Intel has announced its second-quarter financial results, reporting that growth was in line with expectations, but that profit fell three percent year over year.
However, Intel also said that its transition to 10nm chips will now come later than expected, pushed back to the second half of 2017, and the firm plans to bridge the gap with a third generation of 14nm Core processors.
On the financial side, Intel said that it expects factors to boost performance for its next quarter and into the future, including the upcoming Skylake processor architecture and the launch of Windows 10.
Skylake will be Intel's second generation of 14nm chip, following on from the current Broadwell family but introducing a new and improved microarchitecture, representing a 'tock' in Intel's 'tick-tock' development model.
This was to have been followed by a die-shrink to 10nm to produce a successor known as Cannonlake. This will now come later than planned, and will be preceded by an extra 14nm family called Kaby Lake.
The delay is down to technical challenges in continuing to shrink transistors down to ever smaller scales, while ensuring that they can be manufactured in high volume, according to Intel chief executive Brian Krzanich.
"The last two technology transitions have signalled that our cadence today is closer to 2.5 years than two," he said.
"To address this cadence, in the second half of 2016 we plan to introduce a third 14nm product, code named Kaby Lake, built on the foundations of the Skylake micro-architecture but with key performance enhancements. Then in the second half of 2017, we expect to launch our first 10nm product, codenamed Cannonlake."
This is expected to deliver new features and improved performance, and pave the way for a smooth transition to 10nm.
Meanwhile, Intel reported Q2 revenue of $13.2bn, down five percent year on year, operating income of $2.9bn, down 25 percent, and net income of $2.7bn, down three percent [PDF].
"The Q2 results demonstrate the transformation of our business as growth in data centre, memory and IoT accounted for more than 70 percent of our operating profit and helped offset a challenging PC market," said Intel chief executive Brian Krzanich.
"We continue to be confident in our growth strategy and are focused on innovation and execution. We expect the launches of Skylake, Windows 10 and new OEM systems to bring excitement to client computing in the second half of 2015."
Windows 10 will launch on 29 July, and there is general expectation among analysts and hardware vendors that this will lead to a boost in flagging PC sales.
Intel revealed $175m in restructuring charges, and $4.9bn in research and development and mergers and acquisition costs.
Intel announced leadership changes earlier in July, including the departure of Intel president Renée James after 28 years, and said that the transformation efforts are paying off. When the leadership changes were announced, Krzanich said that Intel is becoming more open to change and efficiency.
Intel recently announced its intention to purchase rival Altera for $17bn, which Krzanich believes will boost Intel's position in growing markets.
"With this acquisition, we will harness the power of Moore's Law to make the next generation of solutions not just better, but able to do more," he said.
"Whether to enable new growth in the network, large cloud data centres or IoT segments, our customers expect better performance at lower costs."
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