That, along with mixed PC sales trends, could make it tough for the chip giant to grow its PC CPU sales over the short-to-intermediate term, even if they’re unlikely to fall off a cliff.
Intel’s Computex Announcements
During a Tuesday event taking place at Taiwan’s massive Computex trade show, Intel unveiled the Core i7-8086K, a new high-end desktop CPU that could prove popular with gamers. Like the Core i7-8700K — previously the most powerful chip in Intel’s high-end “K” series line — the 8086K contains six cores and supports 12 simultaneous threads. However, whereas the 8700K has a base clock speed of 3.7GHz and a turbo speed of 4.7GHz, the 8086K respectively has base and turbo speeds of 4GHz and 5GHz.
Intel has also used Computex to disclose it plans to launch a massive 28-core/56-thread chip for its top-of-the-line X-series family (aimed at workstation and enthusiast users) later this year, along with less powerful X-series chips. With the most powerful X-series chip — the 18-core/36-thread Core i9-7980XE — currently selling for $1,999, the 28-core chip could very well cost over $2,000.
In addition, Intel says it will refresh its mainstream S-series desktop CPU line later in 2018, as well as its U-series and Y-series notebook CPU lines. The U-series targets ultrabooks and notebook/tablet hybrids, while the Y-series is meant for ultra-low-power systems.
One other Intel Computex reveal: A low-power display technology solution (it’s supported by LCD panel makers Sharp and Innolux) that Intel claims can cut LCD power draw by 50%. However, the solution requires the use of Intel’s integrated GPUs; those preferring to use a more powerful discrete GPU from AMD or Nvidia (NVDA) are out of luck.
Intel vs. AMD
The 8086K is being revealed about six weeks after AMD launched (along with three cheaper desktop CPUs) the Ryzen 7 2700X, an 8-core/16-thread chip that undercuts the 8700K’s pricing while holding its own performance-wise. Intel hasn’t yet announced the 8086K’s price, but the promotional text for a giveaway suggests it will be around $425, which would make it about $75 more expensive than what the 8700K is available for online.
The new X-series chips aim to put Intel on better footing compared with AMD’s Ryzen Threadripper line, whose performance and relatively aggressive pricing has made it popular with enthusiast PC owners. The most powerful Threadripper chip, the 16-core Ryzen Threadripper 1950X, is available for less than $900 online and has had little trouble outperforming comparably priced X-series chips. Second-gen Threadripper CPUs expected to deliver moderate performance gains relative to the current lineup are due later this year.
Along with solid GPU demand, desktop CPU share gains were a big reason why AMD’s Computing & Graphics segment saw revenue rise 95% annually in the first quarter to $1.12 billion. And while AMD’s PC CPU sales growth is bound to slow in the coming quarters, further desktop share gains and a modest amount of notebook processor traction should allow it to remain at a healthy double-digit level in the near-term.
Qualcomm’s Computex Announcements
Six months after Qualcomm, Microsoft (MSFT) and a handful of big PC OEMs unveiled Windows 10 notebooks powered by Qualcomm’s Snapdragon 835 processor/modem (found in many of the high-end Android phones launched in 2017), Qualcomm has unveiled the Snapdragon 850, a chip meant specifically for Windows 10 systems. The 850 relies on a 10nm manufacturing process (more advanced than the 14nm process the 835 relies on), and also packs a more advanced 4G modem (the Snapdragon X20). Devices featuring the chip are promised to arrive later this year.
Reviews for the Snapdragon 835-powered systems that have launched to date have been mixed: Reviewers have praised the devices’ long battery lives (often over 20 hours) and always-connected mode (it lets notebooks instantly wake and download data in the background the way a phone can), but often criticized their performance and app compatibility issues. As Qualcomm and Microsoft try to improve app compatibility, the 850 could address the performance complaints.
Qualcomm also says it has teamed with Sprint (S) to provide free unlimited data this year for Snapdragon-powered notebooks from HP (HPQ) , Lenovo and Asus. Consumers need to use Sprint’s AutoPay service to be eligible. As Qualcomm contends with sluggish high-end smartphone demand and licensing disputes with Apple (AAPL) , Huawei and regulators, it’s eager to grow its PC, automotive and IoT chip sales.
The Big Picture
Intel is coming off a first quarter in which its Client Computing Group (CCG – it services the PC and mobile chip markets) saw revenue rise a modest 3%. While sluggish consumer PC unit sales and AMD’s desktop share gains have been weighing, improving business PC demand has propped up volumes some, and healthy demand from the gaming PC and high-end notebook markets has lifted Intel’s average selling price (ASP).
With the help of its impressive 8th-gen Core CPU launches and the big investments it has made in improving battery life, Intel is still on pretty strong competitive footing in the high-end notebook market. And Intel’s Computex announcements provide fresh reasons to think it will remain a formidable rival to AMD in the desktop market.
However, the current business PC upgrade cycle won’t last forever, and AMD and (to some extent) Qualcomm’s roadmaps leave them well-positioned to gain further ground. Helping their cause: The delays seen for Intel’s 10nm manufacturing process, which now isn’t expected to see volume production until some point in 2019. With AMD and Qualcomm both expected to launch processors in 2019 that rely on 7nm processes viewed as competitive with Intel’s 10nm process, Intel can’t count on a manufacturing process lead to help stave off rivals.
And with those rivals willing to price their chips aggressively to take share, keeping CCG’s revenue growth positive won’t be an easy task unless PC demand improves significantly.