Future generations of Intel chips, including Panther Lake and Nova Lake, will not have baked-on memory, according to company CEO Patrick Gelsinger.

Gelsinger [pictured at top in Taiwan in June] made the comment during an earnings call to discuss Intel’s Q3 2024 results.

On the call were representatives from eight investors, including Deutsche Bank, UBS, Bank of America, Wells Fargo and Morgan Stanley.

Srini Pajjuri from investment bank and financial services company Raymond James, asked Intel executives “how much of an impact memory packaging is having on your gross margin? …  Why do we need to … combine memory in one package? And is this something that’s going to be ongoing or is it just a one-off?”.

Intel Lake Lunar CPU.

 

David Zinsner, Intel’s Executive Vice President and Chief Financial Officer, responded: “It’s having a pretty meaningful impact, a significant impact on Lunar Lake’s gross margins, and originally we were like a third of the volume in terms of our expectations next year on Lunar Lake when we recognised how important the AI PC market would be and how good this part was competitively.”

Zinsner said this led to increased production volume, which “has put some reasonable pressure on the gross margins for the total company”.

Gelsinger then chimed in. 

“Lunar Lake was initially designed to be a niche product that we wanted to achieve highest performance and great battery life, capability, and then AI PC occurred,” he said.

“And with AI PC, it went from being a niche product to a pretty high-volume product. So as that shift occurred, obviously, this became a bigger margin implication both for Lunar Lake and for the company overall.” 

 

Intel Lunar Lake.

He said Intel was “very pleased to have the option to scale Lunar Lake” due to the demand of AI PCs, but that in the PC industry “you don’t want to have volume memory going through that channel. It’s not a good way to run the business. So it really is, for us, a one-off with Lunar Lake. That will not be the case with Panther Lake, Nova Lake and its successors as well.”

Intel says it will ship more than 40 million AI PC processors this year.

Gelsinger said Intel in future will “build it in a more traditional way with memory off package in the CPU, GPU, NPU and I/O capabilities in the package. But volume memory will be off package”.