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.
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Mark Tyson is a Freelance News Writer at Tom's Hardware US. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.
I just hope not only Intel, but AMD, nVidia and all their AIB partners understand the first world economies are entering a recession and they will have to concede lower margins in order to survive. Some may think "features", but the bulk of sales is never at the higher (read: features) end.Reply
So, I hope the new hardware pricing (let alone the old stuffs) tries to reflect these new realities of life a lot of people seems to be feeling right now, even.
Fran, I suspect all listed corporations will notice and adjust to changes in demand without (and long before) needing to see consumers warn about it based upon public news outlets.Reply
I think you also may not understand that their fattest margins are on non-consumer product lines (for data centers etc) anyway.
-Fran- said:So, I hope the new hardware pricing (let alone the old stuffs) tries to reflect these new realities of life a lot of people seems to be feeling right now.
Well said Fran! Most in difficult times like these and when our cash is simply continuing to go to the gas pump and putting food on the table, are not buying any consumer PC hardware. My meager lunchbox sandwhich and potato chips increased by 55% and I gave up drinking Moutain Dew all together. My crumpled-up plastic purified water bottle is now getting a refill out of my sink at home. Proffered hardware savings of 5%-10% and then in the very last few months of an outgoing tech-generation is most defintely not seeing the new realities or the light of day! Or the absence of cash in the pockets by the man on the street!
Oh no! Intel is reducing prices to the OEMs...new AMD lawsuit coming in.Reply
I don't know what planet you live on but the OEMs are mostly suppliers for huge co-operations, this 5-10% isn't going to you or the man on the street it's going to big business, they don't care about any of us as long as they can make millions of sales at once.Tom Sunday said:Proffered hardware savings of 5%-10% and then in the very last few months of an outgoing tech-generation is most defintely not seeing the new realities or the light of day! Or the absence of cash in the pockets by the man on the street!
Intel cut price for its Alder Lake CPU, because its new CPU Raptor Lake is coming, it takes a quarter or more to flush out the old parts before the new part becomes a main stay. This is the method what ODM normally do before they introduce new products, there is nothing new here; this author is exaggerating the impact of price reduction to prove his point. If you recalled just 20 some days ago, the SIA semi reported that the world semi sale in April 2022 was a record, especially in America, it reached $12B for the month ( in America, the most contribution in sale is Intel and Micron), a new record. It is likely the case in the following month (May 2022 and the rest of 2022) too. Thus, it is clearly contradicting to the news published by this author, while the speculators are trying to swam the market using this news, for their profit purposes.Reply
Honestly not surprising, I think a lot of demand was 'pulled forward' into 2020 and some into early 2021 due to covid lockdowns and shifts to WFH.Reply
What that means economically is, some of the demand that would normally be there in future years (i.e. 2022 and 2023) was burnt up in 2020-2021. I saw a ton of this first hand, people that were just fine with their 5 year old 7th or 8th gen laptop before covid suddenly pop up with a brand new laptop during covid. Same with desktop PCs, TVs, cell phones, home renovation projects, and so on - but particularly for 'shut in' types of products which is mostly electronic devices.
I have a suspicion that there may be be a couple of negative growth years across a wide range of highly discretionary categories as a result.