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Will Intel try to crush AMD by giving deep discounts?

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UltraTaco

Member
Joined
Oct 28, 2017
It is a rumour I ran through while reading news. Tech radar and wccftech both ran a story featuring an internal slide..
Is it possible to see $89.99 i7 9700k ?

https://www.google.com/amp/s/www.te...n-worth-of-cpu-price-cuts-rumor-claims?espv=1

View attachment 207618

Intel has a strategy to fight back against AMD, and rumor has it that the chip giant’s tactics will be pretty simple – it intends to throw money at pushing Core and Xeon processors, and a ton of it: $3 billion (around £2.4 billion, AU$4.4 billion), the speculation suggests.

We should heavily underline that it’s one of the sketchier entries in the rumor category, coming from AdoredTV, who was apparently emailed a leaked slide from a recent Intel sales meeting.

Intel goes on the defensive against AMD at Gamescom
AMD Ryzen 9 3950X blows away Intel Core i9-9900K
There's a whole world of PC components out there
It's clear that Intel is under great pressure from AMD on the processor front – losing heavily to Ryzen 3000 in the desktop arena, and worse still, facing a threat from Epyc in data center territory – and the leaked slide holds that Intel’s advantage is “financial horsepower”.


(Image: © AdoredTV)
Specifically, the slide claims Intel has a ‘2019 Meet Comp Discount’ (the amount of money it's able to spend to disrupt competition) of $3 billion, which is 10 times the net profit AMD made in 2018.

Of course, we have to tread very carefully here because that slide could be faked, but it isn’t a massive leap to imagine that Intel has a raft of further price-cutting measures that it can use to fight AMD, given that we’ve already seen some evidence of this.

Intel recently revealed massive price cuts to incoming Xeon W CPUs (for servers) and Cascade Lake-X processors (powerful chips for enthusiasts and high-end desktops).

At the other end of the scale, certain popular budget processors from Intel have also just had a (much smaller-scale) price cut.

So are we about to see further cuts being made left, right and center, and maybe even far more competitive pricing for Intel’s next-gen Comet Lake processors for desktops (which are being powered up with hyper-threading, even at the low-end)?

Pay to win?
Possibly so, but what’s ruffling feathers here is that Intel is directing its coffers into simply outmuscling AMD financially, rather than putting these wedges of cash into research to actually power-up its processors and make them more competitive chips with the likes of Ryzen and Epyc. Of course, the latter would take time and entails a whole different world of complexity, whereas throwing money at the problem is an immediate and (relatively) simple solution…

As AdoredTV points out in his video, Intel has massively deep pockets, and it could easily afford far more than $3 billion to shore up its CPU sales, if that’s what was required (last year Intel made a profit to the tune of $21 billion – around £17 billion, AU$31 billion).

However, even if it makes sense in some respects, we have to treat this rumor with extreme caution, because as we’ve already noted, there’s no telling whether that slide is genuine or not.

Intel may be looking to combine the effect of price cuts – which it is definitely making in some measure, as we’ve mentioned – with any strain on stock that AMD may experience, because the latter is another potentially key factor in how the CPU wars will play out.

We’ve already seen Ryzen chips struggling to meet demand at the high-end, and with rumors flying around of 7nm shortages – issues compounded by the popularity of the iPhone 11 – Intel may be hoping to land a telling double blow on pricing and supply here.

Although ultimately, at least in the short-term, downward pressure on the prices of CPUs will be no bad thing for consumers, of course. The long-term competitiveness of the processor market might be another matter, though, if AMD begins to get outmuscled in this kind of fashion.
 

mackerel

Member
Joined
Mar 7, 2008
The further reference so called source I wouldn't trust as far as I could throw him. With that said:

Will Intel slash consumer or end user pricing? Hell no. For a given general purpose performance level, they will remain above AMD. They have far better brand recognition and that's what allows them to do such. This is a similar situation with nvidia. What about the HEDT 10 series you say? That technically isn't a cut. They were never offered at higher pricing. It's much lower than previous gen for sure. You can see it as an indication of the level of profit Intel were making on them, but that's about it. They're going to get less going forward, but they're not going in it to make a loss. The CPUs that have had price reductions, the change is relatively minor and even without a change in list price wouldn't be that out of line as they go through their marketing lifespan.

Can Intel use its cash to enhance sales? For sure. But it will most likely be in indirect ways. With anti-competitive laws in place, they have to tread carefully lest they do anything that might possibly be perceived as such. Selling at a loss to harm less deep-pocketed competitors would run afoul of that. Reducing their profits but still operating at what could be seen as a normal business model would not. If they support others to use Intel processors, they need to be careful not to be seen to be bribing them.
 

DaveB

Senior Member
Joined
Dec 18, 2000
With anti-competitive laws in place, they have to tread carefully lest they do anything that might possibly be perceived as such. Selling at a loss to harm less deep-pocketed competitors would run afoul of that. Reducing their profits but still operating at what could be seen as a normal business model would not. If they support others to use Intel processors, they need to be careful not to be seen to be bribing them.

:plus1: Intel needs AMD to stay healthy to keep the regulators off their back.
 

Alaric

New Member
Joined
Dec 4, 2011
Location
Satan's Colon, US
I don't think Intel wants to explain to the stockholders and the board how drastic price cuts are a good thing. And that would devalue the stock, leading to lots of sell orders and further devaluation. They'll go for competitive but they won't be giving away the farm anytime soon.
 

JrClocker

AKA: JrMiyagi
Joined
Sep 25, 2015
I don't think Intel wants to explain to the stockholders and the board how drastic price cuts are a good thing. And that would devalue the stock, leading to lots of sell orders and further devaluation. They'll go for competitive but they won't be giving away the farm anytime soon.

Yeah - I definitely agree with this. A "race to the bottom" on price is never a good business strategy. However, I will be upgrading my PC...maybe a Christmas break project!
 

Woomack

Benching Team Leader
Joined
Jan 2, 2005
I don't think that Intel's lower prices matter much. It will be visible only on the high-end market and it's like 3-5% of the market. They won't lower prices much on their most popular products as it's already not so expensive. Even though we see that $500+ chips sell good then in global scale it's a really low %. Most CPUs go to office and basic home PCs and there Intel still has like 70% of the market.
Intel lost much more in the last year because of problems with availability rather than higher prices. Some leading PC manufacturers went with AMD only because there was a shortage of some Intel chips. I still can't see AMD based servers in higher availability and laptops are still a joke. I would give it next 2 years and it should change some more but right now AMD is starting to convince the global market that they're worthy competitor.
 

petteyg359

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Joined
Jul 31, 2004
https://www.pcworld.com/article/344...s-processors-at-drastically-lower-prices.html

10c for $580... 18c for sub $1000.

Shots fired.


Edit: ill bet we see this on desktop. I dont think they will undercut amd, but we will see much closer pricing on a core per core basis.

48 CPU PCI-E lanes is laughable for HEDT with Threadripper lounging in the corner with 64... Also, reviews suggest those are 3.0, not 4.0, so even the Ryzen 3900x beats the pants off the cheapest one. 3900x is $100 cheaper, has 2 more cores, 100 MHz higher base clock, and only 4 fewer lanes (20x PCI-E 4.0 = 40x PCI-E 3.0).
 
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mackerel

Member
Joined
Mar 7, 2008
48 CPU PCI-E lanes is laughable for HEDT with Threadripper lounging in the corner with 64... Also, reviews suggest those are 3.0, not 4.0, so even the Ryzen 3900x beats the pants off the cheapest one. 3900x is $100 cheaper, has 2 more cores, 100 MHz higher base clock, and only 4 fewer lanes (20x PCI-E 4.0 = 40x PCI-E 3.0).

Like many things, you have enough or not enough lanes. 48 is a much bigger number than 16 of consumer platforms. 64 might be bigger still, but are they going to be needed? In some cases, maybe. Also right now, there is yet to be any killer app for PCIe 4.0. The SSDs supporting it are unremarkably faster for now. A nice to have for sure, especially if you're thinking of keeping the system for many years. But not a make or break advantage for now while meaningful support where it makes any real difference is practically non-existent. BTW please don't try to count up aggregate bandwidth in that way, that's worse than only comparing Cinebench scores...

You can pick scenarios where any one will be stronger, but at the end of the day it will come down to what a user really needs and they will make that choice. AMD is by no means an outright winner.
 

EarthDog

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48 CPU PCI-E lanes is laughable for HEDT with Threadripper lounging in the corner with 64... Also, reviews suggest those are 3.0, not 4.0, so even the Ryzen 3900x beats the pants off the cheapest one. 3900x is $100 cheaper, has 2 more cores, 100 MHz higher base clock, and only 4 fewer lanes (20x PCI-E 4.0 = 40x PCI-E 3.0).
Sorry, what do pcie lanes or type have to do with what I said or pricing or the thread? All I said was that I expect the desktop segment to do the same with pricing and be more competitive on that front. :)

White Knight?
 

freeagent

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Sep 15, 2004
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Will Intel try to crush AMD by giving deep discounts?

I think they employed similar tactics the last time AMD was doing well and cutting into their share. Both companies have some good deals on right now. For me its tough to choose. I know with Intel things will just work, and with AMD there is usually some kind of problem or bug to deal with. Usually when it comes to a new build, the choice is clear, but thee days you have to put some thought into it :D It seems both companies have a good product. I used to wave that AMD flag pretty hard, but got burned too many times, so now I am hesitant, and skeptical. Also, having those pins instead of pads is a bit of a bummer, but not a deal breaker.

But.. seeing so many people running AMD who weren't before has me thinking.
 

petteyg359

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Jul 31, 2004
Sorry, what do pcie lanes or type have to do with what I said or pricing or the thread? All I said was that I expect the desktop segment to do the same with pricing and be more competitive on that front. :)

White Knight?

The point is, per the thread title, the i7 is hardly being sold at a "deep discount". They still cost more than an equivalent AMD chip. They claim a few hundred MHz top boost clock and better TDP, but that's always questionable (plenty of reviews with software benchmarks, but no reviews with any kind of superconductive probe checking the wattage output on the CPU case :p). If you're buying HEDT for the highest single-core boost clock, you're doing it wrong :p Workstation CPUs have lots of connectivity for workstation motherboards that have lots of expansion slots that are there to be used by many threads of software.
 

EarthDog

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Point is, next gen desktop too. We saw smaller cuts in the existing lineup but still not there. $90 9700k is ridiculous and will never happen. But prices will be a lot better.

Cascade Lake X already has those cuts. I dont know what that will bring next gen desktop...but again, I bet it will be cheaper and a lot more competitive on price.
 
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freeagent

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I dont know what that will bring next gen desktop...but again, I bet it will be cheaper and a lot more competitive on price.

If you are referring to i5's with hyper threading, I cant see it being that good, can you? I mean sure more cores, more threads, more tweaks is nice to see.. but strip away the cache, and possibly neuter it in other ways.. just doesn't seem enticing to me, especially since you can build a monster AMD for probably roughly the same price, or go with an i7/i9. To me it seems like a tough spot to be in for Intel. AMD picked a good time to drop Ryzen into their lap. Youd figure a couple of years would be enough for Intel to slap a plan together. I think they need to go into their skunkworks and take something off the shelf, dust it off, and mod it for the masses.
 

Zerileous

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Jun 21, 2002
Based on the new releases it does does appear that x299 is competing more with x570 than with whatever Zen2 TR is cooking up or previous TR. Price per core is pretty much in direct competition, I just don't think they can do more than 8c on the consumer die with their current process. This gives AMD an opportunity to compete against x299 with Zen2 TR, but in doing so they'll also be competing against the top of their x570 lineup. TBH I don't see that much point in anyone who actually needs 10+ cores going with a mainstream desktop instead of HEDT, as most hobby editors can live with the lower performance if 8c and most users who's time is worth money can afford HEDT. I'm not saying there isn't a market for 12c / 18c consumer CPUs, but I think most of them are being sold to gamers who can afford to spend extra for cores hoping it will help in the future. Not saying this isn't a solid blow to Intel, but it's just interesting to see the consumer and HEDT markets starting to intersect.
 

EarthDog

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If you are referring to i5's with hyper threading, I cant see it being that good, can you? I mean sure more cores, more threads, more tweaks is nice to see.. but strip away the cache, and possibly neuter it in other ways.. just doesn't seem enticing to me, especially since you can build a monster AMD for probably roughly the same price, or go with an i7/i9. To me it seems like a tough spot to be in for Intel. AMD picked a good time to drop Ryzen into their lap. Youd figure a couple of years would be enough for Intel to slap a plan together. I think they need to go into their skunkworks and take something off the shelf, dust it off, and mod it for the masses.
I'm not thinking about anything except price and price per core to be more competitive in the mainstream space. How many cores and threads etc... no clue. But I'd guess they won t go more than 8c mainstream since the cascade lake x starts 10c amd goes up.

AMD and its 12c on mainstream really really blurs the lines of HEDT and mainstream. Not a huge fan of more cores first. Give me clocks, better ipc, and mhz..m