Intel is selling server chips below their original price to be more competitive against AMD

Looking to improve your share of the server market, Intel would be offering chips below the suggested price to some clients. As reported by DigiTimes, Intel is taking advantage of the lack of supply from AMD to flood the market with its chips at a discounted price.

Intel can carry out these actions thanks to its vertical integration: Both the development and the manufacture of the chips are carried out by the company, which gives it the advantage of having more control over its costs, and therefore play with the final prices of its products to attract those customers that AMD cannot supply for the moment.

Recall that AMD increased the share of the server market significantly thanks to the great success of its AMD EPYC that have more cores and better energy efficiency than Intel’s Xeon, so the blues are doing everything in their power to get that market back. According to statistics from Puget Systems, AMD increased its share of systems sold from 5% in June 2020 to 60% in June 2021, having a massive increase in just one year. Nevertheless, AMD is struggling to meet demand due to ongoing pandemic and component shortages, and for this reason Intel presents this attractive proposal for companies to use their products again.

This strategy is primarily important in the server and HPC markets, as changing the entire infrastructure of a server from Intel to AMD or vice versa requires a significant investment. For this reason, if Intel can bring companies back now, ensures that they continue to update their products in the future, so you will not only have a profit now, but also in a two years.

According to Mercury Research, AMD achieved a 9.5% share of the global server market during the last quarter, 1% lower than in the first quarter of 2021, where the company’s share was 10.5%. Apparently, AMD’s lack of supply and Intel’s new pricing strategy have been a deciding factor for customers, and therefore the blues are recovering the market again. It will be interesting to see how this battle continues and if this strategy from Intel allows it to regain its leadership.

Will Intel be able to increase its market share with these discounts on its server processors?

Source: Tom’s Hardware