Outsourced manufacturing helps AMD outpace Intel
CALIFORNIA, UNITED STATES — Outsourcing their chipmaking process helped semiconductor company Advanced Micro Devices (AMD) surpass its industry rival Intel.
This comes as the latter shocked its investors by forecasting losses this quarter due to a slowdown in the PC market and their data center division.
According to Intel CEO Pat Gelsinger, the company has been losing market share in the data center industry due to the rise of AMD.
At the same time, the firm’s PC market continues to struggle after the demand for consumer electronics fell.
“We stumbled, right, we lost share, we lost momentum. We think that stabilizes this year,” added Gelsinger.
AMD spun its fab department into its own company called GlobalFoundries in 2009. It also keeps contracts with outside firms like Taiwan-based TSMC to manufacture its chips.
Last 2021, Intel had also decided to outsource its chipmaking process to TSMC to regain lead in the sector and save on operational costs.
However, profit margins for the firm are still expected fall further after dropping from 58.4% in Q42020 to 43.8% in Q42022.
Meanwhile, the firm’s first-quarter revenue is forecasted to land between $10.5 billion to $11.5 billion.
In terms of shares, Intel expects an adjusted loss of 15 cents per share versus expectations of a 24 cents per share profit.
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