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Intel admitted that it is forced to reduce server processor prices due to competition with AMD

Intel admitted that it is forced to reduce server processor prices due to competition with AMD

The discussion of the situation in the server segment at Intel's quarterly reporting event boiled down to management's attempts to warn investors against jumping to conclusions, as revenue and operating profit in this line of business fell in the second quarter. Regarding the delayed announcement of Sapphire Rapids, it was said that it was not caused by technology issues.

In general, during the whole event Intel was trying in every way to demonstrate that it's all right with 10nm technology. Ice Lake-SP server processors are quickly gaining popularity with their target customers. In the second half of the year Intel expects to increase server revenue by double-digit percent sequentially. Company executives had to explain that the 7 % decrease in the average selling price of server processors is mainly due to increased competition. In other words, AMD EPYC processors continued to gain popularity, and Intel had to counter this trend with a price reduction for its own products. In the second half of the year, Intel expects to keep not only the prices, but also the market share. With the lack of production capacity on the whole market, Intel has an advantage in the form of the opportunity to produce processors in its own facilities. The company promises to make every effort to regain lost market positions. Intel believes that the server market has passed its bottom in the first quarter, and by the end of the year it will show continuous growth. On the reasons for delaying the announcement of Sapphire Rapids until the next six months, the head of Intel said rather vaguely, but from his words we can conclude that the company's customers needed more time to validate all the changes that the new family brings. DDR5 support and PCI Express 5.0 were mentioned as those new features that take extra time to adapt. The artificial intelligence market, according to Gelsinger, will continue to grow by an average of 20 % annually, and therefore Intel could regain the leading position in all its segments, not excluding the server segment, by 2024. The performance of the Sapphire Rapids samples they have at their disposal, the company's customers are very satisfied, as Intel's head noted.

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