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Intel Is Reducing Server Chip Pricing in Attempt to Stem the AMD Tide: Report

(Image credit: Intel)

Update 9/14/21 10:20am PT: Clarified details of market share and discounts. 

Original Article

According to DigiTimes, Intel has pivoted on its server strategy to fight a supply-constrained AMD, and is now offering more competitive pricing on its server processors. However, it's noteworthy that Intel hasn't changed its official recommended pricing, so these deals are likely coming as part of volume purchases with its largest customers. 

While some reports point toward a relative normalization of AMD's CPU supply, AMD has two distinct disadvantages compared to Intel: It has fewer revenue sources than its much bigger CPU rival, and it doesn't own the factories that produce its market-turning Zen chips. 

Intel, on the other hand, can leverage its vertical integration (meaning that development and manufacturing take place in an almost entirely Intel-owned and managed supply chain), as well as its massive revenue advantage, to adjust final pricing. In other words, Intel pulls a lot more levers to increase demand and (Intel hopes) attract would-be AMD clients back into the Intel fold.

AMD has been making steady strides in server market penetration, indicating that demand is strong for its chips. However, unserved demand means that companies looking to invest in their server infrastructure or who aim to deploy AMD chips in any major way sometimes can't wait for the chips to become available. And Intel is reportedly making it more attractive for those companies to go back to the Intel fold or to skip AMD in the first place. 

This is especially important in the server and HPC markets, where system choices today have a considerable impact on future choices. Changing up your whole server infrastructure from Intel to AMD or vice-versa usually brings more headaches (and a much greater investment) than simply upgrading through the same manufacturers' product stack.