Intel investing $1B to meet 14nm demand

[Dayman1225]

Their margins are still far higher than AMD, and nobody seems to be calling for the resignation of their top management.

Well I mean... they currently don't have a permanent CEO in place. BoD should certainly be shaken up too but that isn't really relevant to this thread.

 

[Spartak]

Since the start of september prices of intel CPU's have skyrocketed accross the board in the Netherlands. i7-8600k from e250 to e325. i7-8700 from e300 to e450 (!!).
Are you guys in the states seeing the same increases? NB currency exchange rate between euro and dollar has remained stable.

It seems too much of a coincidence this price climb happens alongside the news of 14nm production shortages, right when the new iphone XS/XR are launched with 14nm intel modems inside.

It baffles the mind they only decided to act on the production shortage now when the 10nm issues are longstanding and it was clear for months they couldnt possibly meet demand for their own chips AND the massive quantities of iphone modems on the same node.

I was planning on getting a 8086k on the 'cheap' with the new 9series set to launch. But I guess I'll need to wait until at least the new year or even Zen3 launch for pricing to become sane or even -dare I say- competitive.

 

[scannall]

On the one hand, I see this as a positive for Intel, since they are still able to push product despite Spectre/Meltdown, the 10nm fiasco, and pressure from multiple angles.

On the other, I see it as a negative since they are sinking a lot of money into expanding production on a fully-matured node. We are going to see 14nm from them for awhile.

They made a lot of 14nm commitments, asuming 10nm would be on-line and they'd have the capacity. Like a bazillion phone radios for Apple for instance. And moving their chipsets to 14nm. But, since 10nm is 18 to 24 months away still.... Gotta do something to keep your contracts, and keep your own parts going out the door.

 

[jpiniero]

All this really says is that 10nm is still stuck in the mud, and will likely get pushed back again.

I still think it's because of Cooper, but I don't think anyone should be expecting much 10 nm other than some percentage of mobile parts in 2019 though most of 2020.

Edit: And the FPGAs. Can't forget about them.

 

[LTC8K6]

Since the start of september prices of intel CPU's have skyrocketed accross the board in the Netherlands. i7-8600k from e250 to e325. i7-8700 from e300 to e450 (!!).
Are you guys in the states seeing the same increases? NB currency exchange rate between euro and dollar has remained stable.

It seems too much of a coincidence this price climb happens alongside the news of 14nm production shortages, right when the new iphone XS/XR are launched with 14nm intel modems inside.

It baffles the mind they only decided to act on the production shortage now when the 10nm issues are longstanding and it was clear for months they couldnt possibly meet demand for their own chips AND the massive quantities of iphone modems on the same node.

I was planning on getting a 8086k on the 'cheap' with the new 9series set to launch. But I guess I'll need to wait until at least the new year or even Zen3 launch for pricing to become sane or even -dare I say- competitive.

8700K is $369 at Amazon.
$309 for the 8700
~$400-$440 for the 8086K depending

I can't imagine the 8086K ever being "cheap"

 

[LTC8K6]

Superbiiz is at $415 and $475 for some reason on the 8700 and K.

 

[maddie]

Their margins are still far higher than AMD, and nobody seems to be calling for the resignation of their top management.

I know you understand, so why this?

Put very simply, Intel's share price is based on their profits which for a given sales number is based on margins. Also put simply, if this falls the share price falls unless there are fantastic short term future events expected. With the 10nm fiasco by itself we might not see a major move, if Intel was still dominant, but with the very competitive position of AMD and the expected even more competitive products imminent, the situation changes completely. Any neutral thinking person would realize this, and any realistic partisan one would also.

The relative margin argument is very weak for this topic.

 

[Spartak]

8700K is $369 at Amazon.
$309 for the 8700
~$400-$440 for the 8086K depending

I can't imagine the 8086K ever being "cheap"

I know they aren't cheap. I'm talking about the massive and sudden price increase. It was kinda hard to miss with even a graph included but apparently you somehow succeeded. On average about 30% but the 8700 had almost a 50% price increase over the last three weeks.

The question was if the US is also seeing a price increase.

 

[jpiniero]

The question was if the US is also seeing a price increase.

It's starting to go up now... sort of. It's currently $399 at Amazon and Newegg right now, but Amazon seems to be toying with the price and Newegg has a pretty itchy auto-gouger. The issue with Europe is probably more shady distributors.

 

[Spartak]

I find it hard to believe its due to shady distributors. Those price figures (and graph) is sales aggregates of all dutch retail prices for a particular product. Bottom and average prices both increased with roughly the same amount, across all retail.

 

[Campy]

The biggest and most reputable scandinavian online retailer is one of the first to increase prices, I don't think this is "shady" I think they have very good contact with Intel and that this is probably a sign of things to come.

 

[jpiniero]

The biggest and most reputable scandinavian online retailer is one of the first to increase prices, I don't think this is "shady" I think they have very good contact with Intel and that this is probably a sign of things to come.

Retailers don't buy from Intel directly; they go through the distributors. Amazon might be the one exception.

 

[ehume]

Retailers don't buy from Intel directly; they go through the distributors. Amazon might be the one exception.

MicroCenter?

 

[DrMrLordX]

Most 14nm equipment is usable for 10nm.

I guess that's a plus, for when 10nm is ready. There's still retooling to do, though.

Their margins are still far higher than AMD, and nobody seems to be calling for the resignation of their top management.

There will be calls for the heads of top AMD management if they can't supply product in the face of increasing demand. It was a critical error on AMD's part years ago (and probably one of the reasons why they eventually went fabless, not that it helped much back then).

They made a lot of 14nm commitments, asuming 10nm would be on-line and they'd have the capacity. Like a bazillion phone radios for Apple for instance. And moving their chipsets to 14nm. But, since 10nm is 18 to 24 months away still.... Gotta do something to keep your contracts, and keep your own parts going out the door.

Right. And the modems presumably do not command the same margins as, say, Skylake-SP or Cascade Lake. Or so I would think? So when you use wafers on iPhone modems, you are doing this to expand market share, not reap big profits. Profit per wafer goes down, but at least you stay in the good graces of Apple. The downside is, you expose your critical markets to product shortages. You lose sales. Intel was already in a position where there was the risk that other companies might peel away market share thanks to Intel recycling the same core design on the same process over and over again. Not the guarantee mind you, just the risk. Intel has their usual marketing bag of tricks to fight the competition. But those tricks do not work if there is also a supply interruption.

 

[Kaloi48]

I still think it's because of Cooper, but I don't think anyone should be expecting much 10 nm other than some percentage of mobile parts in 2019 though most of 2020.

Yeah, the upcoming Comet Lake-U CPUs are expected to be based on 14 nm process. There is another variant of Comet Lake-U that supports LPDDR4X is planned to launch in 2020, so 14 nm isn't going away any time soon.

 

[Spartak]

Looks like the price hike is hitting all of Europe.

Mindfactory is seeing even worse price increases of Intel chips at 50% average. And consumer sales are moving over to AMD. Intel is probably trying to keep their larger OEMs satisfied, mainly at the high end, but even my new HP Zbook ordered by my company is being pushed back further and further as well due to supply constraints of the Intel chip.

 

[Spartak]

It's not as if the PC market is suddenly booming. On top of that AMD has taken back some market share over the past year. The guy responsible for supply and demand should probably be looking out for another job. Since I don't think this hangs on the COO its probably even a greater mess at Intel than we already thought.

 

[jpiniero]

It's not as if the PC market is suddenly booming.

Yeah, that's what I was kind of getting at. There is some amount of a shortage, but nothing to the extent that would normally cause large price increases... if not for the gouging. I imagine it's also being exacerbated by Intel clearing out for the Coffee Lake Refresh launch.

 

[Kenmitch]

The biggest and most reputable scandinavian online retailer is one of the first to increase prices, I don't think this is "shady" I think they have very good contact with Intel and that this is probably a sign of things to come.

What's the trend on the AMD offerings pricing? I'd think that if it was leaning towards shady they'd also bump the AMD price points up somewhat to maximize their profits.

 

[arandomguy]

Right now there is unbalance between supply and demand for Intel CPUs. There is going to be a lag time until it effects AMD as people who were going to go with Intel start shifting towards them. Unless of course AMD predicted Intel's shortage and contracted orders to fill it well in advance which seems unlikely.

PC market last few have gone through the NAND shortage, Memory shortage, GPU shortage, and now the CPU shortage. People who staggered upgrades on components might have even come out ahead (eg. memory is expected to fall due to lack of demand on CPUs). People who have been trying to do full system builds, what a time!

 

[LTC8K6]

I know they aren't cheap. I'm talking about the massive and sudden price increase. It was kinda hard to miss with even a graph included but apparently you somehow succeeded. On average about 30% but the 8700 had almost a 50% price increase over the last three weeks.

The question was if the US is also seeing a price increase.

We were fine here on prices until you mentioned it.

They literally shot up the day after.

 

[Spartak]

You're welcome!

 

[Topweasel]

It’s probably better than that. A lot of times companies intentionally bin dies below their full capabilities because they can only sell a set number of dies.

It used to be quite popular to buy phenom chips and unlock them. AMD had chips that weren’t defective, but they artificially locked them down because they had too many full chips and there wasn’t enough demand. I wouldn’t be surprised if Intel were hobbling the bottom part of their bin either under normal circumstances.

If you have 90% of chips yield good you don’t keep them that way. You raise the bar on what those chips need to hit in terms of performance until you reach a point where enough fall out of that bin based on what sales are projected to be. Even if Intel could get 100% yield on their top chip, they can’t sell them all at the price they want to charge. The same goes for AMD.

They do this because of production requirements. The Demand for cheaper chips always outweighs the demand for higher end chips. So you bin down meet that demand. Script flips on these 28c dies as on the Server market that needs these types of CPU's the upper end has higher demand. I think Intel will be making these wafers just for the handful of 28c dies they can get just to meet demand. But for a 1600x and 2600x yeah 80% of them are probably working 8 core dies.

 

[Campy]

What's the trend on the AMD offerings pricing? I'd think that if it was leaning towards shady they'd also bump the AMD price points up somewhat to maximize their profits.

No noticable change in AMD pricing that I've seen.

 

[maddie]

Right now there is unbalance between supply and demand for Intel CPUs. There is going to be a lag time until it effects AMD as people who were going to go with Intel start shifting towards them. Unless of course AMD predicted Intel's shortage and contracted orders to fill it well in advance which seems unlikely.

PC market last few have gone through the NAND shortage, Memory shortage, GPU shortage, and now the CPU shortage. People who staggered upgrades on components might have even come out ahead (eg. memory is expected to fall due to lack of demand on CPUs). People who have been trying to do full system builds, what a time!

Outside of APUs, AMD only has to fab one (1) die. Their ability to adjust to varying demand is much quicker than Intel. Just fab the die and adjust the packaging step to the product you want.