Intel's Lunar Lake Chips: A New Era of Competition in the AI-Powered Processor Market

Intel's Lunar Lake chips to clash with Snapdragon X and Ryzen AI 300 from September

Intel breaks into the Copilot+ PC market with its Lunar Lake chips Intel brought about a new age of AI computing in December of last year with the release of the Core Ultra mobile processor, breathing life into the concept of the AI PC. Less than a year on and Intel is gearing up to launch its second generation of NPU-touting chips, code-named Lunar Lake. Ahead of this year's IFA 2024 showcase in Berlin, Germany, Intel's executive and vice presidents Michelle Johnston Holthaus and Jim Johnson will take to the stage to livestream the unveiling of the company's new Core Ultra 200 processors. Intel's Core Ultra 200 processors are a major upgrade to the company's original AI PC chips that will leapfrog Microsoft's 40 TOPS (trillion operations per second) requirements to become the first Intel chipset ready to act as the engine to Copilot+ PCs in the future. Intel promises that its upcoming livestream will reveal all the details on its Lunar Lake chips, including the new processors' "Breakthrough x86 power efficiency, exceptional core performance, massive leaks in graphics performance, and the unmatched AI computing power that will drive this and future generation of Intel products." Said live stream will take place Tuesday, Sept. 3 at noon ET (9 a.m. PT), and will be available to watch on the Intel Newsroom. Lunar Lake processors are expected to feature 4 P-Cores, 4 E-Cores, and up to 8 low-power Battlemade Xe2-LPG GPU cores. As for its AI capabilities, Lunar Lake chips are expected to offer 48 TOPs of performance, clearing Microsoft's barrier to entry into the Copilot+ PC market with ease. We may likely see a number of laptops outfitted with Intel's latest processor revealed at IFA 2024, which kicks off only a few days later on Sept. 6 in Berlin, Germany. However, we wouldn't expect an expansive range of Intel-powered Copilot+ PCs to feature. Lunar Lake will revitalize Intel's efforts in the AI PC category, but it won't give the company a free pass to the top. In years past, AMD was Intel's primary concern, however, this new generation of processors has brought about further competition for Team Blue -- Microsoft's current golden child and figurehead for the foundation of Copilot+ PCs, Qualcomm. Qualcomm's latest Snapdragon X CPUs have been a breath of fresh air for Windows computers, delivering excellent power efficiency, blazing performance, and unleashing the power of the NPU for vastly improved AI computing in a local setting. The excellence of Qualcomm's latest generation of chipsets has led to many comparisons with the M-Series chips found in MacBooks, placing many Windows computers in a position that genuinely threatens Apple's mobile dominance over the last number of years. However, Intel will still have to maintain pace with AMD, which has recently seen its Ryzen AI 300-series "Strix Point" processors hit the market in several consumer laptops. AMD's next-gen Zen 5 processors go all-in on performance with integrated Radeon 800M graphics and an XDNA 2 NPU registering up to 50 TOPs of highly efficient AI processing power -- greatly surpassing the minimum requirements set by Microsoft for chips looking to power Copilot+ branded PCs.

Intel Lunar Lake is 'almost entirely' outsourced as Panther Lake and Clearwater Forest get powered on

Intel's results for the second quarter as well as its outlook for the third quarter were, to put it mildly, nothing to write home about. During its earnings call with financial analysts and investors, the company took some time to talk about its roadmap and its financial implications on its results in the future. It appears that Lunar Lake and Arrow Lake CPUs are on track, whereas next-generation Panther Lake and Clearwater Forest processors have powered on. While Intel's Core Ultra Series 2 'Lunar Lake' processors, due to be announced on September 3 and shipped in volume in Q3 are expected to offer very competitive performance at a very low power, these CPUs are targeted primarily at thin and light notebooks. Furthermore, Intel confirmed that these parts are almost entirely outsourced, so their costs will be fairly high. "[Lunar Lake] will be the ultimate AI CPU on the shelf for the holiday cycle," said Pat Gelsinger, chief executive of Intel. "Microsoft has qualified Lunar Lake to power more than 80 Copilot+ PCs across more than 20 OEMs which will begin to ship this quarter. Lunar Lake will quickly be joined by Arrow Lake, which will scale AI to the desktop category next quarter." However, since Lunar Lake's three tiles seem to be made at TSMC and the only thing that Intel will do for this CPU is its advanced packaging, the cost of Lunar Lake will be fairly high for Intel, and will likely impact Intel's margins in the coming year. "The AI PC is a big winner for the company and the early signals on the performance of Lunar Lake are very positive," said David Zisner, chief financial officer of Intel. "We therefore intend to ramp that product significantly next year to meet market demand. While the part is great, it was originally a narrowly targeted product using largely external wafers and not optimized for cost." There is good news too. As it appears, the company's next-generation 'Panther Lake' processor for client PCs and Clearwater Forest CPU for servers have powered on and show promising results. Both processors are set to be made internally using Intel's 18A (1.8nm-class) process technology, which promises higher performance, lower power consumption, and higher transistor density in addition to lower costs for Intel, which will positively affect Intel's margins. "Our [process technology development] efforts will culminate with the introduction of Panther Lake in the second half of 2025," said Gelsinger. "Panther Lake is our first client CPU on Intel 18A, a much more performance and cost competitive process, which will officially allow us to bring more of our tiles in house, meaningfully improving our overall profitability." Intel's codenamed Panther Lake is due in the second half of 2025. Another Intel 18A-based product will be available sometime after Panther Lake: the Clearwater Forest datacenter CPU that will succeed the company's 288-Core and 144-core Sierra Forest processors and early samples of Clearwater Forest look promising. "The early health of Clearwater Forest is really spectacular," said Gelsinger. "This is really stunning. A technical achievement with the new design 18A, this level of health this early in a major server product is really spectacular. The new Foveros Direct [packaging] should have substantial TCO benefits for next year."