Computer processors have existed for a long time but are starting to reach limitations, causing more and more trouble for those producing them. The main bulk of processor computing power comes from a specific component called the die, where all of the tiny central transistors execute computations. In an effort to squeeze more performance capabilities into the same amount of space, companies have been trying to shrink what they call the process node, in order to more densely pack smaller and smaller transistors into the same amount of space in the die. In the past, the sizes have rapidly shrunk from numbers in the hundreds of nanometers, but the pace of this shrinking has slowed. In August 2015, Intel released their first 14nm processors, which they named Skylake architecture. Since then, Intel has not once innovated in the processor marketspace, which could lead to their downfall.
Since then, Intel has yet to release a desktop CPU which has been built using a smaller process node. Every year since 2015, Intel has essentially been releasing the same processor built off the same central core. While their internal speeds have increased with each release, the functional differences between them were minimal. The reason why they stopped shrinking their process nodes, which usually correlates with noticeable performance improvements, is that they simply couldn’t. They could not develop a manufacturing process for producing processors at a high enough yield with a smaller size. No matter how many smart and well-known figures they hired from their competition, Intel had not been able to shrink their design.
In the meantime, Intel’s main competitor, AMD, had been rapidly developing. They had not released a new desktop processor from 2012 to 2017, but then, they shook the entire market with their new Zen architecture. The first generation of this design was 14 nanometers, just like Intel’s Skylake, but AMD quickly surpassed Intel’s performance and price. Each year, both companies released a new processor generation. Intel continued their cycle and re-released the same product year over year, while AMD has continued to evolve. AMD even managed to shrink their process down to 7nm, while Intel is still struggling to move past 14. In just three years, AMD beat Intel. At the time of writing, Intel just announced details for its next generation processors. To no one’s surprise, not much has changed: another refresh of the Skylake architecture, following their usual patterns and prices.
Currently, AMD’s processors are performing much better than Intel’s in nearly every possible use-case, and they’re also less expensive, draw much less power, and even run cooler. Because of Intel’s much higher power consumption, better computer power supplies are needed, which in turn drives up the price for people buying systems with Intel CPUs. There is very little reason to buy an Intel-based system when the competition is better in every way. Not only are AMD’s products better, but their stocks are also seeing much higher gains. For the past five years, AMD’s stock price has gone up by about 1600%. Intel, on the other hand, only increased by approximately 39%. It is abundantly clear that AMD is doing significantly better than Intel based on this data alone. Furthermore, Intel also has another significant factor pulling it even further beneath AMD: security.
Intel has had many security flaws found in its devices over the course of its repeated refreshes of the Skylake architecture. Many of these are hardware level problems, which means that the internal design of the processor is the cause of the risk. Because Intel cannot create new internal designs due to their inability to shrink their chips, these vulnerabilities must be resolved with software changes that significantly worsen performance. Many of these security fixes cost people around 10-15% of their performance. It further solidifies Intel’s losing computational power compared to the competition. Intel’s biggest markets are the enterprise and server spaces, and these vulnerabilities only push their customs to their competition.
Overall, Intel is in an increasingly worsening position and is losing more and more ground to their competitors. Because they cannot produce high performance desktop processors with a smaller process node, Intel is soon to be left behind. Intel has even lost faith in its own manufacturing abilities and has converted to outsourcing production to the Taiwanese Semiconductor Manufacturing Company (TSMC). It shows that Intel believes it cannot innovate its way out of its situation and is moving along a downwards trend. While Intel is successful with many of its products, including processors, its success will not last forever.
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