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Late in June, Advanced Micro Devices, Inc. (NASDAQ:AMD) launched its new Epyc CPUs. Based on the company’s latest Zen architecture, Epyc was designed to take on Intel Corporation’s (NASDAQ:INTC) Xeon in the data center and enterprise PC market — a market that’s poised for growth as enterprise customers have been delaying purchases in anticipation of new hardware.

Advanced Micro Devices, Inc.'s (AMD) Epyc CPU Has a New Challenger More

Source: Intel

AMD’s position looked good, but the performance comparisons it published were based on existing Intel Broadwell Xeon chips. Now Intel is fighting back, introducing a new line of Xeon CPUs based on its Skylake architecture.

Have AMD’s data center prospects been dashed by the new Skylake Xeon chips, or is Epyc still on track to steal market share from Intel?

Intel’s Skylake Xeon Announced

When AMD announced its new Epyc processors in June, it offered up some very significant numbers in comparison to Intel’s Xeon. This included claims that Epyc would outperform Xeon by as much as 70% in the $800 price band and by up to 40% compared to top-end, $4,000+ CPUs. In addition, AMD claimed lower total-cost-of-ownership for its chips, and suggested data centers would see a 20% savings in capital costs compared to Xeon.

In response, AMD stock saw a double-digit boost during and after the Epyc announcement, reaching a three-month high.

However, yesterday it was Intel’s turn. The company held an event where it officially took the wraps off new Skylake-based Xeon CPUs.

While modest performance gains had been expected with its new Skylake Xeon chips, Intel is boasting about big numbers. The company is claiming the new CPUs average 1.65 times faster speeds than the previous generation at common tasks that servers typically run. Compared to AMD’s published Epyc specs and benchmarks, Intel claims the Skylake Xeon CPUs matched or beat the results.

Speaking to Fortune about the performance of new CPUs — and the quick release (the previous generation launched in March 2016) — an Intel representative said:

“This represents the best of our 20-year history of data center innovation. That’s huge. That’s a lot to continue to deliver on the performance beat rate to our customers.”

And while Intel formally announced the Skylake Xeon chips on Tuesday, the company actually began selling the new silicon earlier. Intel claims it has already sold around 500,000 Skylake Silicon CPUs to more than 30 enterprise customers, including Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google.

Where Does This Leave AMD’s Epyc?

Intel’s claims about Skylake Xeon performance may not paint a pretty picture for AMD’s Epyc chips, but the situation isn’t quite as clear cut as it may sound.







As Fortune points out, part of Intel’s speed claims includes software optimization. That may not be applicable to all customers and also needs to be verified by someone other than Intel. And while AMD uses standard compilers when running benchmark tests, Intel has been known to use optimized compilers that could skew results.

Perhaps the final word on the situation comes from respected hardware review website AnandTech. It has spent several weeks with both AMD’s Epyc CPUs and the new Intel Skylake Xeon chips, testing the two extensively. The conclusion?

“If performance-per-dollar matters to you, AMD’s EPYC pricing is very competitive for a wide range of software applications.”

AnandTech noted that outside of database software and specialized vectorizable HPC code, the $4,200 AMD Epyc 7601 offers “slightly less or slightly better performance” than the new $8,000+ Intel Xeon 8176. However, the AMD Epyc CPUs required more tuning for optimal performance, a factor that could discourage smaller data centers that lack the IT resources to allocate to the task.

The bottom line is that with its new Skylake Xeon CPUs, Intel is fighting back harder than expected against AMD in the data center market. And the new generation of Xeon processors are tough to beat when it comes to HPC applications. However, AMD’s Epyc CPUs are going to appeal to companies looking to cut costs. The question will be whether AMD can win over long-time Intel customers.