Tuesday, June 12, 2018

Intel Discusses Giving Up Market Share To AMD

One of AMD's main drivers for the back half is the company's planned EPYC server growth. If this analyst's conversation with Intel's CEO was correct Intel admitted to giving up more market share than AMD guided they'd take. Tell me that's not huge.

CNBC reported that a Nomura Instinet analyst met with Intel's CEO Brian Krzanich. Intel apparently told this analyst something to the effect that "it was Intel's job to not let AMD capture 15-20% market share [in servers]." He was referring to the second half of 2018.

Did you just catch that?

AMD's CEO Dr. Lisa Su said on last earnings call, "We remain focused on achieving mid-single-digit server unit share by the end of 2018."

To clarify, "mid-single-digit" means for a round number 5%. Fair?

You don't have to be a rocket scientist to see that there is a huge gap between the "tiny" AMD guide of 5% and just below the low-end 15% share that Intel implied they are ok giving up.

My point is they will not give up 15-20% share. 14% they would?

We checked in with Intel and they said the CEO's answer needs to be understood in context of the question. The CEO was specifically asked would they give up 15-20% market share to AMD and the CEO's answer (above) was to that question. So the answer was not as bad as the media made it out to be.

My take though is even still, the answer you'd want to hear is something to the effect "we're not ceding any share."

Maybe AMD's guide is a touch conservative?

We've been writing that our EPS numbers have been way above the Street. The Street estimates are at $.45 for this year. Our earnings model shows simple math getting us closer to $.73.

Our numbers are not assuming EPYC crushes it. But with Intel letting market share go our numbers could even we be low.

This article was updated June 14th 5:56 PM to reflect the paragraph where we checked in with Intel included above.


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