Intel stock gained 3.6%, AMD fell 7.6%
Intel (INTC) stock rose 3.6% on October 2 after a report from BlueFin Research Partners generated optimism that Intel could start producing its next-generation ten-nanometer manufacturing technology sooner than expected. Advanced Micro Devices (AMD), which has been benefiting from Intel’s supply shortage, fell 7.6% following the news.
Notably, Advanced Micro Devices stock has increased significantly in the last four months. The shortage in Intel’s chip supply proved to be a boon for Advanced Micro Devices, which gained a share in the server and high-end commercial desktop market.
Analyzing BlueFin’s report
According to a report from BlueFin Research Partners, Intel is making significant efforts and talking to several suppliers to increase its ten-nanometer production. The firm stated that Intel would be able to start producing its ten-nanometer production as soon as April, which is around 1.5-months earlier than the previous expectation of June.
Notably, Intel has been struggling with an inadequate manufacturing capacity for the ten-nanometer node in the past four months. The rising demand for PC CPU processors and the delay in the shift to the more advanced manufacturing techniques for ten-nanometer volume production also added to the supply woes. The unexpected increase in the demand for Intel’s CPUs followed higher cloud capital spending, the stabilizing PC market, and a rise in the enterprise server upgrade system.
Impact on rivals
Intel’s supply shortage issues could impact Nvidia’s (NVDA) PC GPU business, which uses systems containing Intel CPUs, and dent PC makers like HP (HPQ), Lenovo, Dell, Apple, and Acer. Intel’s manufacturing and supply issue would likely have a negative impact on PC DRAM sales and DRAM prices, which would likely impact DRAM makers including Micron (MU).
Starting the production process early should help Intel gain share in the PC processors market and compete with Advanced Micro Devices, which is expected to launch its seven-nanometer processors in the first half of 2019.
AMD and Intel’s market share
According to data compiled by Mindfactory, Advanced Micro Devices’ CPU market share reached nearly 65% in September, while Intel’s share fell from the previous month to ~35%. Notably, Advanced Micro Devices sold as many as 3,000 CPU units in one week in September. At one point, Intel’s weekly sales fell below 1,000 units in September.