Inspur Systems is one of the most prominent vendors of servers worldwide. A report by Mizuho Securities’ Managing Director Jordan Klein reveals recently that Dolly Wu, Vice President and General Manager of Datacenter/Cloud at Inspur Systems, anticipates AMD to increase the pricing on their data center processors. The information continues to show Intel’s Sapphire Rapids scalable processors will see delays in the release until the third quarter of 2022.
AMD plans to increase the EPYC data center processors’ costs, rising between 10 to 30 percent higher. Due to the current chip shortages worldwide, this comes as no surprise from consumers. When the website Tom’s Hardware reached out to AMD for comment, the company declined for two reasons—AMD and other notable companies never discussed pricing, including changes due to market stability. Secondly, AMD is coming up on its fourth-quarter earnings report. They continue to remain silent so as not to divulge any gains or losses to the general public or their competition.
On Intel’s front, the report shows Intel having to change the launch of their next-generation Sapphire Rapids processors for a second time, with an expectation of the third quarter of this year.
The report from Inspur Systems shows that AMD’s pricing will vary by customers but shows that customers utilizing large cloud systems will see less of an increase than other markets. What is also missing is a notification of when more processors will be available, but that customers of AMD expect and accept the increase in cost.
AMD Milan, the codename of AMD’s EPYC 7003 series of premium-performance microprocessors modeled after the Zen 3 microarchitecture for single- and dual-socket server platforms, offers exceptional performance, especially on a per-watt basis in data centers. With its increased core counts, AMD Milan offers ultimate density in concert to allow data centers to receive high-performance levels with lower operating costs.
AMD’s changes in pricing come as no surprise with the continuing shortages seen worldwide, primarily when the company depends on lithographic wafers and Outsourced Semiconductor Assembly and Testing (OSAT), a third-party service consisting of semiconductor assembly, packaging, and testing of integrated circuits. OSAT services are possibly the most prominent hit to the industry and the most considerable effect on AMD. Rising costs from manufacturing affect every level of the supply chain, which reflects AMD’s choice to raise prices for its customers and is not indicative of increasing costs for profit only.
The report further reveals that the production of Intel Ice Lake has expanded, showing an estimated 50% supply increase each year starting in 2022. Intel is not increasing pricing on their processors, harming AMD’s future market share. The report includes the delay of the Sapphire Rapids launch, the company’s 7nm technology chipset, which appeared last year during the second quarter. There is no appearance that the Sapphire Rapids processor launch delays will affect Intel due to the company’s bill of material pricing being higher since the materials come at a higher cost to the company.
Team Blue’s Sapphire Rapids processor is the company’s 7nm scalable chipset architecture utilizing Intel’s EMIB. This solution combines both substrate and interposer, bridging the two together. The process uses a small section of silicon. It embeds the area straight into the substrate, offering superior throughput and latency over other OSAT services and increasing the cost of the final result. Even though Intel does their packaging themselves, with the loss of materials available to them, the price has increased overall.
Inspur Systems Dolly Wu contradicts Intel’s CEO Pat Gelsinger’s comments about Sapphire Rapids concerning AMD EPYC. Gelsinger hopes that the company will be in direct competition with AMD EPYC data center processors, but Wu projects that AMD Milan and their Genoa series will continue to keep the advantage over Intel Xeon Scalable processors.
AMD is dependent on silicon supplies, causing the company to be more restrained in increasing market shares faster. However, Intel also sees challenges with the TSMC continually to raise 7nm capacities and AMD 5nm Genoa chipsets to appear further into 2022. Whether the two companies will show added aggression when accessing necessary sockets this year.
Source: Tom’s Hardware