Samsung's Gauss large language model.

One area where Intel has lagged AMD recently has been power efficiency, a consequence of falling behind TSMC in manufacturing. Meteor Lake should help close that gap, although Intel will still be at a manufacturing disadvantage. Arrow Lake, Meteor Lake's successor scheduled to launch in 2024, should move the company closer to manufacturing parity with TSMC.

Intel has remained the leader in the PC chip market, although it's been losing market share to AMD over the past few years. A successful Meteor Lake launch could help reverse that trend and push Intel's market share back up.

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Timothy Green has positions in Intel. The Motley Fool has positions in and recommends Advanced Micro Devices and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.

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