According to DigiTimes' PC industry sources in the upstream supply chain, Intel is cutting Alder Lake CPU prices for the second time this year. Insiders say that Intel cut Alder Lake CPU prices for major PC brands by as much as 10% in Q2 and is prepared to slice another 5% off its newest gen processors, including mainstream Core i5 and high-end Core i7 chips.
The outlet claims that Intel cutting the prices of current-gen processors like this is unprecedented, saying that Intel has traditionally reserved this scale of cuts to previous-gen processor series, or to a small segment of processors that address a particular niche market.
However, the shadow of a recession is looming, and some telling signs are already being seen by the PC industry. H2 2022 PC orders have been "far weaker than expected," says DigiTimes. For example, one of the big-5 PC makers is ready to cut its July order pull-ins by 70-80%, according to the source.
If you need more recent evidence of the scale of the PC and tech industry slowdown, China recently had its annual 618 shopping festival. Sales during this event were 20 to 30% lower than last year.
Some PC makers will be watching Intel's price-cutting reactions and biding their time. Traditionally, PC makers will have quite high inventories at this time of year, so some are probably pushing back orders to get cheaper CPUs from price cuts down the line. We must also not forget the launch of new families of PC processors from both Intel and AMD are getting closer. Intel's Raptor Lake is expected to appear in Q4, and AMD Ryzen 7000 CPUs (and AM5 motherboards) should turn up even sooner – this fall. As reported yesterday, the next-gen processors aren't expected to be enough to spark a PC industry boom, however PC enthusiasts might be excited about the new technologies.
Much of the DigiTimes report takes the perspective of the big-5 PC makers. However, the downbeat feeling about the PC industry isn't confined to mainstream PCs. Enterprise PCs sales are also seeing some deceleration, and if this malaise spreads to gaming PCs "the PC market will be in big trouble," indicated the president of Compal Electronics, a sizable ODM.
