What helps AMD surpass Intel?
AMD and Intel are two direct competitors in the microprocessor market, but the short-term outlook for each is mixed. While Intel is forecasting an all-out decline, AMD’s data center business sees growth with new processors, as well as the pandemic-era acquisition of chipmaker Xilinx that has begun for “sweet fruit”.
On January 31, AMD said it expects sales by the end of March to reach 5.3 billion USD. Compared to the same period last year, this is down 10%, but the drop is still nothing compared to Intel, which forecast last week that its sales for the same period could fall by as much as 40%.
Neither of the top two chipmakers provided forecasts for the full year, citing uncertain economic conditions. “Obviously we want to be cautious when entering the new year with the current macro situation.”AMD CEO Lisa Su said.
However, the stock market is reflecting the difference between the two companies. Following Intel’s report last week, the giant’s stock fell more than 7%, while AMD’s capitalization rose nearly 2% after making its forecast on Jan. 31.
The personal computer (PC) market fell after two years of hot growth during the pandemic, both affecting both companies.
AMD’s PC chip group revenue in the fourth quarter of last year, fell 51% year-on-year, while Intel’s decline was 36% but on a larger basis. CEO Lisa Su said the company expected the total PC market to fall by 10% in 2023, but AMD gained market share in the most recent quarter.
Data center processors are one of the main differences between the two competitors in the same industry.
Intel’s data center group revenue fell 33% year over year to $4.3 billion. That’s partly due to their latest line of server chips, Sapphire Rapids, released later.
Meanwhile, this area of AMD showed a stronger growth of 42%. AMD released its latest server chip, the 4th generation Epyc processor, last November. The company also expects its data center business to grow this year as PC chips and graphics processors decline.
In addition, the acquisition of Xilinx in 2020 worth $ 35 billion, is considered a success with AMD. Xilinx, which makes microprocessors for special tasks like encoding or compressing video, contributed $1.4 billion to overall sales.
The Vinh (According to CNBC)