The day after the successful acquisition of Xilinx, AMD's market value surpassed Intel for the first time in history. However, this is only one day.
After the release of the first Zen architecture in 2017, AMD's luck has turned around.
But few expected that in a short period of time, AMD would be able to break through a milestone: for the first time in history, its market capitalization surpassed that of its old rival Intel.
On February 14, AMD completed its acquisition of Xilinx for $49 billion.
After the transaction, the original Xilinx shares were converted into 428 million new AMD shares at a ratio of 1:17234, and together with the original 1.2 billion shares, the total number of AMD shares reached 1.628 billion shares.
On February 15, AMD closed at $121.47, and the total market capitalization successfully exceeded $197.75 billion, which was $510 million higher than Intel's $197.24 billion.
However, after the opening of the market on February 16, Intel has regained its superiority.
From the brink of bankruptcy to a brilliant future
In February 2022, this is not the first good news for AMD.
Previously, market research firms confirmed that amD accounts for 25.6% of the x86 processor market share in the current world CPU market.
In the survey of the game platform Steam, the number of CPUs used by AMD users decreased in December 2021, and the number of similar users rebounded in 2022.
Intel still has a three-quarters global market share of x86 processors, and in Steam's survey, Intel's chips are still installed on the PCs of 70% of users worldwide.
And Intel's revenue and profit are also higher than AMD, not to mention that it has its own exclusive chip production facilities around the world, and AMD still only has to complete the design and outsource the production of physical products.
But AMD is losing intel's lead, and the situation will get even more interesting when the Zen 4 comes later in 2022.
By market capitalization, AMD is now a bigger company than Intel.
This is a contrasting shift for a company that was on the brink of bankruptcy 6 years ago. Since the launch of the revolutionary Zen CPU microarchitecture in 2017, AMD now has a much higher CPU market share than in the past, giving it the money to execute the largest acquisition in the history of the semiconductor industry.
Given these backgrounds, AMD's valuation is higher than Intel's, indicating that the market is generally more optimistic about its development expectations. The reason is good: the acquisition of FPGA manufacturing giant Xilinx has given AMD a broad and diversified semiconductor product portfolio, opening up new profit channels in autonomous driving, aviation, 5G communications, Internet of Things and other fields.
Xilinx itself is a health company. Its third-quarter earnings report reported quarterly revenue of more than $1 billion, up 26% year-over-year. Meanwhile, since the $16.7 billion acquisition of Altera in 2015, Intel's corresponding Programmable Solutions Group (PSG) product market share has been eroded by Xilinx for several years.
And in a recent earnings call, Intel announced that the production of PSG in 2021 will be greatly affected by the supply chain crisis, which may reduce expected revenue by $500 million.
Correspondingly, AMD will work more smoothly with Xilinx, and the company plans to launch the first new chip that integrates the unique logic architectures of AMD and Xilinx to the market in 2023.
AMD's outlook is good, but it's not really relaxing. Nvidia's expectations are also good, and its $662.38 billion market capitalization is more than Intel and AMD combined.
AMD's current market capitalization is not the same as when its share price first surpassed Intel in July 2020. That was the first time in 15 years that AMD's stock price surpassed Intel's, but intel's market capitalization was $260 billion at the time, while AMD's market capitalization was $74 billion.
At the time, Intel was trading at $61.57 and AMD at $61.79. The situation is far different: AMD's successful acquisition of Xilinx was priced at $121.47, while Intel's stock price was $48.44.
Intel is certainly not satisfied with the market share being taken away, indicating that it is going to regain momentum in the consumer market. Intel CEO Patrick Gelsinger is betting on the company's future on a variety of prospects, including partnering with other companies to produce chips through the IDM 2.0 strategy, and significantly expanding the company's R&D budget. In the near future, intel investor relations days, the market will learn more about this.
A brief history of AMD and Intel
In July 1968, two of the co-founders of Fairchild Semiconductor, Robert Neuss and Gordon Moore, resigned, and on July 16 of the same year, they co-founded Intel Corporation as "Integrated Electronics".
A few months later, AMD was founded in 1969, and the founders were also from Fairchild Semiconductor.
Since then, the two companies, with their common pedigree and similar origins, have been fierce rivals, both trying to outdo each other with the latest technology and the most powerful processors.
Competition from industry giants
Shortly after developing the x86 chipset and making an initial public offering (IPO) in 1971, Intel became the dominant player in the microprocessor industry.
Intel has always tended to dominate all areas of the CPU market, including high-end performance processors. AMD focuses on lower-cost, affordable mid- to low-end chipsets.
For most of its history, AMD has been a loser under Intel.
By 2016, AMD had only about a quarter of the CPU market left, while Intel dominated more than 70 percent.
AMD regains market share
In March 2017, Ryzen, with its new design, launched, AMD positioned it as a more affordable alternative to high-end CPUs and a product that would challenge Intel's best chips.
The fast and high-performance Ryzen has greatly increased AMD's sales.
In 2019, AMD had a 23% CPU market share, and by the third quarter of 2021, the company's share of the overall CPU market was close to 40%.
For desktop PCs, AMD has a 32% market share in 2019 and Intel and AMD have a market share of 50/50 as of 2021.
However, with the introduction of Intel's 12th generation processors, AMD's share has declined in 2022.
But what is certain is that the competition between the two companies will continue.
What do you think about this? Comments are welcome
---- the full text ends here, if you like, please click "Watching" or share to the circle of friends.
- END -