U.S.-based semiconductor giant Intel is seeking to raise its profile in the rapidly-growing mobile processor chip market by supplying its Atom-branded processors to clients with heavily-discounted price.

The move was mainly aimed at narrowing the market gap with Qualcomm, MediaTek and Samsung Electronics in the heated race for processors and diversifying its business portfolio, said officials at Samsung Electronics and industry sources.

“As far as I know, Intel has been supplying its Atom processors to major clients including Samsung Electronics with offering a maximum of 30 percent cut than the chips supplied by other suppliers. This is very rare for Intel, which has so far been consistent in maintaining its stiffer pricing strategy in chips for conventional PC-related solutions,” said an industry source.

In May, Intel agreed with Samsung Electronics to supply its 1.6 GHz dual-core Atom Z2560 processors to be used in Samsung’s Galaxy Tab 3 10.1 16GB WiFi-support models. The Samsung tablet has been selling about $300 per unit.

Although Intel is the world’s biggest semiconductor company, it’s been very slow to provide mobile solutions to table and smartphone manufacturers. In return for selling its processors with discounted prices, Intel is now near to achieve this year’s internal sales target, said another official who is familiar with the issue.

Intel is an underdog in processors. Data from Strategy Analytics(SA), a leading market research firm, showed the average selling price(ASP) for Intel Atom processors was $11.56 as of the end of the second quarter of this year.

The ASP for Qualcomm processors and Samsung Electronics’ processors was estimated at $18.86 and $19.80 per unit, respectively, according to the SA.

“Intel is asking its clients to pay higher premium in buying its x86 CPUs for PCs; however, the U.S. chip manufacturer has been approaching existing and potential clients with applying such aggressive pricing strategy,” said one industry executive.

Amid a decline in demand for conventional PCs hit by the huge demand for connected portable devices such as smartphones and tablets, Intel is increasingly being pressurized to find its next cash-generators.

SA said Intel’s share in the global mobile application processor market by the end of last year was negligible 0.2 percent in terms of annual revenue. Intel is seen to raise its share in the segment to 1 percent as it’s been busy to add up new clients other than Samsung Electronics, the research firm said.

Intel will hold its developers’ forum from Sept. 10 to Sept. 13 in San Francisco, the United States. New Intel CEO is expected to spend more of his speech time to deliver its strategies fitted with the mobile processor market.


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