AMD Set to Battle Intel in the Server Chip Segment
AMD to challenge Intel in the server chip segment
Computing chip developer Advanced Micro Devices (AMD) began selling its new generation of high-performance processors for data centers on Tuesday, June 20, in a bid to drive its way back into the data center computing engines market, which is currently dominated by Intel (INTC).
AMD revealed a new line of advanced desktop computer processors in April, clearly hoping to peel away market share from Intel. And so far, AMD’s Ryzen chips for personal computers have performed well in independent tests.
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On Tuesday, June 20, AMD introduced four of its nine Epyc chips. AMD claims that Epyc offers higher performance at lower prices than the comparable Intel chips currently on the market.
AMD shares surged by 6.0% that day and have galloped by a whopping 147.8% in the past 12 months.
AMD’s move could prompt other entrants in the lucrative segment
Intel enjoys a decent net margin of 17.4% as the graph above shows. The market for such processors is highly profitable, and AMD wants a piece of that action. Chip makers like Qualcomm (QCOM), Cavium (CAVM), and even IBM (IBM) will likely be challenging Intel in servers.
Notably, AMD has showcased systems based on Epyc in front of server vendors including Hewlett-Packard Enterprise (HPE), Lenovo (LNVGY), and Dell, and said that the chips were already being used by major cloud-computing providers.