Advanced Micro Devices (AMD) stopped producing its own chips in 2009 to focus on chip design and utilize third-party foundry manufacturing services, as it could not afford the costly investments needed to keep its factories competitive with Intel. However, Intel’s manufacturing technology was superior until recently, when delays and mistakes related to its 10-nanometer process allowed AMD to gain an advantage.
AMD’s CPUs have benefited from superior manufacturing technology provided by Taiwanese semiconductor manufacturing company TSMC, leading to significant market share gains in both the PC and server CPU markets. Intel, on the other hand, has struggled with inferior manufacturing technology, but is now planning to catch up by using TSMC’s advanced 3nm process and focusing on becoming a major foundry by 2030.
Increased competition in the CPU market with the emergence of Arm-based CPUs from Microsoft and Qualcomm threatens AMD’s market share gains. Intel, however, could potentially benefit from the competition and is working to optimize its manufacturing process for Arm-based chips.
As Intel works to close the gap in manufacturing technology and competition in the CPU market intensifies, AMD may struggle to maintain its market share gains in the coming years.
Investors considering buying AMD stock should be aware of the changing landscape in the CPU market and potential challenges facing the company. The Motley Fool Stock Advisor team recommends looking into other stocks that could offer better returns in the future.
In conclusion, AMD’s manufacturing advantage over Intel is diminishing, and increased competition in the CPU market poses challenges for the company. Investors should carefully evaluate the changing dynamics in the industry before making investment decisions.
The information in this article was originally published by The Motley Fool and was written by Timothy Green. The Motley Fool has positions in and recommends Advanced Micro Devices, Microsoft, Qualcomm, and Taiwan Semiconductor Manufacturing. Intel remains a market leader, but AMD has seen significant market share gains in recent years, driven by its superior manufacturing technology.
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https://finance.yahoo.com/news/amds-key-advantage-over-intel-103000689.html