Intel intends to lower its server processor pricing to stay competitive with AMD

In recent years, AMD EPYC server processors have seized a large share of the server market from Intel by virtue of more core numbers and better price-performance ratio, facing competition from rivals, Intel has changed their server strategy to counter AMD’s competition.

According to DigiTimes, Intel intends to put chips into the server market at a discount, rather than insisting on the suggested retail price. At present, AMD’s CPU supply is still normal, but compared with Intel, they still lack their own factories, so they lack an important bargaining chip when negotiating with customers, and their EPYC processors are not as profitable as Intel. So there is relatively little room for bargaining.

Image: Intel

On the other hand, Intel’s development and production are under its own control, with a complete supply chain, and the market is large and profitable, therefore, the final customer pricing can be adjusted according to the actual situation, and they can pull more leverage to increase demand, and to attract AMD’s potential customers back to Intel’s chip. In fact, many opportunities AMD’s server cloud computing center operators are already considering switching to Intel processors.

AMD’s penetration in the server market is quite rapid. For example, according to the statistics of system distributor Puget Systems, AMD’s system sales share rose rapidly from 5% in June 2020 to 60% in June 2021. Intel is currently trying to win these customers back to the Intel chip. According to data from Mercury Research, AMD accounted for 9.5% of the global server CPU market in the second quarter of 2021, an increase of 4% compared with the same period last year, but a decrease of 1% compared with the previous quarter.