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Intel’s new chip plans could turn rival AMD’s fortunes

THE STAR – Intel Corp’s latest focus on making chips to meet rising demand will give Advanced Micro Devices Inc (AMD), its biggest rival in the server and PC market, a chance to build a greater foothold in the segment, analysts said.

Intel, which plans large investments in chip technologies in the next four years, said on it expects revenue from its segment housing PCs to grow in low to mid single digits, and its datacentre and AI business to grow in high teens from 2023 through 2026.

The company’s shares fell about six per cent, while those of AMD slipped one per cent on Friday.

AMD’s market cap briefly breached Intel’s earlier this week when it closed its USD50 billion Xilinx deal. AMD is now about USD1 billion short of Intel’s roughly USD182 billion market cap, both far from Nvidia’s USD585 billion.

In servers, AMD had less than five per cent market share in 2018, but now holds 15 per cent. This could go as high as 25 per cent, WestPark Capital analyst Ruben Roy said. In PCs, he expects AMD market share to reach high 20s from its current 18 per cent to 20 per cent range.

Intel CEO Pat Gelsinger holds a wafer as he speaks on stage at Intel’s Investor Day in San Francisco, California. PHOTO: THE STAR

“We think share gains will continue as Intel tries to catch up on manufacturing process tech.”

But Wall Street is less enthused with Intel’s latest chip plans, which analysts said lacked “credibility” amid tough competition, and include muted gross margin growth and aggressive spending.

Piper Sandler analyst Harsh Kumar said there was no imminent threat to Nvidia and AMD from Intel’s ambitious roadmap. “Intel only plans to find its normal cadence but is not really expected to take any meaningful share.”

Once a market leader in the semiconductor space, Intel gave up its spot to Samsung Electronics in 2021 for the first time since 2018, Gartner data showed, while AMD jumped to the 10th spot from 14.

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