I am yet to see the real competitive advantage between 22nm and 16nm. All this quest to get down to the next lower feature size does not add much value. Transistor is free in the digital domain. The extra space saving is good but customers are not buying that. They are looking at great power performance which nanometer CMOS technology hampers by higher dyanamic and static power losses.
This makes much more sense. About 80% of 22nm equipment can be used for 14nm. To upgrade their 22nm facilities to 14nm appears to be a much better economical choice than upgrading their facilities which still run at 65nm or 45nm.
"The question is whether this is a 'shrink to grow' situation where they move to a new model or if it is just cutting costs to try to wring out a few more years on the old path."
I think they should go the IBM way i.e. become a service company with high end fab capability (and spin out the bulk of their fabs as a foundry business). I think that's what's gonna happen in the end....
Wow Samsung seems to be everywhere in the race whether its smartphone or Fab. I guess their marketing strategy and the fact that they belong to other region makes lot of difference. But yes demand for PCs is decreasing and no one can deny that.