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

Intel Corp’s latest focus on making chips to meet rising demand will give Advanced Micro Devices Inc, 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 Thursday it expects revenue from its segment housing PCs to grow in low to mid single digits, and its datacenter and AI business to grow in high teens from 2023 through 2026.

The company’s shares fell about 6%, while those of AMD slipped 1% on Friday.

AMD’s market cap briefly breached Intel’s earlier this week when it closed its $50 billion Xilinx deal. AMD is now about $1 billion short of Intel’s roughly $182 billion market cap, both far from Nvidia’s $585 billion.

In servers, AMD had less than 5% market share in 2018, but now holds 15%. This could go as high as 25%, WestPark Capital analyst Ruben Roy said. In PCs, he expects AMD market share to reach high 20s from its current 18% to 20% range.

“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 tenth spot from 14.