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Intel Keeps Insisting Moore’s Law Isn’t Dead

March 28, 2017, 10:11 PM UTC
Intel Reports Quarterly Earnings
SANTA CLARA, CA - JANUARY 16: The Intel logo is displayed outside of the Intel headquarters on January 16, 2014 in Santa Clara, California.
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Intel’s efforts to improve its prospects usually involve pitching the products it sells, but on Tuesday the chip giant went in another direction, offering a deep dive into the company’s manufacturing techniques.

The goal was to prove that Moore’s Law—the prediction by the Intel co-founder that transistor density can double every two years or less—remains in force, even though the rate of introducing smaller-scale chips has slowed. A second aim was to attract more customers in Intel’s growing effort to manufacture chips for others.

Instead of talking about how it might power the next wave of slick laptops, automated drones, or self-driving cars, Intel executives on Tuesday explained how the company could make its chips more powerful and energy efficient by cramming more transistors and other features onto the silicon wafers. One clear aim was to reset expectations around Moore’s Law, as the company has been penalized by investors and analysts in recent years for failing to meet its decades-old strategy of shrinking the size of transistors every other year.

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In the past five years, Intel’s stock price has gained only 28%, less than half the gain of the S&P 500. But this lag is about far more than missed expectations, as the company missed the mobile wave, which has greatly hurt sales of PCs and the Intel processors that run them.

For decades, Intel (INTC) followed what it called a “tick, tock” strategy. In one year, representing the “tick,” it would improve its microprocessors by printing the transistors on the chips closer together, reducing the scale of the process, say, from 32 nanometers to 22 nanometers. In the second year, the “tock,” the scale would stay the same and Intel would improve the chips by adding new features.

But Intel hasn’t been able to hit the every-other-year schedule for reducing scale. To get from 45 nm to 32 nm took about 27 months, 28 months to go down from there to 22 nm and 30 months to shrink to the current 14 nm process. And that’s where Intel has been stuck since September 2014. New 10 nm chips are finally expected towards the end of 2017.

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The point of Tuesday’s presentations was to explain—and magnify the focus on—all the other techniques Intel uses to improve its chips.

“The world moves on,” Intel executive vice president Stacy Smith, who oversees the manufacturing side, tells Fortune. The company is “constantly looking to find that optimization point” of all the different methods for improving its chips every year. “And our commitment to our customers is that we do that on an annual cadence,” he says.

It fell to Intel president Murthy Renduchintala during the presentations to explain the changing metaphor. “We’re going to do away with the tick-tock metaphor and replace it with a metaphor based on waves of innovation,” he said. As Intel moved to a new scale for printing chips, it could would follow for several years with annual “waves” of improvements, he explained.

Another goal of the over-four-hour program was to attract the growing legions of companies that design chips but don’t own their own semiconductor manufacturing factories. Apple (AAPL), for example, runs the iPhone 7 using its custom A10 chip which is made by others, though not Intel.

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CEO Brian Krzanich has been building Intel’s business as a chip maker for hire, printing up chips designed by other companies at its cutting-edge foundries, instead of using the factories exclusively for its own designs.

With massive consolidation in the semiconductor industry, only a handful of companies can even compete to make the most advanced chips, down from 13 ten years ago. Beyond Intel, the list currently includes only Samsung (SSNLF), Taiwan Semiconductor (TSM) and GlobalFoundries, the AMD (AMD) spinoff created in 2009.

“It’s something we’re not just willing to do—we’re embracing it,” Smith says. Tuesday’s presentations were “a bit of a coming out party,” he says. “We’ve been building these capabilities, we’ve had some announcements along the way… but today we put it all together.”