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Rumor: Intel Plans Desktop CPU Price Cuts—A Gambit Against AMD?

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Intel plans to slash desktop CPU prices

Intel (INTC) is currently in a tough spot as rival Advanced Micro Devices (AMD) prepares to launch its 7 nm (nanometer) Ryzen CPUs (central processing unit) on July 7. Taiwan’s DigiTimes, citing sources familiar with the matter, has reported that Intel recently informed PC and motherboard manufacturers of its plans to slash the prices of its eighth- and ninth-generation Coffee Lake desktop CPUs by 10%–15%.

The source didn’t mention which CPUs these price cuts will apply to or when the new prices will come into effect. It’s also unclear whether the price cuts will be for Intel’s original equipment manufacturers (who buy in bulk), for its boxed retail units, or for both.

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Tough times call for tough decisions

The last year has been tough for Intel. It’s undergone management changes, its 10 nm products have been delayed until the end of 2019, competition from AMD has picked up, it’s faced CPU supply shortages, and the performances of its x86 CPUs have been hit by hardware security flaws such as Spectre, Meltdown, and Spoiler. Adding to Intel’s troubles, the US-China trade war has dampened hopes of a rebound in the PC and server markets. All these factors have seen Intel stock rise less than 1% YTD (year-to-date), whereas AMD stock has risen 60% YTD.

It’s difficult to say whether Intel’s CPU price cuts would come because it’s resolved the supply shortages that have increased its CPU prices over the past year or because it wants to start a price war with AMD. Nevertheless, the CPU price cut is still just a rumor, and Intel hasn’t commented on it.

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