CHIPPING AWAY AT CHIP MAKING

CHIPPING AWAY AT CHIP MAKING

Intel has typically accounted for 99 percent of the server processors sold during the last several years.  But, in recent years, the company has struggled to transition to a new chip manufacturing process.  Big failures of this sort are not atypical in instances when a company’s CEO is otherwise occupied with private matters (CEO Brian Krzanich was dismissed from his position in June of this year).

Thus, Intel’s unfortunate circumstance benefits other companies and, in particular, presents an opportunity for Advanced Micro Devices (AMD), run by CEO Lisa Su, to leap ahead of the line in their chip making efforts.  The company and their associates are already producing the latest version of AMD’s Epyc server processor, which is expected to start shipping in volume next year. Intel, however, doesn’t intend to start production of their newer server chip iteration until 2020.  A year’s head start is a mighty gift to AMD in what has come to be the most important market for the semiconductor industry.  Nineteen of the biggest tech companies (including Microsoft, Amazon, Google, Facebook) who build large data centers to service cloud-based systems are expected to expend about $93 billion on those efforts this year – up 42% from last year.  It looks like AMD has indeed found a marvelous opportunity for advancement.  Intel acknowledges that it will lose market share to AMD, but that it hopes to allay a deterioration greater than 15-20%. That, spoken by the same man who was at the helm when things became so badly botched.  So, be prepared to take it with a grain of salt!

CHIPPING AWAY AT CHIP MAKING

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