AMD gains chip market share at Intel’s expense; shares surge

After decades of lagging behind Intel, AMD has been catching up in recent years, helped by advances at contract manufacturing partner TSMC

Wall Street expects AMD’s sales to climb 25 per cent this year to US$8.4 billion, which is still about half what Intel books in one quarter

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Advanced Micro Devices chief executive Lisa Su expects demand for the company’s chips used in notebook computers and servers will increase in the second half of 2020. Photo: Handout

Published: 5:29pm, 29 Jul 2020Updated: 5:29pm, 29 Jul 2020

Advanced Micro Devices (AMD) is gaining share in the lucrative market for server chips, the latest sign it is benefiting from close ties to a major Taiwanese contract manufacturing partner to win orders from larger rival Intel Corp. Shares surged in late trading.

Strides in server chips will help propel third-quarter revenue to about US$2.55 billion, according to Santa Clara, California-based AMD on Tuesday, topping analysts’ average prediction for US$2.3 billion. The company also raised full-year sales forecasts, and second-quarter results beat Wall Street expectations. AMD stock climbed as much as 11 per cent in extended trading after closing at US$67.61 in New York.

After decades of lagging behind Intel, AMD has been catching up in recent years, helped by advances at Taiwan Semiconductor Manufacturing Co (TSMC), which makes chips on its behalf.

Intel, by contrast, has suffered a series of manufacturing setbacks, last week saying it has fallen behind in a new method for cutting-edge semiconductors and that it is considering scrapping a decades-old strategy of making chips in-house.

The admissions sparked a sell-off in Intel stock and underscored the ways Intel is being surpassed in chip production by TSMC, which in turn helps the Taiwanese company’s partners.

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