Intel has reportedly cut the price of its range of server processors, in a move that appears designed to put pressure on its main rival, AMD.
AMD has made incredible headway in the CPU market in the last year, with data from workstation distributor Puget Systems placing the company’s share at 60%, up from just 5% in June 2020. In the server chip market specifically, the company is said to hold 9.5% share, up 4% year-on-year.
However, AMD is currently limited by supply constraints that are preventing the firm from capitalizing fully on demand.
In a bid to capture clients who cannot afford to wait around for AMD to upgrade their server infrastructure, Intel is attempting to both undercut and out-supply its competitor.
Intel’s advantage
Unlike AMD, Intel is an integrated device manufacturer, which means the company both designs and manufactures its semiconductors in-house. While AMD (a fabless semiconductor firm) is reliant on TSMC’s oversubscribed 7nm manufacturing process, Intel has much tighter control over its own supply.
Other factors include the massive revenue disparity between the two firms – Intel took in $77.9 billion in 2020, while AMD generated a comparatively small $9.7 billion – and Intel’s more diverse collection of revenue streams. This financial firepower gives Intel the opportunity to tweak a greater number of parameters that can lower the cost for end clients.
As it forges a fresh path under new CEO Pat Gelsinger, Intel will look to reinforce its position in the server market, which is of particular strategic importance given the friction involved in switching from infrastructure based on Intel CPUs to AMD CPUs, and vice-versa. In other words, once a customer is locked into the ecosystem, it would take a significant performance leap or price drop to incentivize a switch.
Of course, Intel will look to step on AMD’s toes in the GPU market too, potentially in both a datacenter and consumer context. Intel Arc, the company’s first line of discrete graphics cards, is set to create a major stir when it debuts early next year.
Via Tom’s Hardware
