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Intel reportedly planning to unleash its financial might to counter AMD, price cuts for Core and Xeon processors to cost US$3 billion

Intel is reportedly planning to offer discounts to counter AMD's rising market share. (Source: Fstoppers)
Intel is reportedly planning to offer discounts to counter AMD's rising market share. (Source: Fstoppers)
A leaked internal Intel slide courtesy of AdoredTV talks about Intel's plans to counter AMD's increasing marketshare via price cuts that would cost the company around US$3 billion. Intel hopes that these price cuts would help its Core and Xeon offerings remain competitive, but AMD still has the advantage when it comes to leveraging TSMC's increased yields and margins for the Ryzen chips.

AMD has managed to wrestle-back significant market share from Intel thanks to the Ryzen and Threadripper processors that offer a higher performance per dollar compared to Intel's offerings. Not just with these CPUs, but Intel is facing stiff competition from the EPYC server lineup as well. Recently, Intel had internally discussed about AMD's "competitive profile" and is apparently looking at plans to thwart the latter's moves by showing its financial might — even if it turns out to be a bit costly.

Recently, an internal Intel document called "AMD Competitive Profile" leaked on Reddit, which detailed why AMD's offerings are successful and how Intel stacks up to them. Now, AdoredTV showed off what is likely to be an internal Intel sales slide that reads, "Intel's Scale Advantage... Financial Horespower". Before we go on, do note that the authenticity of the slide cannot be verified and there's literally no way of confirming this with Intel either. So, do take it with a grain of salt. 

The slide indicates that Intel's size and scale is still much higher than that of AMD's. So high that if Intel plans to offer discounts and other incentives for the current and upcoming Core and Xeon processors, it would have to cough up around US$3 billion in 2019 — 10x the figure that AMD had netted as income (US$0.3 billion) in 2018. This US$3 billion price that Intel is apparently willing to part with is being billed as a "2019 Meet Comp Discount".

US$3 billion shouldn't be too much of a worry for Intel, especially if it helps the company to remain competitive. We've already seen industry sources talking about Intel planning to cut prices for the 9th generation Core processors. Assuming that this is indeed Intel's strategy, it only serves to indicate that the Santa Clara-giant is trying to regain lost ground at least in terms of pricing if not in terms of performance. 

Thanks to some lofty ambitions that did not quite pan out as intended, Intel got delayed in its 10nm sojourn while AMD is en route to 7nm+ with Zen 3, with TSMC's capabilities playing to its advantage. Therefore, even if Intel offers decent price cuts, AMD can still hit back with even more aggressive pricing given the higher yields of Ryzen chips.

Would you prefer a lower-cost Intel 9th gen processor over AMD Ryzen 3rd gen? Let us know in the comments below.

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Intel may set aside US$3 billion as part of the "2019 Meet Comp Discount" initiative. (Source: AdoredTV on YouTube)
Intel may set aside US$3 billion as part of the "2019 Meet Comp Discount" initiative. (Source: AdoredTV on YouTube)
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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2019 10 > Intel reportedly planning to unleash its financial might to counter AMD, price cuts for Core and Xeon processors to cost US$3 billion
Vaidyanathan Subramaniam, 2019-10-14 (Update: 2019-10-14)
Vaidyanathan Subramaniam
Vaidyanathan Subramaniam - News Editor
I am a cell and molecular biologist and computers have been an integral part of my life ever since I laid my hands on my first PC which was based on an Intel Celeron 266 MHz processor, 16 MB RAM and a modest 2 GB hard disk. Since then, I’ve seen my passion for technology evolve with the times. From traditional floppy based storage and running DOS commands for every other task, to the connected cloud and shared social experiences we take for granted today, I consider myself fortunate to have witnessed a sea change in the technology landscape. I honestly feel that the best is yet to come, when things like AI and cloud computing mature further. When I am not out finding the next big cure for cancer, I read and write about a lot of technology related stuff or go about ripping and re-assembling PCs and laptops.