AMD Could Triple Market Share Amid Crippling Intel CPU Shortages
AMD and Intel have recently reignited a processor war after the former had gone years without a truly competitive offering with respect to overall performance. That all began to change when AMD launched its Ryzen desktop and mobile processors that have been well-received by enthusiasts and mainstream users, while dropping in at price points well below what Intel is offering in some cases. In addition, it appears things aren't going well for Intel right now as it is reportedly facing difficulties producing some of its latest versions of certain CPUs.
In fact, shortages of Intel Whiskey Lake mobile processors are so severe that it is impacting overall notebook shipments and forcing DRAM prices down as a result of an overabundance of memory due to lower consumption rates. Intel's woes are a blessing for AMD as the chipmaker has a golden opportunity to supplant Intel in certain model SKUs where it competes directly. Analyst firm Jefferies has raised its target price on AMD shares from $30 to $36 as it sees big potential market share gains for AMD as a result of Intel's supply issues.
Analyst Mark Lipacis points to a report from research firm Fubon that claims HP will be adopting AMD processors for up to 30% of its consumer machines next year. Dell will also use more AMD chips for its commercial PC line according to the report. Analysts think that AMD has the chance to triple its market share to 30% of the market from the meager 10% that it has today.
"Fubon's report that Intel will undersupply the PC market between 4Q18 and 2Q19 leaves us with higher conviction that AMD will report improving revenue, pricing and margins near term, and that is positioned to take share in the
Lipacis expects to see Intel supply constrained through 2019 and AMD climbing to 30% market share on that constraint isn't "out of the question" he says. Many have wondered what is going on at Intel that has caused such massive shortages of processors. Investment firm J.P. Morgan has issued a report that says Intel's shortage is worsening and that the chipmaker is having capacity issues from delaying its move to 10nm manufacturing tech.