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Chip designer Advanced Micro Devices, Inc (AMD) received a fresh dose of optimism from research firm Wedbush yesterday as analyst Mayyy Bryson outlined in an interview given to CNBC that he believes the company will outperform its peers in the semiconductor space. Bryson believes that AMD will continue to gain market share from rival Intel Corporation in the personal computing space, outlining that in his opinion this trend will continue throughout the course of this year and the next. He also mentions NVIDIA, fearing that the decline in cryptocurrency mining will hurt the company in the short term but that its strong product portfolio ensures that NVIDIA is the leader in its space.
Intel Will Be Unable To Stop Bleeding Market Share To AMD Until 2024 End Believes Wedbush
Bryson's comments came on the day when Senate passed the U.S. CHIPS Act, which is a multi-billion dollar proposal aimed at boosting American chip production to bring it at par with global levels. The U.S.'s only chip manufacturer capable of manufacturing products with advanced technologies is Intel, and over the course of the last couple of decades, companies such as the Taiwan Semiconductor Manufacturing Company (TSMC) have caught up technologically with Intel, partly due to massive government support.
AMD also sources all of its latest computing products from TSMC, and is set to indirectly benefit from the CHIPS Act, since some of the funding in it can be used by the Taiwanese company for its new under-construction facility in Arizona.
Talking about AMD, Bryson outlined that he believes that the company is one of the strongest players in the semiconductor industry. The analyst stated that in his opinion, AMD will continue to take away market share from Intel in the personal computing and server markets and that this trend should continue throughout 2023 and end in late 2024 at the earliest.
A recent report from Mercury Research that covered the personal computing market for the first quarter of this year outlined that AMD had managed to secure 27.7% of the market, growing its presence by 2.1% sequentially and 7% annually.
Moving to the graphics processing unit (GPU) industry, Bryson stated that NVIDIA is one of the strongest companies out there, particularly due to its strengths in the Artificial Intelligence (AI) segment. However, he cautioned that the downfall of cryptocurrency mining that has reduced demand for graphics processing units (GPUs) is not fully reflected either in the company's revenue or its share price.
The effect of weakening crypto demand on NVIDIA's outlook is a hot topic, with New Street analyst Pierre Farragu stating in April that he believed that the bulk of the negative effects has already been baked into NVIDIA's share price. The demand destruction for cryptocurrency mining has destabilized the graphics card market, and also led to defective products being sold by the miners.
Intel will benefit from the government subsidies according to the Wedbush analyst, as the company is on an aggressive path to revamping its chip manufacturing. Intel is expanding its facilities in Arizona, and the company has also designed a new capital expenditure plan through which it plans to invest in capacity only when there is market demand for its products. Additionally, the American company also aims at dethroning TSMC from its leading position in the contract chip manufacturing sector, which has seen heavyweights such as the Cupertino, California consumer electronics giant Apple Inc flock to it to procure processors. Apple has also shifted away from Intel's processors for its notebook lineup, choosing to equip the laptops with custom chips that are also manufactured by TSMC.