Intel reported its fourth quarter earnings today, with incoming CEO Pat Gelsinger and Omar Ishrak, Chairman of Intel’s board, joining outgoing CEO Bob Swan on the call. Intel posted yet another strong quarter and record year, but the promised update on its 7nm process and outsourcing strategy, which will see the company contract out production of some of its leading-edge products for the first time in its history, hung thick in the air.

Pat Gelsinger spoke on the call, saying that he has personally reviewed progress on the company’s 7nm process over the last week and that he is pleased with the “health and recovery of the 7nm program.” Gelsinger also said that, given the breadth of the company’s portfolio, Intel will expand its use of external foundries for some products but is confident that the majority of Intel’s 2023 CPU products will come from the company’s own factories. 

Notably, that timeline is still delayed relative to Intel’s original timeline for its 7nm process, but in line with the six-month delay the company outlined when it announced that its 7nm process was broken. 

Intel CEO Bob Swan weighed in with more details, saying that the company’s yield issues with the 7nm process stemmed from difficulties with a sequence of steps in the company’s production process, which Intel has re-architected and corrected. Swan also said that the company has simplified and streamlined the process, implying there may be some significant changes to the company’s performance or design targets. Chips based on the 7nm process will debut in 2023, with client processors coming first, and server products following. 

That timeline still leaves Intel’s competitors, like TSMC and Samsung, with a process node advantage in the 2023 time frame, thus explaining Intel’s continued need to outsource some products. 

Swan also reiterated the company’s commitment to preserving its IDM advantage, echoing his comments in our recent interview, meaning the company will still focus on producing its own chips in-house. Intel’s CFO also noted that the company is increasing its spending on internal 7nm production. 

Gelsinger also said the company remains committed to re-establishing its lead in process node technology. Gelsinger also noted that the company wouldn’t share its detailed plans until after he takes the CEO position next month. The company is also delaying its full-year outlook until its next earnings call. 

Intel’s press release also indicates that the company has quadrupled its ’10nm supply unit growth’, which has long been plagued by low yields, but didn’t provide a frame of reference about how much actual 10nm volume is in production.

This is breaking news…more to come…