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Goldman Sachs analysts told investors in a note Wednesday that Advanced Micro Devices, Inc. (NASDAQ:AMD) continues to take share in server CPU, while Intel (NASDAQ:INTC) posts strong results in client CPU.
In the note, they summarize Mercury Research’s recently published 3Q22 CPU volume and pricing data, in which AMD gained ~355bps of volume share in the server CPU market to reach 17.3% in 3Q22, up from 13.8% in 2Q22, with Goldman believing it is primarily driven by the continued ramp of “Milan.”
“The rate of change at AMD was even sharper when measured in dollars, as the company picked up ~490bps of revenue share on a sequential basis, from 22.9% in 2Q22 to 27.8% in 3Q22,” the analysts wrote. “Importantly, even after contemplating a weaker macroeconomic environment and an elongated enterprise adoption curve as a consequence, we still expect AMD Server CPU revenues to grow ~43% yoy in 2023, translating into ~570bps of share gain at the expense of Intel, as we anticipate the company maintaining and monetizing its Total-Cost-of-Ownership superiority through the next generation of Server CPUs.”
They added that Intel recently confirmed during its 3Q22 earnings call that its next-generation Server CPU offering, Sapphire Rapids, has been qualified for production release and that the “product ramp is well underway.”
“We nonetheless expect AMD to be better positioned given its performance-per-watt advantage, which is increasingly important given the inflationary backdrop, as we discuss here. From a pricing perspective, Server CPU ASPs declined modestly on a sequential basis for both AMD and Intel, by ~2% qoq and ~1% qoq respectively, although we note that AMD’s ASPs were still up ~8% yoy whereas Intel’s were down ~12% yoy, reflecting the divergence in competitive position between the two companies over the past 4 quarters,” they concluded.
