According to unnamed industry sources, Intel has decided to slash the prices of its 12th Generation ‘Alder Lake’ Core processors. Taiwan’s DigiTimes says that Intel will chop up to 20% off Alder Lake CPUs for its PC partners. The source indicates that this price cut will be to encourage orders/boost demand, with hints that the cuts will affect both desktop and laptop CPUs. On top-tier products, the cuts could mean a price cut of up to $130 per processor.
Recent Intel news has pointed to turbulence taking the business off course. Earlier today, Intel confirmed wide-ranging cuts to wages and bonuses for ALL employees. Last week the chipmaker posted its largest loss in years. In recent weeks we have also learned about Intel canceling R&D expansion plans, like the IDC21 in Israel and the Hillsboro Mega Lab in Oregon.
With the above series of unfortunate events weighing heavily on the management team, they have decided part of the answer is to make Alder Lake processors more affordable – if the DigiTimes sources are correct. The recent results show that Intel is holding uncharacteristically high inventories, with a particularly sharp rise seen in Q4 2022. Meanwhile, its customers are thought to be cutting their inventories to historically low levels. Intel management must reckon that 20% cheaper Alder Lake will help clear stocks of the old chips, but DigiTimes says that companies who bought stocks ahead of the new year are now “furious” with the pricing switcheroo.
As well as upsetting partners, there are other clear problems with Intel’s policy. For example, in a market where demand is already sluggish, pricing may have to come down more dramatically to inspire a revival. One must also weigh any possible sales bump in Alder Lake systems that could come at the expense of Raptor Lake systems – and not just cut into rival AMD’s sales.
[DigiTimes] Intel will cut 12th Gen CPU price as much as 20%https://t.co/FcZpu5JdjFHere is price chart. I cut from new price. pic.twitter.com/sDt6Mf9dTjFebruary 1, 2023
If you want some idea as to the scale of the price cuts which are rumored to be impending or already in effect, Twitter’s Harukaze5719 has put together a little chart (expand above) that shows the launch price, Q4 2022 price uplift, and the resulting price if a 20% cut was applied. According to this chart, some top-end CPUs could be cut by as much as $130. However, please note the Intel tray prices don’t precisely tally with the retail prices to consumers. Also, DigiTimes implies these cuts are for Intel system making partners like Acer, Asus, Dell, HP, Lenovo, MSI and so on.
Intel has some hope that there could be a turnaround in the fortunes of the PC business in H2 this year, and a number of supply chain sources speaking to DigiTimes are more positive about H2, too. Thus, in some ways, significant Alder Lake price drops could be a good opportunity to snag a more affordable Socket LGA1700 PC, which could be upgraded to Raptor Lake or even a Raptor Lake refresh processor further down the line.