Intel denies server chip price cut rumors

Intel has denied reports it has cut the price of its Xeon chips in a bid to reinforce its position in the server market.

Speaking to TechRadar Pro, an Intel spokesperson said the company’s server CPUs have always been competitively priced, but there are no specific plans to offer discounted rates.

The rumor appears to have stemmed from a DigiTimes report that suggested the semiconductor giant was making changes to its pricing plans in an effort to repel competition from AMD, which has made significant gains in the CPU market of late.

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Intel server chip rumor

Although the price cut rumors turned out to be false, Intel will nonetheless hope to bolster its position in the server market as it forges a fresh path under new CEO Pat Gelsinger.

The market is of particular strategic importance due to 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.

The company benefits from a couple of distinct advantages over its rival: scale and in-house manufacturing capabilities.

Unlike AMD, Intel is an integrated device manufacturer, which means the company both designs and manufactures its semiconductors in-house. While AMD is reliant on TSMC’s oversubscribed 7nm manufacturing process, Intel has much tighter control over its own supply.

There is also a 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 has a more diverse collection of revenue streams. This financial firepower gives Intel an additional measure of freedom and flexibility unavailable to its competitor.

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.

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