AMD is raising the price of its EPYC server processors by a significant margin due to supply uncertainties caused by the global chip shortage, a new report suggests.
Authored by Jordan Klein, MD at Mizuho Securities, the report claims AMD is raising the price of its EPYC CPUs by between 10-30%, although certain major cloud customers have been given a reprieve.
“Given very tight wafer supply, AMD is not giving customers any real forward visibility into expected CPU/GPU shipments,” the report asserts. “So when they ship product each month, they raise the price and make it a ‘take it or leave it’ offer.”
Rise of AMD EPYC
Although Intel is still the most dominant player in the server CPU market, AMD has made significant gains over the last few years, courtesy of a newly established performance advantage. The report estimates the company ended last year with a 20-25% market share.
The current generation of EPYC chips, codenamed Milan, boast chart-topping performance when it comes to raw power, energy efficiency and performance density. This combination of qualities means EPYC is fast becoming the go-to option across enterprise, cloud and HPC.
In November, meanwhile, AMD offered a glimpse at next-generation EPYC chips (called Genoa), which will be the first to utilize TSMC’s 5nm process technology. AMD says Geneo chips will offer twice the density, twice the power efficiency and 1.25x the performance of its Milan series.
According to Dolly Wu, VP at server vendor Inspur Systems, the performance advantage over Intel Xeon and strong product roadmap means AMD customers have little choice but to bite the bullet when price hikes are introduced.
However, while strength of market position may well have something to do with the price rises, this is not a simple case of gouging. AMD is subject to a range of external pressures brought about by the chip shortage, from higher manufacturing costs to supply constraints and other bottlenecks, all of which affect profitability.
When asked for confirmation of the price hikes by our sister site Tom’s Hardware, AMD said its policy is never to comment on customer pricing. TechRadar Pro followed up with questions about the factors that may influence prices this year, but the company again declined to comment.
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