When the data shows a 9% decline in data centers and their business despite the average ASP price dropping 7%, you can fear the worst, since you are lowering the cost for companies and individuals and still you are falling in the market. That’s why Intel’s strategy of not making their processors more expensive and keeping the prices down by assuming the cost increase seems to be a smart and maybe even brilliant strategy, but AMD doesn’t see it that way and today they have shown their point of view.

Intel cuts costs, AMD keeps them and material prices soar

AMD vs Intel CPU

Two strategies and only one judge: time. The market is the jury, the economic data is the sentence. This is how we could see the scenario that the two biggest CPU companies in the world present us with, but the way they compete is different. Intel has an ultra-mature process such as 14 nm ++, very cheap, taken to the limit of its efficiency yes, but terribly competitive in costs.

In addition, extending its useful life has allowed its 10 nm to lower its total cost by 45%, increasing its production capacity and giving life to a more energy efficient second generation, so maintaining prices is the icing on the cake.

On the opposite side of the ring we have AMD, where TSMC’s 7nm is still expensive to manufacture (latest data is still above 5 digits per wafer) and where the new 5nm is skyrocketing to $17000 a 300mm wafer (and rising).

The data center market will dictate the price of desktop CPUs.

Intel-vs-AMD

This has actually been the case for many years, but the diversification of current strategies has temporarily made way for different server and desktop nodes in CPUs. Logically, this was once enabled by AMD’s non-competition, but now the scenario is different. Both AMD and Intel are putting all the meat on the grill in CPU and therefore, server or desktop all processors will integrate the latest node available to overcome the rival, if not in cores in performance, frequency or power consumption.

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For this reason and after knowing Intel’s approach, Lisa Su as CEO of AMD has slipped some statements that has made more than one nervous. She commented that in the data center processor market, performance and total cost are the priority and therefore the most important thing, while the final price is a secondary factor.

Knowing the advantages and disadvantages of AMD processors over Intel and vice versa, taking into account that all are going to integrate the latest in technology and processors.If we are lithographic, is this philosophy going to extend to desktop and common consumers? Are we going to see Intel processors at the expected level of performance and with a price equal or cheaper than AMD?

Place your bets and predictions …