Intel’s loss is AMD’s gain as EPYC server CPUs benefit from Intel’s delays

Enlarge / AMD’s EPYC server processors are benefitting from Intel’s delays.

AMD

Earnings reviews for tech firms this quarter have been combined at greatest. Apple, Microsoft, Alphabet, and others have managed to eke out a bit progress, whereas the likes of Meta and Nintendo shrank a bit, and most firms’ projections for the following quarter are additionally less-than-optimistic.

One firm that has been hit significantly onerous is Intel, which noticed its revenues decline from $19.6 billion in Q2 of 2021 to $15.3 billion in 2022. The firm’s earnings presentation (PDF) confirmed weak spot throughout the board for a wide range of causes: weaker demand for shopper PCs, cash invested in getting the Arc devoted graphics merchandise off the bottom, and “competitive pressure” within the server CPU market.

That competitor is AMD, whose EPYC line of server processors was only one vibrant spot in a file quarter for the corporate. Revenue elevated from $3.9 billion in Q2 of 2021 to $6.6 billion this 12 months, with $673 million of that extra income coming from EPYC processor gross sales and the corporate’s information middle division. This is an enormous deal for AMD, which had some success with its Opteron server CPUs within the mid-2000s however had principally ceded that floor to Intel all through the 2010s.

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AMD’s shopper CPUs additionally generated extra income this quarter, from $1.7 billion in Q2 of 2021 to $2.2 billion in 2022, which the corporate credit to gross sales of Ryzen laptop computer processors. Gaming income was additionally up from $1.3 billion final 12 months to $1.7 billion this 12 months, due to the semi-custom chips embedded in consoles just like the PlayStation 5, Xbox Series S and X, and the Steam Deck (and regardless of diminished GPU gross sales as the cryptocurrency mining increase dies down and GPU costs lastly return to regular).

The Intel vs. AMD dynamic in server CPUs mirrors the scenario in shopper PCs a few years in the past. Intel’s next-generation “Sapphire Rapids” Xeon processors have suffered repeated delays, opening up a chance for AMD to make headway with its EPYC server CPUs, first by providing extra CPU cores than Intel and later by outpacing Intel’s single-threaded efficiency. Intel has managed to shift this dynamic in shopper PCs considerably with its Twelfth-generation Core chips and the Alder Lake structure, however we’re nonetheless ready for brand new server chips that would do the identical.

One factor Intel’s and AMD’s earnings reviews have in frequent is that they each say the patron PC market will proceed to stoop after a few years of pandemic-driven power. AMD CEO Lisa Su predicted that the patron PC enterprise will probably be down by the “mid-teens” subsequent quarter, and Intel CEO Pat Gelsinger stated that Intel’s OEM prospects had been “reducing inventory levels at a rate not seen in the last decade.” Nevertheless, each firms have new processor launches slated for later this 12 months, with each Ryzen 7000-series CPUs and Thirteenth-generation Intel Core processors anticipated within the fall.

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