AMD needs to keep taking market share, while Intel can’t afford to lose it
Investors are mostly focused on the two companies’ rivalry in the rapidly growing market for data center chips. However, PC still accounts for most of the revenue for both. And that could be a problem this year as the maturing industry heaves a sigh of relief after a strong, pandemic-fueled downturn. IDC estimates PC shipments jumped about 12% in 2021 to 337.6 million units, after a 13% increase from the previous year. But the market research firm estimates that sales will remain flat this year and only increase by 1% in 2023. It even considers the collision of the pandemic; The industry averaged 265 million units annually for the five-year period prior to 2020.
Intel and AMD touted their upcoming PC chips at the very short CES trade show last week. The latest offering is mostly geared towards laptops, which account for nearly three-quarters of the PC market. Intel will be the first laptop processor to roll out its new production process called “Intel 7”, while AMD’s new Ryzen chips will be built on TSMC’s 6-nanometer process. Analysts are mixed, with better prospects. Jefferies’ Mark Lipasis expects AMD to continue taking market share from Intel, while New Street Research’s Pierre Ferragu expects Intel’s new offerings to help chipmakers “restore competition.”
Nor can they tolerate shortfalls in those cases. Investors have raised AMD’s share price by 39% over the past 12 months — outperforming many other chip peers — and analysts expect the much smaller chip maker to deliver double-digit revenue growth over the next two years. Intel, on the other hand, will continue to do so after projected 65% growth in 2021, given its need to maintain business and cash flow during a multi-year and costly turnaround plan to bridge the gap with TSMC on manufacturing. Desperate to prevent the loss of its share.
Another potential wrinkle is ARM-based processors likely to gain more traction following Apple’s success‘s
The new Macs using the company’s in-house designed chips. Qualcomm used its CES presentation to announce that more than 200 enterprise customers are testing or deploying Microsoft Windows-based devices using the company’s ARM-based Snapdragon chips. Chris Casso of Raymond James wrote that “PC makers need a competitive response to M1-powered Macs,” but the greater share for ARM processors like Snapdragon would come at the expense of x86 chips made by both Intel and AMD.
One thing is certain: Despite growth being flat, the PC market will provide plenty of excitement this year.
Write Dan Gallagher [email protected] Feather