Intel Pentium CPU photographed after Intel revealed information about major flow in the chipsets.

Intel's manufacturing technology issues will haunt the chipmaker for a long time, according to Raymond James.

The firm lowered its rating to underperform from market perform for Intel shares, citing its delays in moving to its next generation chip process technology.

"Intel's biggest strategic problem is their delay on 10nm production – we don't expect a 10nm server chip from Intel for two years," analyst Chris Caso said in a note to clients Tuesday. "10nm delays create a window for competitors, and the window may never again close."

Caso does not have a price target for the stock.

The analyst noted the company's repeated delays in moving to the 10-nanometer chip process. Intel said in July that its 10-nanometer chips will be released by the 2019 holiday season compared with AMD's 7-nanometer server chip volume launch sometime next year. AMD uses TSMC to manufacture its chips.

One nanometer equals one-billionth of a meter. Smaller nanometer chipmaking technologies historically have allowed companies to create faster, more power-efficient chips.

"While Intel is standing still, TSMC isn't, so by the time Intel has 10nm in server we expect TSMC to be firmly in the lead," he said.

Intel shares are down 1.8 percent Tuesday. Its stock is up 1.6 percent this year through Monday versus the S&P 500's 9.2 percent return.

Caso also reduced his view of the semiconductor sector after spending a week in Asia talking to chip supply chain companies.

"Based on the data we collected, we have concluded that we have entered a cyclical downturn, and are downgrading the semiconductor group," he said. "We've seen this movie before, and what's happening now is consistent with a cyclical semiconductor industry downturn."

The analyst lowered his ratings for Analog Devices, Microchip and ON Semiconductor to market perform from outperform.

When asked for comment, Intel sent this statement: