Intel’s Montevina notebook chips delayed
Microprocessor giant Intel Corp has confirmed with Electronic News that there will be delays in the rollout of its upcoming Montevina notebook platform, with the discrete iteration now shipping July 14 versus the initial target of late June, making it three weeks late. The integrated version of Montevina may now launch the first week of August, versus Intel’s prior plan of a broad-based July ramp date, making the chipset version approximately 1 month late.
Intel spokesperson Connie Brown confirmed that on July 14, the company will introduce its Core and Extreme mobile processors and begin initial shipments of some of those chipsets.
"We expect to ship our complete line of chipsets and wireless chips in high volume a couple of weeks later, the first week of August. We are taking the extra days to address two issues that require us to re-screen our chipsets with integrated graphics, and attend to some "Ts and Cs" (terms and conditions) mistakes while filing and testing our wireless antennas," she added.
The news prompted global finance company Lehman Brothers to note that while the delay may temper sentiment and reduce expectations for upside as well as lower visibility on its estimates in a back end loaded June quarter, Lehman maintained its estimates and rating for Q2 and Q3.
Based on its checks, Lehman believes the delay of Montevina is largely underpinned by two factors.
First, “checks indicate issues with both the discrete and integrated graphics within the chipset supporting the Montevina platform. Our research suggests that Intel has implemented an unscheduled update to the chipset as a result of these challenges, thus delaying the launch of both the discrete and integrated offering,” explained Lehman semiconductor analyst Tim Luke in a report today.
The Montevina platform is the successor of Intel’s Santa Rosa platform, and is a 45-nm Penryn Core 2 platform combined with the Contiga chipset, which Intel detailed at its developer forum in Beijing last year.
Impact too early to predict
Given the limited details on the total percentage of output in the second half of the year that may be affected by the delay, and the potential that Intel could supplement lost Montevina business with older generation Santa Rosa offerings (which Lehman believes may exhibit higher gross margins due to lower associated costs), Lehman believes it is too early to measure the impact to second half fundamentals, and will monitor any back-to-school impact for Intel.
Further, this delay could be positive for AMD and Nvidia, Lehman said. “Our research suggests an official launch for AMD's next generation PUMA platform in Q2 may also be pushed into Q3, however, while we do not expect a major shift in OEM design wins (assuming Intel does not have any further delays), we do believe this could provide AMD with both a beachhead to speak to OEMs that had previously decided to use Intel’s notebooks on a potentially exclusive basis, as well as potentially better traction with end-use customers that want integrated offerings (Intel’s integrated Montevina offerings will not be available until August),” Luke said.
Lehman said this may also be positive for Nvidia as well as AMD as the percentage of Intel’s initial offerings that were expected to have integrated GPUs will now have discrete GPUs – at least until August. And, a portion of the OEMs which were originally anticipating integrated Montevina products may settle for discrete platforms instead, thus increasing the total available market for discrete GPUs over the near-term. “This may benefit both Nvidia and AMD/ATI (the share of possible upside may depend on who wins the market share battle among the Motherboard makers, which is still somewhat debatable) given Intel offers integrated GPUs only,” he offered.
802.11n certification problems
A second reason for the delay concerns Intel completing the FCC certification for its next generation 802.11n WiFi technology which underpins its Montevina platforms. Lehman believes Intel that Intel is experiencing delays, but will resolve the issue soon.
“Without this certification, Intel would be relegated to selling its Montevina family of processors outside of the US. Within the US, the company would have the option of using older generation 802.11 (i.e., a/b/g) approaches. However, in our opinion, this is a minor detour and we expect Intel to resolve this issue over the coming weeks,” Luke wrote.
In the end, Lehman maintain its positive outlook for Intel on solid product positioning, noting that while the slippage of Montevina may temper sentiment and reduce expectations for upside to estimates in a back end loaded June quarter, our estimates and rating are currently unchanged for Q2 and Q3 as the company believes Intel is positioned well given its solid product roadmap and manufacturing lead over rival AMD.
Lehman said Intel CEO Paul Otellini may address this issue during Q&A for his morning key note at the global financial company’s wireless and wireline conference today.
Updated at 12:20 P.M. Pacific time to include comment from Intel.