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Intel Responds to Competition from AMD

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Dec. 4 2020, Updated 10:52 a.m. ET

Intel responds to AMD’s Ryzen

Advanced Micro Devices (AMD) is launching its complete line of Ryzen CPUs (central processing units) in 2018. With this, AMD would compete with Intel (INTC) in almost every segment of the PC market. Moreover, AMD is offering some of its products at low prices to encourage customers to switch to Intel to get a better price-to-performance ratio.

Intel is transitioning away from the PC-centric business to become a data-centric business, which means that it wouldn’t compete as fiercely as it did in the past. However, Intel would respond to maintain its market dominance.

 

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Intel’s Coffee Lake processor

Intel made its first move in December 2017 with the launch of its eighth Coffee Lake processor, Core i7-8700K, for high-end laptops. With this, Intel upped its core count from its predecessor’s four cores/eight threads to six cores/12 threads in order to compete with the AMD Ryzen 7’s eight cores/16 threads.

In a hurry to compete with AMD, Intel only released one high-end Z370 chipset for Core i7-8700K, which required users to upgrade their motherboards and added $110 to the total cost of the system. Intel’s Core i7-8700K also offered support for overclocking and beat AMD’s Ryzen 7 in numerous tests. However, AMD offered better value for the money for users who don’t want to overclock.

In 1Q18, Intel overcame this issue and announced four cheaper motherboards—the H370, H310, Q370, and B360—for its Coffee Lake CPU, making it more affordable for the average consumer. The company also plans to launch its 10nm (nanometer) CPUs at the end of 2018, which it claims would deliver a significant performance boost.

Should AMD investors worry about Intel’s rumors?

An industry report, citing people familiar with the matter, stated that Apple is planning to develop its own PC CPUs for use inside its MacBooks and iMacs by 2020. At present, Apple uses Intel’s Core processors. This is not the first time a rumor about Apple developing its own processor has been floated. However, this rumor appears to be more practical than previous speculations.

Apple has already demonstrated its expertise by developing A-series processors for iPhones. The company also developed its own graphics processor and displaced its graphics supplier, Imagination Technologies. This shows that Apple has the capability and technology to build a PC CPU.

This rumor brings no immediate concerns for Intel but could subdue its long-term sales. On the other hand, AMD remains unaffected by the rumor as it supplies discrete GPUs (graphics processing units) to Apple.

Next, we’ll look at AMD’s graphics business.

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