June 21, 2019
Joel Hruska

Rumor: Intel Could Cut CPU Prices Ahead of AMD’s Ryzen 3000 Launch

There’s a rumor going around that Intel could be preparing to cut its CPU prices significantly, thanks to AMD’s upcoming Ryzen 3000 family launch. What’s less clear is whether it represents an actual potential outcome or merely wishful thinking.

According to DigiTimes (subscription required), Intel could cut CPU prices by up to 15 percent in response to AMD’s upcoming Ryzen parts, and it’s already notified motherboard manufacturers of this change. It’s possible that Intel will take this step, but judging by the company’s actions since before AMD introduced Ryzen in 2017, it’s pretty unlikely.

Ryzen-CPU-Stack

AMD’s Ryzen 3000 CPU stack, compared against Intel’s equivalents at present. Image Credit: AMD.

Intel has taken a number of significant steps to improve its products since the months before Ryzen debuted. It added Hyper-Threading to some Pentium-class processors, and then, with the 8th Generation family, increased the core count on its various CPUs. Similarly, the Skylake family of HEDT parts increased core counts at the same price points. Six-core and eight-core CPUs from Intel are roughly half the price they were 4-6 years ago.

What Intel hasn’t done in all this time, however, is actually cut its CPUSEEAMAZON_ET_135 See Amazon ET commerce prices as such. Instead, the company has simply waited until it was time to introduce a new generation of parts and positioned the new CPUs more advantageously than the old. This has allowed Chipzilla to adjust its pricing to account for AMD’s competitiveness without incurring headlines like “Intel Could Cut CPU Prices Ahead of AMD’s Ryzen 3000 Launch.”

Intel doesn’t want to be seen cutting prices directly, because doing so implies you have competition in the first place. Not only that, but the fact that Intel’s HEDT parts have sustained their higher prices, even in the face of steep performance competition from AMD’s Threadripper, implies that the company hasn’t been facing much actual threat from these chips in the first place. If people were aggressively shifting their workstation buys from Xeon to TR, Intel would’ve been forced to respond already. The fact that it hasn’t suggests that they haven’t.

Intel’s CEO, Bob Swan, has previously acknowledged that his company expected increased competition from AMD in the server market and that gross margins could take a hit as a result, implying that some price cuts could happen but not where the company would take them. Currently, Intel’s higher-end parts are where the bulk of the price gaps practically are. An eight-core Intel CPU might be ~$500 versus $300 for an AMD equivalent, but a 16-core AMD CPU is ~$829 on Newegg, while a 16-core Intel Core i9 Skylake X is $1,700. It would take far more than a 15 percent price cut to bring the two chips into parity.

Based on Intel’s actions to-date and its competitive response to Ryzen, we suspect the company will cut prices only as much as it has to. It may or may not be willing to do so before the Ryzen 3000 family launches, and it could choose to focus price cuts on specific SKUs where it needs to improve its competitive standing rather than making across-the-board slashes. At the same time, it isn’t clear how much room Intel has to maneuver without finally making some price cuts on at least some parts. We’ll have to see how Ryzen 7nm parts stand competitively before saying more.

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