Stumbling Intel says it will rebalance, seeing AMD gain strength |
OAKLAND, Calif./BANGALORE, 27 January (Reuters) – Microprocessor giant Intel Corp ( INTC.O ) has stumbled badly as smaller rival AMD and others gather momentum. He says he will restore his balance this year.
The company beat Wall Street estimates by about 3 on Thursday billion dollars shocked the market with its lagging earnings forecast. The weakness of the global economy is compounding Intel’s problems.
Intel is still the three-hundred-pound gorilla in the market for central processing units (CPUs), the microprocessors called the brains of computers, and it says it’s going through its worst overhaul under a new CEO.
“We stumbled, didn’t we? We lost our share; we lost our momentum. We think that will stabilize this year,” Chief Executive Pat Gelsinger said on a conference call with investors.
Intel still dominates the PC and server processing chip markets with more than 70% market share, according to estimates by technology research firm IDC. But that’s down from more than 90% in those markets in 2017.
“Anyone from 1% to 13% is significant,” said IDC analyst Shane Rau. It’s up to you news gives that there is now a reliable second competitor in the market of server processors, which is fast and gaining momentum.
That rival is Advanced Micro Devices ( AMD.O ), which under Chief Executive Lisa Su has come back from the brink of bankruptcy and is taking business from Intel quarter after quarter. AMD’s market capitalization is roughly the same as Intel’s, which is a sign of investor confidence in AMD’s growth prospects.
Rau said Intel and AMD will face both macroeconomic headwinds and challenges rolling out their newest chips, but Intel also has a larger chipset problem to address. “I don’t think Intel is in a position to start regaining market share yet,” he said.
Processor customers can’t launch their products if new chip designs are late, and Intel struggled to deliver its latest data center chip, the Sapphire Rapids code.
“Sapphire Rapids is almost two years late. And that’s why AMD leapfrogged them,” said Bob O’Donnell of TECHnalysis Research.
Worse for Intel, benchmarks published by the two companies show that AMD’s latest server chip outperforms Sapphire Rapids on “general-purpose workloads,” according to Bernstein analyst Stacey Rasgo.
Graphics chip maker Nvidia is offering a range of services to central processors and former processor customers, including Apple and Intel also has increased competition as Amazon designs its own chips.
Gelsinger said 2023 will be a year of stabilization, then acceleration again. Intel has taken some painful steps and now says it has a good plan to follow. Some agree.
“Intel’s turnaround is taking some time, exacerbated by the economy, but I believe its plan is working,” said Forrester Research analyst Glenn O’Donnell. “It is introducing new products and its production is expanding with agreements with other chipmakers to use Intel’s manufacturing capacity.”
And investors are looking for further proof: AMD will report its results on Tuesday.
Reporting by Jane Lanhee Lee and Chavi Mehta; Edited by Peter Henderson and Bradley Perrett
Our standards: Thomson Reuters Trust Principles.
2023-01-27 09:13:36
Source – reuters
Translation“24 HOURS”