Jun 29, 2017
Changing Chip Dynamics May Favor Advanced Micro Devices Over Intel
With Advanced Micro Devices, Inc. AMD recently releasing its new EPYC server processor chips and market leader Intel Corporation INTC expected to respond with its own product launch within weeks, there is clearly a lot on the line in the semiconductor market at the moment.
Intel has virtually a monopolistic position in the server processor market at the moment, but Detwiler Fenton says there are early indications that AMD could be a legitimate threat.
EPYC chips are cheaper and faster than Intel's current Broadwell chip, but Intel's new chip is expected to begin shipping as soon as the third quarter. Until third parties can perform speed tests on both AMD and Intel's chips, investors should take any speed claims by the two companies with a grain of salt, Detwiler Fenton says.
In terms of pricing, the firm says Intel will likely aim as low as possible with its new chip in an effort to hold onto its market share.
But with so much about the new chips up in the air, investors can at least take comfort in all of the high-profile partners that AMD has landed with its new chips. AMD has deals in lace with Dell, Lenovo Group Limited (ADR) LNVGY, Hewlett Packard Enterprise Co HPE, Microsoft Corporation MSFT, Baidu Inc (ADR) BIDU and others.
"The fundamentals that underpin the CPU server market are fundamentally changing; with more complex competition coming online from x86 architectures (e.g., AMD) and in the future we will likely see ARM CPUs join the mix as well," Detwiler Fenton wrote this week. The firm believes that rising public cloud workloads will ultimately lead to server chip demand consolidation, a shift that "would not bode well for current market leader INTC."
Finally, AMD shareholders that were concerned about previous reports of problems with Ryzen chip performance on Linux systems can breathe a sigh of relief. The firm now reports those issues have seemingly been fixed via a microcode update.
by Wayne Duggan