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Report: Intel Planning For Phased Price Cuts To Take On AMD Challenge

Report: Intel Planning For Phased Price Cuts To Take On AMD Challenge

Intel Corporation (NASDAQ: INTC), which reported strong fourth-quarter results, is feeling the competitive pressure as rival Advanced Micro Devices, Inc. (NASDAQ: AMD) is pushing ahead with its strong product momentum.

Intel is contemplating implementation of price cuts in a phased manner, according to a report earlier this week by Digitimes, citing sources at PC makers.

As an initial step, Intel is reportedly planning to slash prices of chips sold to OEMs some time in the second half of 2020. The benefit of the price cuts is likely to be passed down the value chain to the consumers.

Intel could afford to take a margin hit to preserve its market share, given its abundant cash reserves. The company boasts of $13.12 billion in cash and cash equivalents and investments as of December, according to its latest earnings report.

AMD's resurgence with its Ryzen and Threadripper processors has already forced Intel to price its latest iteration of high-end desktop processors much below the previous generation's prices.

Although Intel still commands a lion share of the desktop and laptop processor market as well as the server processor market, AMD is making strong inroads. AMD reportedly is shooting for 10% market share of the server processor market by the second quarter of 2020.

It was rumored late last year Intel is preparing to offer $3 billion in discounts across its lineup of desktop and notebook processors as well as its Xenon server processors.

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