Even Without Competition From AMD, Intel Cuts Quad-Core Prices

We have written many times on both the general oversupply condition building in the semiconductor industry and in particular the battle between Intel (INTC) and Advanced Micro (AMD) in the PC processor space. That latter topic resurfaced as a concern when we saw that Intel unexpectedly cut prices on its quad-core processors:

With the big Thanksgiving weekend in full swing, we are taking one more snapshot of processor etail pricing before the holiday shopping season officially enters the feverish final month. The chart kept some flexibility this week with the most significant changes happening on the very high end: The average price of Intel’s QX6700 CPU dropped $99 from last week.

Since AMD has no direct competitor to Intel’s quad-core design, it is somewhat troubling that Intel would be lowering the price so early. It is one thing to have aggressive price cuts in older designs in order to clear out inventory. It is quite another thing to discount the latest and, presumably, greatest products.

Comments

[Tech:]

Hi William,
When you say that AMD is no direct competitor to Intel,
this is partly true, and may explain why AMD proposal sounds better than Intel,
AMD is proposing today a platform with 2 dual core with the possibility to migrate to an 8 core system when AMD's quad core will be available.

I am not sure that Intel offers that today.
cordially
Michel

2006 Nov 30 11:19 AM

[William Trent_:]

Michel,

Thanks for the comment. Having two quad-core (or any number of core) processors isn't especially new. When Intel first announced their quad-core plans they showed it off on a system running two of them. My understanding is that it is trickier to design multiple cores on a processor than to run multiple processors on a system.

Trent

2006 Nov 30 12:20 PM

[Tech:]

Thanks William for your answer, what is different from AMD is that the SAME platform will accept dual or quad, Intel needs ANOTHER platform.
since this article AMD has even demonstrated their NATIVE quad core silicon, in line with perf/power expected and beating all existing Intel offering.

2006 Dec 03 06:02 AM

[sharikou 180:]

Expect this to be the first of cuts. I expect Intel to accelerate their quad core attack in 1H07 for the following reasons:

1. The faster Intel can move the market to quad core before AMD can release their product, the more advantage they have in the market.

2. More importantly, if they can move a chunk of the market to quad core, this once again puts pressure on AMD's capacity as it takes more sillicon to make quad cores as opposed to dual cores. Any supply shortfall means AMD has to walk away from their customer's which is a bad situation to be in.

3. Intel themselves are probably sitting on too much capacity. Because their quad core is really two Core 2 stuck together, this allows them to use their capacity while selling higher priced products.

Hence, their desire to drop prices. I suspect, we will see quad cores from Intel at 999USD by Q1 07.

Sharikou180
sharikou180.blogspot.c...

2006 Dec 01 02:33 PM