D3M1G0D:

This shouldn't come as a surprise for anybody. They've had supply issues for a while now and it's known that these issues will continue well into 2019. DIY market is relatively small with relatively low margins so it's a good place to sacrifice while they prioritize their high-margin clients.

These "supply issues" are not low production volume. Its the inability to produce enough to keep up with demand. Don't agree? Then please explain how on earth Intel gained market share in October, particularly at the highest CPU frequencies.

Andrew LB:

These "supply issues" are not low production volume. Its the inability to produce enough to keep up with demand.

That's the same thing. They don't have enough production capability to produce everything in their product portfolio. Someone already explained it in one thread or another, but Intel didn't expect they wouldn't get their 10nm working, and thus they ended up with too much pushed onto the 14nm production line, making it insufficient.

schmidtbag:

I understand that, but my point is they WILL see a greater net profit from the DIY sales. I'm not sure how much more, but considering how much they care about profits in the first place, I would think that this is a no-brainer to them. I guess the real caveat is what their contracts look like with OEMs. If they're expected to provide X amount of CPUs and they can't keep up, it would be a greater financial loss to alter or maybe even cancel the contract than they would earn from the DIYers. EDIT: Think of it like this: You could either sell 100,000 CPUs for $275 a piece, or, you could sell 95,000 CPUs for $275 and 5,000 of the same exact model for $350. In both situations, Intel sells every single model they make, but in the latter they make a lot more money.

I understand what you´re thinking but things are not that simple. For Example, how do you think a company like Intel decides how much to produce? They ask their major clients how many units they need and then they start from there, meaning that most of their production is already allocated/sold to their biggest clients months in advance. Of course OEMs pay part of the value upfront... So Intel can´t simply decide to change customers on a whim. But even more important, how do you think stores get their hands on Intel´s parts in order to sell them individually to customers like us? They don´t buy them directly to Intel so Intel can sell them at a bigger price. What happens is that Intel sells an huge amount of Individual parts to a company or a subsidiary of them responsible for selling those parts again until they reaches our hands. For example, for me to buy an Intel part here in Portugal what happens is that Intel first sells those parts in bulk for a company responsible for selling Intel products in Europe. Then that company sells those parts to smaller companies responsible for a designated area, normally a country or a small group of countries, normally they don´t sell them just for Portugal but for a company that handles the iberian zone. Later that company sells the parts to stores and finally the parts reach their final clients, like me. All this to say that the margins from DIY are not that big because Intel doesn´t sell directly to them but intermediaries who sell to DIY channels. Also the companies that buy in bulk from Intel are almost like OEMs, the key difference is that buy parts to sell them to others instead of using the parts to assemble systems to sell. I hope i explained this well.

Actually, if they sold nothing to OEMs at volume discounts, people would either learn to build their own systems or asked someone who already does that. No reason to think such apocalyptic scenarios based on people's inability to learn or contract someone who can learn.

You´re right in a certain way but i think most people just want their systems ready to go instead of having to build them at their own. I know i wouldn´t like to assemble my phone from indivudual parts...

H83:

But even more important, how do you think stores get their hands on Intel´s parts in order to sell them individually to customers like us? They don´t buy them directly to Intel so Intel can sell them at a bigger price. What happens is that Intel sells an huge amount of Individual parts to a company or a subsidiary of them responsible for selling those parts again until they reaches our hands. For example, for me to buy an Intel part here in Portugal what happens is that Intel first sells those parts in bulk for a company responsible for selling Intel products in Europe. Then that company sells those parts to smaller companies responsible for a designated area, normally a country or a small group of countries, normally they don´t sell them just for Portugal but for a company that handles the iberian zone. Later that company sells the parts to stores and finally the parts reach their final clients, like me. All this to say that the margins from DIY are not that big because Intel doesn´t sell directly to them but intermediaries who sell to DIY channels. Also the companies that buy in bulk from Intel are almost like OEMs, the key difference is that buy parts to sell them to others instead of using the parts to assemble systems to sell.

I kind of doubt there's a company whose job is to sell Intel products in Europe. More likely importers/wholesalers of certain countries/markets get their stuff directly from Intel or they cooperate with each other to buy more. Some giant chains probably are their own importers (like Amazon). I don't see why they would lessen their own profit by having a middleman there. I imagine Intel has regional sales chiefs/personnel, one of them for Europe. Anyway, I'm also not sure the importers/wholesalers can be as self-confident as you suggested. Their greatest fear is to end up with unsold, aging hardware in their hands. The big OEM manufacturers can probably predict with far more accuracy what they need. But a wholesaler has far harder time predicting how many CPUs myriad little retailers end up buying, or small local PC makers. Thus they might end up ordering smaller batches from Intel. If Intel slashed prices, a wholesaler with old inventory would need to swallow the reduction in price.

H83:

I understand what you´re thinking but things are not that simple. For Example, how do you think a company like Intel decides how much to produce? They ask their major clients how many units they need and then they start from there, meaning that most of their production is already allocated/sold to their biggest clients months in advance. Of course OEMs pay part of the value upfront... So Intel can´t simply decide to change customers on a whim.

But Intel doesn't get to decide how much they want to produce in this context - they can't keep up with the demand. So like I said before, unless they are contracted with the OEMs to supply X amount of CPUs and they're struggling to keep up with the contract, what you describe there doesn't apply here. Don't get me wrong - I understand what you're saying here and for the most part I would agree, but that's only true when a company is capable of producing more than the demand.

But even more important, how do you think stores get their hands on Intel´s parts in order to sell them individually to customers like us? They don´t buy them directly to Intel so Intel can sell them at a bigger price. What happens is that Intel sells an huge amount of Individual parts to a company or a subsidiary of them responsible for selling those parts again until they reaches our hands. For example, for me to buy an Intel part here in Portugal what happens is that Intel first sells those parts in bulk for a company responsible for selling Intel products in Europe. Then that company sells those parts to smaller companies responsible for a designated area, normally a country or a small group of countries, normally they don´t sell them just for Portugal but for a company that handles the iberian zone. Later that company sells the parts to stores and finally the parts reach their final clients, like me.

You definitely have a valid point there - Intel doesn't earn the MSRP. That being said, I'm not really sure what the profit margin is of selling CPUs to individuals vs bulk. I'm sure it is more profitable, but if it's only like a 5% increase in profits, I could see Intel being "that's not enough to be worth the hassle".

Just bought a laptop/tablet with a ryzen 2700u in it for my wife. Just got it set up. It's way more than what she needed/wanted. She refuses to let me benchmark it hehe. She wanted one for web surfing/youtube/netflex/excel ect. No gaming. It does all of that at one time. Looks nice too! I'm an intel fan but I'm glad I have another choice now. No plans when it comes to buying another intel system. If AMD keeps this up I'll stay with em. I want to say I think this is just a ploy by Intel. If they stop selling CPUs to DIY builders you can't say they lost market share to AMD. OR any shortage for that. All Intel has to say is "AMD didn't beat us! We have a shortage!" ehe

not that mater but next pc I making ( not mine cause I not redoing mine anytime soon) is gona be ryzen 7 2700 build next few months ( for my uncle), and when I get around to mine in another 3 or so years it will be amd too unless intel pull there collective heads out other delusion butt holes There MSRP for there CPU are ridiculous consider there performance difference from amd and intel atm is is not worth the double price Intel is charging if there cpu where double the performance of amd then sure, that isnt even remotely true atm

schmidtbag:

I'm confused... doesn't Intel get a lot more money per processor when they sell to DIY'ers? I thought companies such as Dell and HP get a deal where they can get the CPUs for cheaper since they buy in bulk. I'd say this is overall good news for AMD - I wouldn't be surprised if most of AMD's sales (for desktop CPUs; not mobile or servers) are done by people building their own PCs.

I'm guessing they have contract obligations to uphold.

Aekold:

As others have mentioned, it's likely that Intel makes more money per-CPU on DIY sales, but the volume is just not there. Maintaining a good relationship with their major partners is also key right now, as AMD ramps up the competition. It was probably the better business move to do it this way.

I work in the industry and keeping large volumes customers is a priority, foundries are not a small thing (pretty much the most complex industry in the world only equalled by some pharma companies) and the processes are very slow, your goal as a semi-conductor company is to have a constant and steady flow to make the most out of your processes, this means having large volume orders from stable and reliable companies that will ensure months of work, we're talking millions of chips or even billions/year depending on die size/complexity, not a few hundreds or thousands. And like Aekold mentioned above if AMD is making moves to acquire more customers, you'd want to satisfy large volumes companies 1st because 1000 diyers not having a cpu won't change your business but losing millions of chips can destroy your company. For those who don't want to read my wall of text I'll make it simpler 😉 complex expensive machinery = they must never stop working big companies = machines working 7/7 24/24 365/365 diy parts retailers = whenever you have time to spare

I'm guessing there's also a big fine or something like that if they don't deliver all the CPU's ordered by say, HP, Dell, Lenovo and such. Also, you don't want to leave your big partners empty handed, they might jump board and join AMD. That would be horrible for their business. Not only it means you're not getting all the money you could, your opponent is getting that money.

RealNC:

Frankly, why on earth would anyone choose Intel over AMD right now? And mind you that I'm saying this as someone who has had a PC since 1993 and only use Intel CPUs.

Because they're still faster for gaming and when I built my 8600k rig, AMD was not a good choice due to so many issues with memory. I knew if I bought AMD I'd be having multiple issues, whereas with Intel everything worked straight out the box and the OC potential of my 8600k makes it well worth it over AMD> Simple choice really.

Eh, who cares. As long as that 2019 ryzen proves to be as good I.. susp..-expect it to be it's all good. And Intel can keep working on their 10nm fab, it might be done before 2021 even at this rate while they keep asking triple the money for subpar 14nm products.

RealNC:

Frankly, why on earth would anyone choose Intel over AMD right now? And mind you that I'm saying this as someone who has had a PC since 1993 and only use Intel CPUs.

I have to agree with this. I like Intel CPUs but it´s hard to justify buying them at current prices because 450€ for a 9700K or 600€ for a 9900K is simply too much!

No worries.. next!

I am really eager to switch platforms, AMD makes more sense than ever. They delivered now and looks like they will deliver what's been promised. Yes, of course, they have their faults, but lately, they redeemed themselves big time. Intel product line is a fine choice now, aren't they? Cheap crappy thermal paste, huge price, more vulnerabilities, rigged benchmarks, their marketing team screw consumers, glued CPUs requiring a full refrigerator to cool down and many, many more. IF only, and it is a BIG IF AMD will somehow listen and deliver a switch for opting out PSP integrated ARM " management" will make soo many soo happy. A man can dream, and a man needs an option.

ruthan:

They are still better for multiboot retro / modern and compatibility stuff.. and for top notch framerate rates in games, if you need anything else AMD is better choice for money, unless you dont have to care about money.. pleas i dont want to read responses that AMD is best for everything or that there is virtualization, both are wrong.

Please, guy... I walked from Intel in 1999 and have yet to have the first compatibility issue with the many AMD cpus/core-logic chipsets I have bought since. Had that not been the case I would have returned to Intel, no question about it. Along the way I have read many posts by Intel adherents who claim vague/fuzzy "compatibility" problems with AMD cpus--but alas, I have not seen such things in all of those years, through many hundreds of games and applications, including maybe a dozen OSes, too. So I am skeptical as to the claim, of course. As far as existing games are concerned, Intel's scant frame-rate advantage in some of them has much more to do with game-engine Intel-specific code optimizations than it does with hardware. That will change, too, with time, as game-engine compilers become more Ryzen optimized. Unquestionably, imo, AMD offers the best cpu bang for the buck at the moment. Neither Intel nor AMD cpus are "best for everything"--so not sure what you mean, here. Intel has quite a distance to cover in the multi-core cpu markets, seems to me--and tooling up for 10nm has been causing them to pull out their hair...well--that's how I imagine it anyway...! I guess the point is simply to point out that the inviolability of Intel's "superiority" technically has, once again, been proven a myth by the only company in existence to have demonstrated such more than once--AMD. I don't mean to sound abrasive, if I do, but I think AMD deserves massive kudos for once again proving that it is possible to leapfrog Intel technically. Nothing could be better for consumers of these products than the degree of competition that exists again because of AMD. Intel's many missteps of the last couple of years prove how harmful it can be for a company to languish away in a monopoly market position. Just as licensing x86-64 from AMD for Core 2 made Intel a much better cpu company during the A64 years, and just as AMD saved Intel's bacon from the horrors of RDRAM at the same time, so will AMD's technical resurgence force them along more R&D, innovative paths, once again--or, well, they'll just keep on cross-licensing the good stuff from AMD, I guess...;)

@Waltc 3 : very well said 😎

RealNC:

Frankly, why on earth would anyone choose Intel over AMD right now?

Maybe because AMD focus on some country and spit on the demand from other... A friend even sell his new motherboard after 6 month waiting his Ryzen... And for myself i try to get a Athlon 200GE for replacing my HTPC since month. It has always been the problem with AMD since more than 20 year.

schmidtbag:

I understand that, but my point is they WILL see a greater net profit from the DIY sales. I'm not sure how much more, but considering how much they care about profits in the first place, I would think that this is a no-brainer to them. I guess the real caveat is what their contracts look like with OEMs. If they're expected to provide X amount of CPUs and they can't keep up, it would be a greater financial loss to alter or maybe even cancel the contract than they would earn from the DIYers. EDIT: Think of it like this: You could either sell 100,000 CPUs for $275 a piece, or, you could sell 95,000 CPUs for $275 and 5,000 of the same exact model for $350. In both situations, Intel sells every single model they make, but in the latter they make a lot more money.

There is 3 points that you are missing: -Consumer want intel CPU despite whatever we can read about AMD and Ryzen ( wich is a good CPU BTW ) and for 90% of them they want it in an already build laptop. -Company put heavy penality on intel if they don't have the good quantity of CPU ( it's for that it is more easy for them to be the 1st serve ). -The price beween Boxed CPU and Bulk OEM CPU is more or less the same as packaging and cooler have a cost, so at the end it is more simple to sell to OEM for benefit.

asturur:

asus, gigabyte and company must not be happy. In my opinion the first athlon on socket-A and the palomino xp2000+ were still better than comparable intel first gen P3/P4

Not everyone, the XP+ were inequal depending on model and with the same name some are better and some don't, the barton were good with big cache and faster link. But the real good one were X64 on socket 939...