/Intels data-center customers may be digesting, but AMDs buffet is wide open – MarketWatch

Intels data-center customers may be digesting, but AMDs buffet is wide open – MarketWatch


While Intel Corp. says data-center customers are “digesting,” they seem to still be bellying up to a longtime rival’s buffet.

Advanced Micro Devices Inc.’s server-chip sales are not having any of the issues that its big rival discussed last week (when Intel said data-center sales dropped by 20%) leaving investors with the obvious conclusion: AMD
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must be taking some market share away from Intel
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in the coveted data-center business. AMD reported record quarterly sales Tuesday afternoon, and Chief Executive Lisa Su revealed that data-center sales had doubled from the same time last year.

AMD executives and investors have long dreamed of again becoming a legitimate competitor to Intel in the server and data-center market, and Su appears to have made that dream come true. Its Epyc line of server chips experienced massive sales growth in the first quarter that Intel’s Xeon did not. Unfortunately, AMD again avoided providing raw sales figures to judge, but at least Su gave a qualitative measure separate from the also-booming semi-custom business, which provides chips for both of the new gaming consoles on the market.

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“Based on both AMD and Intel’s earnings reports, I do believe that AMD took a bit of server share from Intel,” said Patrick Moorhead, principal analyst at Moor Insights and Strategy. “AMD unfortunately does not report Epyc revenue and blends with semi-custom, but I do believe Epyc grew revenue while Xeon revenue declined.”

AMD also believes that momentum in data center will continue. Executives added more than $1 billion to their annual revenue guidance, and said sales in the current quarter would grow by more than 85%. One analyst, Vivek Arya with BankofAmerica Securities, asked where AMD gets that confidence, opening Su up for a dig at Intel.

“Could you give us some sense of what has changed in the last three months, because your competitor was recently talking about cloud digestion, and you’re raising guidance by $1.3 billion,” Arya asked.

“I think we saw actually strong signals in the first quarter that it would be a strong data-center year for us,” Su said. “The supply chain has been tight overall for the semiconductor industry, and we’ve been working very closely with our supply-chain partners and so we also have good visibility to additional supply as we go throughout the year.”

While declining to call out the larger rival that for years has foiled her predecessors’ attempts to compete with it, Su still said what she needed to — while Intel may face a demand problem for its server chips, AMD is only concerned about supply as it enters what she called a “high performance computing mega cycle.” That fact alone should be enough to give executives at Intel indigestion.

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