Though relatively small alongside rival chipmakers Intel and Nvidia, AMD is looming larger in the global semiconductor industry of late.
AMD (Advanced Micro Devices) has been gaining ground, offering an increasingly viable option to customers, and posing stiffer competition to Intel and Nvidia in the global semiconductor industry. In the third quarter AMD’s revenue reached $1.8 billion, its highest since 2005. The company expects next quarter to be just as buoyant, up 48% from the previous year to $2.1 billion. In the past four years, its share price has risen 15-fold. AMD has always competed on price. Now it competes on quality as well, pushing its rivals to lower prices.
AMD is most competitive in two major categories: CPUs and GPUs. In CPUs, used in laptop and desktop computers as well as servers, AMD competes mainly with Intel. The world’s second-biggest chipmaker with $71 billion in revenue in 2018, Intel has long dominated this segment of the semiconductor industry. In 2015 its chips accounted for over 92% of desktop and laptop computers, and over 99% of servers, according to Mercury Research.
AMD is now taking a bigger slice of the pie, lessening Intel’s near-monopoly. More recently Mercury estimated AMD’s share at 14.7% for desktops and laptops, and just a hair over 3% for servers – marginal, but notable, since this is five times what it was only two years ago. AMD’s GPUs, used for 3D graphics in gaming and in machine learning, compete with those of Nvidia, another giant which reported 2018 revenues of more than $11 billion.
AMD is gaining on the competition because it has greatly improved its products, partly through a key hire. Renowned chip designer Jim Keller, who had previously worked for AMD and later for Apple, was rehired in 2012. He left again in 2015, but not before designing a new microarchitecture which formed the basis of AMD’s “Zen” chip, released in 2017. These equal (or even surpass) Intel’s chips in terms of power, and beat them handily on price. Zen chips fast-tracked AMD in the CPU market, winning the firm contracts with Microsoft and Sony (for games consoles), Google (data centres) and Cray (supercomputers), among others, The Economist reports.
Also helping AMD are the difficulties that Intel, which manufactures its own chips, has had rolling out its next-generation 10-nanometre manufacturing process. Its years-long delays have given Taiwan Semiconductor Manufacturing Company (TSMC), which makes most of AMD’s chips, a chance to catch up. AMD should not rest on its laurels where Intel is concerned, however. The goliath hired the talented Mr. Keller from Tesla in 2018. This year it announced plans to launch an advanced manufacturing process in 2021, and release its own gaming GPU.