On May 30, chip giant Intel (NASDAQ:INTC) announced its new Skylake-X family of processors aimed at the high-end desktop market. Intel is pitching this family of processors (as well as the accompanying X299 platform) at gamers, content creators, and overclocking enthusiasts.
The high-end desktop market is a relatively small one, but it's a market that's growing and a market in which customers are generally willing to pay premiums in exchange for higher performance (something that translates into relatively rich average selling prices).
Let's go over the key announcements vis-a-vis the Skylake-X processors and what it all could ultimately mean for Intel's business.
More cores, much better value
Intel's previous high-end desktop processors, known as Broadwell-E, came in six, eight, and 10 core options. The 10-core part ran at modest speeds out of the box (3GHz base frequency/3.5GHz maximum turbo frequency) and cost customers about $1,700. The eight-core part below it sold for about $1,100, with the two six core parts (differentiated by PCI Express lanes and frequency) listed for about $617 and $441, respectively.
With Skylake-X, Intel has built much higher-performance and much better value parts across the board.
The very top model -- the Core i9-7980XE -- packs 18 cores and carries a $1,999 price tag. Below that is the 16-core Core i9-7960X for $1,699, the 14-core Core i9-7940X for $1,399, the 12-core Core i9-7920X for $1,199, the 10-core Core i9-7900X for $999, the eight-core Core i7-7820X for $599, and the six-core Core i7-7800X for $389.
Although Intel has yet to disclose the frequencies of the Core i9-7920X and up (Intel is likely still in the process of finalizing these SKUs), the frequencies of the Core i9-7900X and below have been disclosed and are up nicely from their Broadwell-E counterparts.
For example, the 10-core Core i9-7900X runs at a base frequency of 3.3GHz and a maximum Turbo Boost 2.0 frequency of 4.3GHz. The 10-core Core i7-6950X runs at a base frequency of just 3GHz and only offers a maximum Turbo Boost 2.0 speed of 3.5GHz.
To top it all off, the Skylake-X parts use an updated processor architecture that should yield performance improvements relative to the Broadwell-E parts at identical core counts and frequencies.
The 7900X is also much cheaper than the 6950X, making the former a substantially better value than the latter was.
Intel finally takes high-end desktop seriously
With the Skylake-X family of processors, Intel has seemingly built "no-compromise" parts. These parts scale to ridiculously high core counts, pricing is far more rational (there are no irrational jumps in pricing between different models in the lineup, either), and the chips also run at very high frequencies when fewer cores are loaded up (this is important for gaming).
In other words, these chips should do very well at content creation (and other tasks that can take advantage of multiple cores) while at the same time delivering strong out-of-the-box performance for gaming applications, which generally can't make good use of many processor cores today.
I expect that the new Skylake-X lineup will reinvigorate enthusiasm in the gaming/PC enthusiast community for Intel's high-end desktop processors and platform after the company had seemingly neglected it for years in favor of its cheaper mainstream desktop platform.
If I'm right, this should translate into both an acceleration in unit shipment growth and a richer product mix within the company's desktop processor shipments. Now, enthusiast/gaming-related chips make up a relatively small portion of overall desktop computer market, but these chips are high value and shipments of them seem to be growing as the overall desktop personal computer market declines.
This suggests that, over time, enthusiast/gaming-related chips will become increasingly important revenue and profit drivers for Intel's Client Computing Group, its largest business unit.