Intel disaster is about to lose the ‘chip king’ throne: Being behind by the company, thinking it is about to go bankrupt, succumbing to a woman

Tram Ho

Thảm hoạ Intel sắp mất ngôi 'vua chip': Bị công ty đi sau, tưởng sắp phá sản vượt mặt, chịu thua trước 1 người phụ nữ - Ảnh 1.

2022 was a successful year for AMD (Advanced Micro Devices) when for the first time in its history, the total market capitalization surpassed the leader Intel, breaking the $200 billion mark.

While the decline in PC sales hurt both rivals’ revenue, while Intel stock fell more than 7% after the earnings report, AMD gained nearly 2%.

AMD is currently the chip supplier for two Tesla models, the Mars Perseverance rover of the US Space Agency (NASA), 5G wave towers and the world’s fastest supercomputers.

“AMD is beating Intel on all fronts and unless this giant has a complete change or finds a new direction, sooner or later, the world No. 1 position in the chip industry will change hands,” said the expert. D2D Advisory’s Jay Goldberg warns.

Thảm hoạ Intel sắp mất ngôi 'vua chip': Bị công ty đi sau, tưởng sắp phá sản vượt mặt, chịu thua trước 1 người phụ nữ - Ảnh 2.

AMD was originally a secondary alternative to Intel

The irony is that 10 years ago, no one believed AMD could do this when it was on the verge of bankruptcy. Even from its inception, AMD was just a follower of Intel products.

“It sounds like a joke, because for decades since its inception, AMD has had problems with product quality, then in just 10 years everything has completely changed,” expert Goldberg admitted. receive.

The one who follows

Since its founding in 1968, Intel has always been the king of the chip market. The chip maker’s brand is synonymous with a guarantee of quality inside. During the 25 years from 1992-2017, Intel led the electronic chip market in terms of revenue. Even today, Intel is still the largest chip company by sales in the US.

Meanwhile, AMD was also established in Silicon Valley like Intel just 10 months after the rival went into operation. The AMD founder is also a former partner of the engineers who founded Intel. Initially, AMD mainly produced the chips that Intel did and aimed to follow the leader.

In 1970, Intel introduced the 1103 chip, the world’s first semiconductor memory chip. Just a year later, the product was the world’s best-selling semiconductor, and AMD followed suit with a similar, cheaper knockoff.

The CPU is the brain of the computer when it comes to data processing chips. Its structure is a semiconductor panel containing conductive metals such as Phosphorus or Boron. On the semiconductor board are micro-transistors (Transistors) that turn on and off continuously, thereby converting into binary data in the form of 0-1, then transferred to the multiplier (Core) to process information and give orders.

These commands contribute to the computer’s response when the user requests commands such as opening a website or email. If the chip is the brain of the computer, the nucleus is a second microbrain.

Thảm hoạ Intel sắp mất ngôi 'vua chip': Bị công ty đi sau, tưởng sắp phá sản vượt mặt, chịu thua trước 1 người phụ nữ - Ảnh 3.

Model of a common CPU

In 1971, Intel continued to release the 4004 processor, another huge success and so on, the company continued to release new products that dominated the market, while creating a series of standards for the family. semiconductor chip.

By 1997, Intel was used in 84% of computers worldwide, 10 times more sales than AMD and 6 times higher in production.

Entering the 2010s, AMD faced the risk of bankruptcy as well as rumors that it would be sold and laid off a series of employees. The brand had to give up many businesses in the semiconductor industry. But unexpectedly, in 2014, the company had a new female CEO named Lisa Su and it was this character who made a turning point for AMD.

Thảm hoạ Intel sắp mất ngôi 'vua chip': Bị công ty đi sau, tưởng sắp phá sản vượt mặt, chịu thua trước 1 người phụ nữ - Ảnh 4.

Intel was used by 84% of the world’s computers in 1997

Turning point

The first thing that CEO Su did was decide to give up the technology race for smartphones or sensors for the “Internet of Things”. While these are extremely attractive areas, they are not AMD’s main strengths, and the company does not have the resources to spread it across the front.

Instead, AMD targets electronic chips for supercomputers, graphics chips for gaming, artificial intelligence or devices that require outstanding quality.

This is an important decision as AMD has to find a niche in the semiconductor chip industry that is dominated by very few players. Intel is the king of CPU processing chips while Nvidia is the king of GPU graphics chips.

“If you look at how we did business a few years ago, maybe 80-90% of our customers were individual consumers, focused on personal computers and game consoles. But I think that supercomputers, big data centers for cloud computing are the real gold mines that AMD needs to aim for, “said CEO Lisa Su.

Thảm hoạ Intel sắp mất ngôi 'vua chip': Bị công ty đi sau, tưởng sắp phá sản vượt mặt, chịu thua trước 1 người phụ nữ - Ảnh 5.

AMD CEO Lisa Su

As a result, AMD later became the source of electronic chips for Amazon’s AWS cloud computing business, Alphabet’s Google Cloud, Oracle, IBM and even Microsoft’s Azura. All of these are core businesses that make money for large companies.

In addition, CEO Su also decided to cut costs when outsourcing instead of building production plants by himself, thereby reducing product costs. This strategy is in stark contrast to Intel, which doubled its factory construction budget by 2021, including a $20 billion plant project in Arizona and a $100 billion superfactory in Ohio. Even so, Intel has to wait many years to wait for these factories to complete.

Going back to the story, in 2017, AMD had a spectacular comeback with Ryzen chips, breaking many of the chip standards that Intel had set before. First, the transistors are newly designed in the style of “Zen Architecture”.

Then, instead of taking a single CPU and upgrading them to be as fast as possible, AMD created a CPU complex of many smaller CPUs on the same motherboard, interconnected and acting as a single unit. unified.

According to the Wall Street Journal (WSJ), these breakthroughs give AMD an advantage in production costs, saving power while still being as efficient as Intel’s advanced chips. At the time of its launch, Ryzen was advertised as being half as cheap and faster than its Intel counterparts.

Thanks to the new product Ryzen and strategic changes, by mid-2018, AMD’s total market capitalization has soared to more than 30 billion USD.

By 2020, Intel has a decision to go underground when it tries to reduce chip size from 14 nanometers (nm) to 10 nm. But while struggling with new research, the company’s supply of 14 nm chips did not meet demand amid the raging pandemic that disrupted the supply chain. As a result, Intel had to officially issue a statement of apology.

Thảm hoạ Intel sắp mất ngôi 'vua chip': Bị công ty đi sau, tưởng sắp phá sản vượt mặt, chịu thua trước 1 người phụ nữ - Ảnh 6.

AMD’s Ryzen chip model, half cheaper but faster than Intel’s contemporaries

In contrast, AMD was quick to launch a line of chips with the same power as 10 nm chips before Intel and had a spectacular speed.

In early 2022, 5 years after the launch of Ryzen, AMD’s total market capitalization officially surpassed Intel at $200 billion, but it didn’t last long. By August 2022, AMD once again overtook Intel but this time held out longer before falling behind again.

From 2014-2020, that is, since CEO Lisa Su took over, AMD’s stock has increased by 1,300%. Even with the PC market struggling, AMD’s stock has grown 660% over the past five years, while Intel’s stock has dropped 34%.

Of course, AMD’s path to rise and ambition to usurp Intel is not easy.

The fact that the US has made moves to promote domestic chip production, restricting imports from abroad makes AMD difficult because it largely outsources production. That is not to mention the decline in demand of the chip industry in the current context.

Thảm hoạ Intel sắp mất ngôi 'vua chip': Bị công ty đi sau, tưởng sắp phá sản vượt mặt, chịu thua trước 1 người phụ nữ - Ảnh 7.

Total market capitalization (billion USD)

*Source: WSJ, CNBC, CNN

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Source : Genk