SAN FRANCISCO — Intel announced the appointment of yet another big name chip architect and provided more evidence that its multi-year quest to diversify beyond the PC is finally paying dividends. But the company also pushed volume production of 10nm chips from late this year to next year, saying progress in improving yields is slower than expected.

In a conference call with analysts following its first quarter earnings announcement, Intel CEO Brian Krzanich said Intel is shipping 10nm products in low volumes and that yields are improving, but that the rate of improvement is slower than the company expected.

Brian Krzanich
Brian Krzanich

"As a result, volume production is moving from the second half of 2018 into 2019," Krzanich said. "We understand the yield issues and have defined improvements for them, but they will take time to implement and qualify."

Krzanich said the yield issues are tied to defects resulting from the amount of multi-patterning required for 10nm, the last node before Intel will begin using extreme ultraviolet (EUV) lithography at 7nm.

Intel reported a 9 percent increase in first quarter sales and raised its sales target for the year to $67.5 billion from $65 billion. The company also said non-PC products accounted for 49 percent of its sales in the first quarter, a new high water mark for the company that has spent more than a decade pushing to diversify beyond its core PC business.

Intel said Jim Keller, a 20-year design veteran whose career has included prominent roles with Apple and AMD, will join the company as a senior vice president leading its silicon engineering group. Intel hired Keller away from Tesla, where he had most recently been vice president of autopilot and low voltage hardware.

Jim Keller
Jim Keller

Keller's appointment comes a five months after Intel lured Raja Koduri away from AMD and installed him as chief architect of its core and visual computing group to lead its edge computing initiative.

Among the milestones of his career, Keller led the development of Apple's original A4 custom mobile processor and its successor, the A5. He also led the development of AMD's Zen architecture while serving as AMD's chief cores architect.

Intel's first quarter sales increased to $16.1 billion, up from $14.8 billion in the first quarter of 2017. Intel reported a net income for the quarter of $4.5 billion, up 50 percent compared with the first quarter of 2017.

Intel said its memory business had record revenue of more than $1 billion in the first quarter, an increase of 20 percent from the year-ago quarter.

— Dylan McGrath is the editor-in-chief of EE Times.