Intel’s 18A Panther Lake For Client & Clearwater Forest For Servers Booted Up, 80+ Lunar Lake “Copilot+” PCs Shipping This Quarter, Meteor Lake Yields Fall Short

Intel has revealed the progress of its chip and process technologies such as Meteor Lake, Lunar Lake, Panther Lake & Clearwater Forest.

During its Q2 earnings call, Intel's CEO, Pat Gelisinger, made comments on the company's chip and process technologies. The earnings themselves are well, not the best as we reported here, but still, there is a glimmer of light in all the darkness that Intel is engulfed in right now.

Starting with Intel client-side updates, it looks like Intel's first-gen Core Ultra CPUs, codenamed Meteor Lake, encountered yield/throughput issues, as cited by Patrick Moorehead. Meteor Lake CPUs were the first mass-production run of the Intel 4 process node and the company switched them over to hot lots which is essentially moving them to the top of the priority lot.

It was a very rough Q2 for $INTC. And that guide... Thanks, @Pgelsinger, for the time to discuss.

It appears that there were yield/throughput issues on Meteor Lake, negatively impacting gross margins. When you have to get the product to your customers, and you have wafers to… pic.twitter.com/pHU66xvFe7

— Patrick Moorhead (@PatrickMoorhead) August 1, 2024

Although the company did report that it managed to ship over 15 million units of Meteor Lake so far in its Q2 earnings report and that it is on track for 40 million units by the end of the year, OEMs would've liked as many Meteor Lake chips as they could've gotten their hands on and it looks like Intel might have missed an opportunity here. The company is on track for 100 million "AI PC" unit shipments by 2025 and it is currently aiming to rectify some of the gross margin losses it had to deal with the early stages of Intel 4.

The follow-up to Meteor Lake is the 2nd Generation Core Ultra product called Lunar Lake and Intel is stating that it achieved production release ahead of schedule in July (last month) & will be ready to power more than 80 Copilot+ PCs across more than 20 OEMs (qualified by Microsoft) which ship this quarter. Intel recently confirmed that Lunar Lake CPUs will be launching on 3rd September so we are about a month away from the introduction. It is also mentioned that since Lunar Lake relies largely on external process technologies, it is not necessarily optimized for cost. This will result in the gross margins being up only modestly in the coming year.

While Lunar Lake targets thin and light laptops, it will be followed up by a brand-new product called Arrow Lake which will arrive on desktop platforms first. For Arrow Lake, Intel is expected to rely on either N3B or 20A process technologies, depending on the segment. As for segments, Arrow Lake is going to scale from high-end desktop PCs to laptops and Mini PCs.

After Lunar Lake and Arrow Lake, Intel is planning to introduce its Panther Lake CPUs. Panther Lake is going to bring the manufacturing of tiles back home as Intel states. These chips will utilize Intel's 18A process technology with production starting in the first half of 2025 and the chips rolling out by 2H 2025. Using 18A, Panther Lake is said to be a strong product that makes use of a performant & cost-competitive process.

At Computex, Intel announced that Panther Lake CPUs had achieved "Power-On" and right now, the CPUs are running Windows and looking "very healthy". The chips will also be the first to utilize several new technologies besides the new 18A process node such as RibbonFet, PowerVia & other advanced packaging technologies.

Lunar Lake, our next generation AI PC, which achieved production release ahead of schedule in July, will be the next industry wide catalyst for device refresh. Lunar Lake delivers superior performance at half the power, with 50% better graphics performance and 40% more power efficiency versus the prior generation. Lunar Lake delivers 3x more TOPs gen-on-gen with our enhanced NPU (neural processing unit) and will be the ultimate AI CPU on the shelf for the holiday cycle. Microsoft has qualified Lunar Lake to power more than 80 new Copilot+ PCs across more than 20 OEMs (original equipment manufacturers), which will begin to ship this quarter.

Lunar Lake will quickly be joined by Arrow Lake, which will scale AI to the desktop category next quarter. And as mentioned earlier, we are already gearing up to launch Panther Lake next year to further extend our leadership position. So, very good progress in CCG and a super strong roadmap over the next 18 months.

Our efforts will culminate with the introduction of Panther Lake in the second half of 2025. Panther Lake is our first client CPU on Intel 18A, a much more performant and cost-competitive process, which will additionally allow us to bring more of our tiles in-house, meaningfully improving our overall profitability.

Panther Lake for client is now running Windows and looking very healthy. This is the first microprocessor to use RibbonFet, PowerVia and advanced packaging, achieving a significant milestone.

The AI PC is a big winner for the company and the early signals on the performance of Lunar Lake are very positive. We therefore intend to ramp that product significantly next year to meet market demand. While the part is great, it was originally a narrowly targeted product, using largely external wafers and not optimized for cost.

As a result, our gross margins will likely be up only modestly next year. The good news is the follow-on product, Panther Lake, is internally sourced on 18A and has a much improved cost structure. As the momentum of AI PCs drives Panther Lake demand, together with the improvements from our new operating model and the cost savings from lower capital spending, we will be in a great position to see meaningful gross margin expansion in subsequent years.

Pat Gelsinger - Intel CEO  & Dave Zinsner - Intel CFO (Q2 Earnings Comments)

Switching gears to the Data Center side of things, Intel states that Clearwater Forest, its next-gen Xeon E-Core CPU family, will be using Foveros Direct and other advanced packaging technology & has already booted up and also looking ". The CPU family is on track for launch in 2025 and will be featuring up to 288 cores based on the Darkmont Core architecture. These will be the follow-up to Sierra Forest chips which are shipping in Xeon 6700E flavors while 6900E flavors will be shipping in Q1 2025.

Clearwater Forest for server, which also includes Foveros Direct and other key advanced packaging capabilities, is booted and likewise looking very healthy. These are the first of many Intel 18A products on track to bring Intel 18A to the mass market.

Looking to the future, we are excited about the launch of Clearwater Forest, our first Intel 18A server product featuring our industry-leading hybrid bonding. Clearwater Forest has achieved power-on and is on-track to launch in 2025.

Pat Gelsinger - Intel CEO (Q2 Earnings Comments)

Lastly, Intel offers an update on its process technology progression with the 18A PDK 1.0 already released last month and on track for manufacturing readiness by the end of 2024. The company also confirmed that the development of 14A and 10A nodes is also well underway.

The company also highlights 15 billion worth of committed deals on the 18A process node with more in the pipeline as many customers have been waiting for the PDK. So overall, while today might not be Intel's day, they are certainly moving in the right direction and if they manage to deliver smooth and timely launches of their next-gen processes and chips, then they can get back on the path to once again achieve the title of "Chipzilla".