Intel sells top server model with 128 cores at half price

Intel has to sell its server processors at low prices in order to maintain its own volumes against AMD's competition. In the case of the current top model from the Granite Rapids family, this is also evident in the retail sector: two stores are significantly undercutting Intel's recommended retail price for the 128-core Xeon 6980P (starting from 6259 €).

At the beginning of the year, Intel lowered the recommended retail price of the Xeon 6980P from 17,800 to 12,460 US dollars, excluding tax. This corresponds to around 10,675 euros or 12,700 euros with 19 percent VAT. The retail price has been half as high since June without anyone noticing. Wccftech recently drew attention to similarly low prices in the USA.

For other models with fewer CPU cores, the savings are less significant, at least at retail. As Intel does not intend the server processors for end customers, they are only available as so-called tray models without a manufacturer's warranty. Server manufacturers usually get special prices when they buy thousands of processors.

The price reductions are also reflected in the margin: Intel's server division achieved sales of 3.94 billion US dollars and an operating profit of 633 million US dollars in the last quarter, resulting in an operating margin of 16.1 percent. In the same quarter ten years ago, Intel's server division made an operating profit of just over 1.8 billion US dollars with almost the same turnover (47.9 percent margin).

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AMD gnaws away at Intel's market share

AMD recently shared a sales forecast based on Mercury Research's estimated processor unit sales. According to this, AMD estimates its sales share for x86 server processors at 41 percent, with a unit share of 27.3 percent. This means that AMD earns significantly more money per CPU than Intel.

AMD's top server model with 128 performance cores, the Epyc 9755, is only occasionally available at a lower price (starting from 5829 €) than the Xeon 6980P from unknown retailers. In reputable stores, the price ranges from 6632 to over 9000 euros.

AMD has the edge in terms of margin because the CPU cores are contained in up to 12 small chiplets. Due to the small size, the production yield is high, which lowers costs. AMD can save chiplets on cheaper models. Intel relies on three large compute chiplets for the largest Granite Rapids CPUs, which means that the savings potential is limited.

(mma)