Intel's new generation of chips is delayed, and AMD takes advantage of the opportunity to grab the market

Recently, Intel (INTC) released its second quarter financial report. Although its performance was better than expected, its server chip revenue fell by 9%, highlighting the aggressiveness of its competitor AMD. Intel admitted for the first time that it felt huge competitive pressure. The industry believes that the battle between the two chip giants will continue. Due to the delayed launch of Intel's new generation of chips, AMD's market share is expected to further expand.

Juheng.com reported that data center server chips have been won by Intel in the past, but Intel has been affected by delays in 10nm and other processes in recent years, and the launch schedule of new products has been continuously postponed. In addition to Ice Lake being postponed to the second quarter of this year, the latest generation of new server CPUs expected to be code-named Sapphire Rapids has also been officially announced to be delayed from the end of this year to the first half of next year for mass production, allowing rival AMD to take advantage of the market by adopting TSMC's process.

Although Intel still holds about 90% of the market share in data center server chips, AMD's performance and supply have been more in line with market expectations in recent years, allowing AMD's market share to gradually move from single digits to nearly 10%. ARM's market share is also in the single digits.

Currently, Taiwan's server ODM manufacturers include Foxconn, Quanta, Wiwynn, Inventec, MiTAC, ASRock, and Gigabyte. Among them, the first three have almost won orders from the four major American customers, and the latter two are manufacturers that have actively deployed server business in recent years. Their product architecture is mostly based on AMD. Benefiting from the increase in AMD's market share in recent years, their server business has grown the most.

As global demand for 5G and data transmission increases, demand for data center servers will also rise. However, in the first half of this year, Taiwan's server manufacturers' operating performance slowed down relatively due to the delayed launch of Intel's new products and material shortages. The material shortage situation in the second half of the year will remain severe, but industry insiders believe that the material shortage situation has the opportunity to ease compared to the first half of the year, and the peak season will help boost performance. They are optimistic that operations in the second half of the year will be better than in the first half.

Looking ahead, server manufacturers believe that short-term operations will be affected by the shortage of chips and components, but the mid- to long-term demand momentum is stable. In recent years, they have also introduced and tested AMD products in response to customer demand. As for the postponement of Intel's new server CPU until next year, they believe that the impact will be limited.