Intel Launches The Full Lineup Of Its 14nm Broadwell Chips At CES 2015

-6.88%
Downside
44.17
Market
41.13
Trefis
INTC: Intel logo
INTC
Intel

Leading PC chipmaker, Intel (NASDAQ:INTC) kick-started the year by introducing the full lineup of its 14 nm fifth generation core line of processors as well as its first 14nm 64-bit Atom chips, at the ongoing 2015 Consumer Electronics Show (CES) in Las Vegas. Intel launched its first 14nm (Broadwell-Y) dual core CPUs for 2-in-1 laptops and high-end tablets, in September last year. Broadwell-U (the chips introduced at 2015 CES) bring the 14nm architecture to mainstream notebooks and smaller desktops. The Broadwell-U line is available in the familiar Core i3, i5, and i7 designations, and come with integrated GPUs. Products based on the fifth generation core processors are expected to start shipping later this month, while the first Cherry Trail Atom tablets will ship in the first half of the year. [1] The Broadwell processors will power new devices from a variety of manufacturers, including Acer, ASUS, Dell, HP Lenovo and Toshiba.

The move to the 14nm process technology makes the Broadwell chips both smaller and more efficient than the previous-generation Haswell processors. Broadwell offers up to a 22% improvement in 3D graphics performance, and video conversion runs 50% faster. Intel claims a system with a Broadwell chip can run up to 1.5 hours longer on battery than one powered by the Haswell chip. [2] Apple (NASDAQ:AAPL) has been widely rumored to be waiting for Intel to ship Broadwell in order to begin production of a new, redesigned MacBook Air. [3]

Having grown at a robust rate for many years, PC sales started declining 2011 onward. According to the research firm IDC, PC shipments declined 3.7% and 10.3%, in 2012 and 2013 respectively. The PC market stabilized in 2014 as Windows XP migration (to machines running newer operating systems) and commercial spending helped offset the weak consumer PC demand. The rate of decline in PC shipments dropped down to 4.4% in Q1 2014, remained flat in Q2 2014 and declined 1.7% in Q4 2014. [4] [5] [6]

Relevant Articles
  1. Gaining 50% Over The Last 12 Months, Will Intel Stock Rally Further After Q4 Results?
  2. Will Intel Stock Recover To Pre-Inflation Shock Highs?
  3. Up 44% This Year And With Foundry Plans Taking Shape, Will Intel Stock See Further Gains?
  4. What To Expect From Intel’s Q3 Results?
  5. Will Intel Stock Recover To Pre-Inflation Shock Highs?
  6. What To Expect From Intel’s Q2 Earnings?

Intel believes that global PC demand is stabilizing, and claims to be seeing clear signs of a refresh in the enterprise segment, as well as in small and medium businesses. The company took away some market share from AMD (NYSE:AMD) in 2014. In Q2 2014, Intel accounted for 94.7% of the revenue in the PC processor market while AMD accounted for just 5.2%, according to research firm IDC. Intel’s chips powered 84% of desktop units shipped and 88% of laptops in the quarter. AMD lost market share to Intel in Q3 2014, since the latter reported strong growth in PCs despite a relatively flat PC market. In comparison, AMD witnessed a 15.6% year-on-year decline in its computing and graphics revenue.

Broadwell is the most energy-efficient Core processor in Intel’s history and further extends the company’s lead over AMD, whose processors use the 28 nm processes from TSMC and Globalfoundries. [7] AMD is expected to introduce 20 nm parts later this year.

Despite branching out into new growth markets, including mobile and Internet-of-Things, Intel continues to derive  a significant proportion (over 60%) of its revenue from the PC market. The company believes that new designs and lower price points will help spur demand for its processors in the future.

Our price estimate of $34 for Intel is slightly below the current market price.

See our complete analysis for Intel

View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research

Notes:
  1. Intel debuts 5th Gen Core processors, TechNexion, January 5, 2014 []
  2. Intel touts tardy Broadwell Core CPUs for laptops, PCs, The Register, January 5, 2015 []
  3. Intel officially unveils full Broadwell-based Intel Core CPU lineup, appleinsider, January 5, 2015 []
  4. Windows XP Migration and Commercial Spending Helped Offset Weak Consumer PC Demand in The First Quarter of 2014, IDC Press Release, April 9, 2014 []
  5. Gartner: Global PC shipments post flat growth in Q2, Business Line, July 11, 2014 []
  6. Global PC Shipments Exceed Forecast with Mild Improvement in Consumer Demand, While Apple Moves to #5 Spot, IDC Press Release, October 2014 []
  7. Intel officially launches 14nm Core M CPUs, Seeking Alpha, September 5, 2014 []