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No. AMD are outcompeting them on x86 on desktop, server and laptop. Cloud vendors making and pushing their own Arm CPUs, Apple and MS with their own laptop / de

No. AMD are outcompeting them on x86 on desktop, server and laptop. Cloud vendors making and pushing their own Arm CPUs, Apple and MS with their own laptop / desktop CPUs. If Intel can avoid a collapse in market share over a five year horizon they will have done very well. What might save them is a major issue with TSMC (possibly a political one).

paxys 6y ago
Where are the numbers to back that up? Intel has a >80% share in laptop and >97% share in server chips. The only place AMD is competitive is high-end desktops, and there too Intel has 60%. The only big blow to Intel so far is the loss of Macs, but Apple's overall market share in that space is under 10%. Sure other vendors (including cloud providers) are starting to roll out ARM offerings, but it's very early to say whether they will be successful, let alone dominant. Remember that Microsoft already tried and failed once with Windows RT many years ago.
- klelatti 6y ago
  I've seen businesses before where everything seems fine (from the numbers) and then suddenly the structure of the market changes - be it 'disruption' or something similar. Remember Nokia? Intel looks like its in precisely such a situation now: - AMD is as good as or beating Intel on performance on server, desktop and laptop (not just desktops). - Apple (and now MS) looking to control CPUs in their laptop and desktop products and producing Apple has a superior product as a result. - Nvidia will soon own Arm and will be pushing it's own Arm CPUs. - The cloud vendors all the see the (price) advantage of Arm based CPUs and are starting to promote them. - Even a startup like Ampere can produce a product that is competitive with Intel. That's a lot of competition. Add to this that Intel is still having process problems. So on a backward looking basis all looks fine. Looking forward not so much.
  - paxys 6y ago
    Yes and there are businesses where everything is looking fine and it continues to stay fine. There are plenty of historical examples for every single potential scenario. And if you really feel strongly about it then Intel is the perfect shorting opportunity (currently valued at $200B). Clearly the market still has some confidence.
    - klelatti 6y ago
      You've not given any reason why Intel will fend off AMD, Apple, Amazon, Nvidia etc. And the market has exactly the same concerns as I do. Intel has a P/E ratio of less than 10 with strongly growing revenue and eps (even boring old IBM and Dell have much higher P/E ratios). Why? Because the market has no confidence it can sustain these earnings over the long term. EDIT: From Motley Fool > Once the head of the pack in computer processors, Intel (NASDAQ: INTC) is coming under serious attack in its core business. Rival big tech companies are opting to develop their own chips, with the latest being mighty Microsoft (NASDAQ: MSFT). On Friday's news that Microsoft is doing the go-it-alone thing, Intel's stock fell by 6.3% on the day.
  - pjmlp 6y ago
    Yep I remember Nokia, I still use their phones (now running Android), they own Bell Labs and Lucent nowadays.
- valuearb 6y ago
  Looking backwards, everything is great for Intel!
- ksec 6y ago
  Yes there is still a long way to go, but not 15 years.... 50% of Server Market is HyperScaler. That is a possibility of nearly half of Server Sales gone. 97% number is no longer accurate as AMD has gain some ( rather small ) market shares in terms of revenue. But Intel is still >90%. ( In Revenue, not Volume ) In the short term most hyperscaler are only going to be switching may be around 50% of their infrastructure, since x86 will still be in demand. But the trend is set and there are no reversal. And Server Segment is the most profitable segment. That is 25% of profit gone in the short term. And if you now include AMD for the remaining x86 market, you are looking at another reduction. Depending on how AMD is executing ( Which in my book is not nearly good enough on their Server Segment, mainly due to conservative planning for Capacity ) AMD is also for the first time in history really competing in Notebook market with their APU. They have a lot of lessons to learn with regards to working with Notebook manufacture. But again the numbers suggest AMD is making lots of inroad, holding back by capacity again. You then have majority of the volume driven by OEM and Business usage. These CPU are low margin business. But AMD are not interested in those, and Intel needs those to fill capacity, so they are fine. So in the next 5 years you are looking at roughly 25% reduction of profits or revenue. Now of course Intel are making their own GPU and are expanding into Network and SSD. And more importantly the market for both PC and Server is still expanding. Which means despite having a lower market share in terms of percentage the revenue number may not be as bad. But again, there nothing even on paper that suggest Intel could change its course. They couldn't even give a valid argument in Investor notes or Technical Forum meetings to clam the market.
filmgirlcw 6y ago
Intel is definitely in trouble but five years way too fast of a prediction, even assuming Intel is utterly unable to do anything in the interim. Take AMD. AMD doesn’t have the volume or capacity with partners like TSMC to produce at the rate Intel does, even if demand justified it (and I’ll go on record and say there isn’t demand for AMD chips that will match demand for Intel chips across segments and there won’t be for five years, to use your timeline). Intel is truly on the ropes and is getting screwed on all sides, but AMD is less than 1/10th the size and in this sort of commodity market, size absolutely matters. AMD can’t reliably take the sorts of orders Intel can. It doesn’t have the clout or cash flow to buy the wafers. It doesn’t have its own fabs and is fighting for space and resources against Nvidia and Apple, who are both larger. It’s great AMD has had such a resurgence (I’m a Mac user but I’m finalizing a build on the first AMD system I’ll have owned since 2003), but they aren’t a real factor in Intel’s decline, outside of adding to the narrative of all aspects of Intel’s business being challenged. Apple is a threat insofar as it shows the limitations of current Intel hardware, but outside of smartphones, it doesn’t do the volume to pose a real challenge for many of Intel’s markets. Apple isn’t selling into the same places Intel is and across the spectrum of requirements and it is a vertically -integrated company who wants to sell its hardware, software, and services. Apple doesn’t want to sell into the data center (the recent AWS deal proves that very clearly). It’s similar for Amazon. Amazon having its own custom chips for certain workloads doesn’t change the fact that most of AWS’s millions of servers are and will continue to be Intel. Could that change long-term, sure! But it’ll take more than five years for them to get to a point where they can produce those chips in a volume that could match Intel (assuming Amazon even wants to be in the business of making large volumes of its own processors). Intel is facing massive challenges that will likely be most visible several years from now, and I’ll go as far as to say that the company is wounded right now in a very real way. But economies of scale and R&D cycles necessitate that we’re not going to see a collapse in market in five years.
- klelatti 6y ago
  The theme underpinning this comment is that the competition can't scale up - which is effectively a view that TSMC can't scale up and indeed TSMC is the big risk in this hypothesis. But TSMC has scaled up quickly before to produce 200m+ iPhone CPUs. And the money is there - Amazon, MS, Google, Nvidia and even AMD are not exactly paupers. As I've said below Intel's P/E ratio is less than 10. That's extraordinarily low for a company in this market with growing revenue and eps. Clearly the market agrees with me that Intel can't sustain these earnings even over the medium term.

paxys 6y ago

Where are the numbers to back that up? Intel has a >80% share in laptop and >97% share in server chips. The only place AMD is competitive is high-end desktops, and there too Intel has 60%. The only big blow to Intel so far is the loss of Macs, but Apple's overall market share in that space is under 10%. Sure other vendors (including cloud providers) are starting to roll out ARM offerings, but it's very early to say whether they will be successful, let alone dominant. Remember that Microsoft already tried and failed once with Windows RT many years ago.

klelatti 6y ago
I've seen businesses before where everything seems fine (from the numbers) and then suddenly the structure of the market changes - be it 'disruption' or something similar. Remember Nokia? Intel looks like its in precisely such a situation now: - AMD is as good as or beating Intel on performance on server, desktop and laptop (not just desktops). - Apple (and now MS) looking to control CPUs in their laptop and desktop products and producing Apple has a superior product as a result. - Nvidia will soon own Arm and will be pushing it's own Arm CPUs. - The cloud vendors all the see the (price) advantage of Arm based CPUs and are starting to promote them. - Even a startup like Ampere can produce a product that is competitive with Intel. That's a lot of competition. Add to this that Intel is still having process problems. So on a backward looking basis all looks fine. Looking forward not so much.
- paxys 6y ago
  Yes and there are businesses where everything is looking fine and it continues to stay fine. There are plenty of historical examples for every single potential scenario. And if you really feel strongly about it then Intel is the perfect shorting opportunity (currently valued at $200B). Clearly the market still has some confidence.
  - klelatti 6y ago
    You've not given any reason why Intel will fend off AMD, Apple, Amazon, Nvidia etc. And the market has exactly the same concerns as I do. Intel has a P/E ratio of less than 10 with strongly growing revenue and eps (even boring old IBM and Dell have much higher P/E ratios). Why? Because the market has no confidence it can sustain these earnings over the long term. EDIT: From Motley Fool > Once the head of the pack in computer processors, Intel (NASDAQ: INTC) is coming under serious attack in its core business. Rival big tech companies are opting to develop their own chips, with the latest being mighty Microsoft (NASDAQ: MSFT). On Friday's news that Microsoft is doing the go-it-alone thing, Intel's stock fell by 6.3% on the day.
- pjmlp 6y ago
  Yep I remember Nokia, I still use their phones (now running Android), they own Bell Labs and Lucent nowadays.
valuearb 6y ago
Looking backwards, everything is great for Intel!
ksec 6y ago
Yes there is still a long way to go, but not 15 years.... 50% of Server Market is HyperScaler. That is a possibility of nearly half of Server Sales gone. 97% number is no longer accurate as AMD has gain some ( rather small ) market shares in terms of revenue. But Intel is still >90%. ( In Revenue, not Volume ) In the short term most hyperscaler are only going to be switching may be around 50% of their infrastructure, since x86 will still be in demand. But the trend is set and there are no reversal. And Server Segment is the most profitable segment. That is 25% of profit gone in the short term. And if you now include AMD for the remaining x86 market, you are looking at another reduction. Depending on how AMD is executing ( Which in my book is not nearly good enough on their Server Segment, mainly due to conservative planning for Capacity ) AMD is also for the first time in history really competing in Notebook market with their APU. They have a lot of lessons to learn with regards to working with Notebook manufacture. But again the numbers suggest AMD is making lots of inroad, holding back by capacity again. You then have majority of the volume driven by OEM and Business usage. These CPU are low margin business. But AMD are not interested in those, and Intel needs those to fill capacity, so they are fine. So in the next 5 years you are looking at roughly 25% reduction of profits or revenue. Now of course Intel are making their own GPU and are expanding into Network and SSD. And more importantly the market for both PC and Server is still expanding. Which means despite having a lower market share in terms of percentage the revenue number may not be as bad. But again, there nothing even on paper that suggest Intel could change its course. They couldn't even give a valid argument in Investor notes or Technical Forum meetings to clam the market.

filmgirlcw 6y ago

Intel is definitely in trouble but five years way too fast of a prediction, even assuming Intel is utterly unable to do anything in the interim. Take AMD. AMD doesn’t have the volume or capacity with partners like TSMC to produce at the rate Intel does, even if demand justified it (and I’ll go on record and say there isn’t demand for AMD chips that will match demand for Intel chips across segments and there won’t be for five years, to use your timeline). Intel is truly on the ropes and is getting screwed on all sides, but AMD is less than 1/10th the size and in this sort of commodity market, size absolutely matters. AMD can’t reliably take the sorts of orders Intel can. It doesn’t have the clout or cash flow to buy the wafers. It doesn’t have its own fabs and is fighting for space and resources against Nvidia and Apple, who are both larger. It’s great AMD has had such a resurgence (I’m a Mac user but I’m finalizing a build on the first AMD system I’ll have owned since 2003), but they aren’t a real factor in Intel’s decline, outside of adding to the narrative of all aspects of Intel’s business being challenged. Apple is a threat insofar as it shows the limitations of current Intel hardware, but outside of smartphones, it doesn’t do the volume to pose a real challenge for many of Intel’s markets. Apple isn’t selling into the same places Intel is and across the spectrum of requirements and it is a vertically -integrated company who wants to sell its hardware, software, and services. Apple doesn’t want to sell into the data center (the recent AWS deal proves that very clearly). It’s similar for Amazon. Amazon having its own custom chips for certain workloads doesn’t change the fact that most of AWS’s millions of servers are and will continue to be Intel. Could that change long-term, sure! But it’ll take more than five years for them to get to a point where they can produce those chips in a volume that could match Intel (assuming Amazon even wants to be in the business of making large volumes of its own processors). Intel is facing massive challenges that will likely be most visible several years from now, and I’ll go as far as to say that the company is wounded right now in a very real way. But economies of scale and R&D cycles necessitate that we’re not going to see a collapse in market in five years.

klelatti 6y ago
The theme underpinning this comment is that the competition can't scale up - which is effectively a view that TSMC can't scale up and indeed TSMC is the big risk in this hypothesis. But TSMC has scaled up quickly before to produce 200m+ iPhone CPUs. And the money is there - Amazon, MS, Google, Nvidia and even AMD are not exactly paupers. As I've said below Intel's P/E ratio is less than 10. That's extraordinarily low for a company in this market with growing revenue and eps. Clearly the market agrees with me that Intel can't sustain these earnings even over the medium term.