Intel unleashed the first chips from its new Kaby Lake line on Tuesday, offering laptop and tablet makers modestly better performing CPUs with enhanced multimedia features. Faster desktop and server chips will arrive in a few months.
But the seventh generation of Intel’s “Core” chip architecture is also the first to veer from the company’s long-standing track record of moving to a more efficient manufacturing process just about every two years. The Kaby Lake line is made at a scale of 14 nanometers, the same as last year’s Skylake line and the same as 2014’s fifth-generation Broadwell chips. Originally, Kaby Lake was slated to be built at 10 nm, but delays perfecting the new process forced Intel to stick with the larger scale.
Chips manufactured at smaller scale pack more individual transistors into the same space as larger scale chips, which boosts performance and energy efficiency while lowering costs.
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Without the improvements from moving to 10 nm, Kaby Lake will only beat Skylake chips by about 12% for productivity applications and 19% for web performance, according to Intel. Most of the gains come simply from speeding up the clock speed of the new chips. A high end i7500U chip will run at 2.7Ghz, 8% faster than the equivalent Skylake model, for example. In turbo mode, at 3.5 Ghz, it beats the old chip by 13%.
That was enough to impress some analysts. The tweaked new chips should show big improvements for streaming video at 4K ultra high definition, Patrick Moorhead, president of Moor Insights & Strategy, says. “It’s easy to compare generation over generation and not be as impressed,” Moorhead says. “But the reality is that the average PC is five years old, not one year old.”
Even in its own marketing materials, Intel has talked more about five-year-old computers than current models. “Just compare what is available now to a 5-year-old PC, and it’s obvious how far we’ve come,” Navin Shenoy, who oversees Intel’s client computing group, wrote in a blog post about the Kaby Lake introduction where he repeatedly used the comparison.
The oft-cited problem is Intel’s inability to keep up with Moore’s Law, the observation of Intel (INTC) co-founder Gordon Moore that semiconductor manufacturers would be able to double the number of transistors that could fit in the same space every year or two. As the industry fulfilled the prediction, computer chips got cheaper and more powerful, driving innovation. But getting to 10 nm has proven more difficult than expected.
Intel CEO Brian Krzanich has said Intel might be able to get back on track for every-other-year improvements once it gets beyond 10 nm and looks at 7 nm and 5 nm.
It’s true that PC chips are a shrinking part of Intel’s business, but in the first half of 2016 the Client Computing Group division still contributed 54% of Intel’s revenue and the largest share of operating income of any unit.
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With consumers and businesses hanging onto their PCs for increasingly longer periods, Intel’s failure to deliver a big increase in performance won’t help dissuade many potential buyers that their current devices are good enough.
PC sales have dropped every year since 2011 and are expected to decline another 7% in 2016, according to IDC’s most recent forecast. Some of the drop is due to competition from smartphones, but most PC owners also see little incentive to spend on a new PC when the performance gains are less than earth shattering.
Still, one segment of the computer-buying public should be happy to see Kaby Lake chips: Apple fans. Apple (AAPL) skipped adding Skylake chips to its MacBook Air and Macbook Pro lines, leaving the existing models without a significant upgrade for a few years. But new models are now expected soon with Kaby Lake chips. And that should give Apple, at least, a boost.