Intel Is Making Promises, AMD Is Making Progress

Intel announced a lot of nothing. Intel hosted the "Intel Accelerated" event to update the roadmap and strategic goals earlier this week. The biggest news out of the event was 

  1.  rename of the process node;

  2.  update the process node roadmap to catch up to TSMC by 2024 and reclaim process leadership in 2025;

  3.  Announcement of two heavyweight customer wins, Amazon and Qualcomm, for Intel Foundry Service.

The process node renaming was essentially just for better marketing and had no real impact on the business. With the new names, Intel's updated roadmap indicates new node introductions every four quarters going forward. According to the current plan, Intel will reach parity with TSMC by 2024 and retake the process leadership in 2025. Catching up at the leading edge is critical for Intel's foundry business, and the announcement of AWS and Qualcomm as foundry customers seems to have validated Intel's plan. However, a closer look says otherwise.

Amazon will only be using Intel's foundry for packaging. It is a nice win, but it also indicates Amazon has no intention to use Intel for the more critical chip manufacturing job anytime soon. Intel also announced Qualcomm as a leading-edge foundry customer for the Intel 20A node, available in 2024. It's four years out, so naturally, there's a lot of uncertainty. But even with the uncertainty, it is still a significant win for Intel's foundry business if they have secured Qualcomm as a customer. However, when asked about the partnership with Intel on the earnings call later that week, Qualcomm's CEO Christiano Amon provided a very different answer.

"We are evaluating their technology. We don't yet have a specific product plan at this point, but we're pretty excited about Intel entering the space. I think we all determined that semiconductors are important and resilient supply chain is only going to benefit our business."

So what did Intel announced at the event? Some new names for the same products, the same roadmap based on the new names, and two significant customers with no significant businesses. That sounds like a whole of nothing to us.

Could AMD's gross margin be higher than Intel's? While Intel is busy making promises, AMD is taking advantage of its product leadership and improving margin. The company delivered a clean beat-and-raise across the board in the second half. Revenue, margin, and EPS were all very strong for both second-quarter results and third-quarter outlook. The company has raised its 2021 growth target meaningfully for two quarters in a row. It is now looking to grow revenue by over 60% for the year, compared to the 37% target it provided only six months ago. The strong revenue growth is also driving an inflection of the margin, with operating margin reached 24% in the quarter, doubled from a year ago. If the second half plays out as the management expected, AMD's gross margin will reach 50% in the fourth quarter, a 2000bps improvement over Lisa Su's tenure as the CEO. Could we see AMD's gross margin surpassing Intel in the not-so-distant future?

article
Gross Margin Comparison: AND vs. Intel (%)

SEMICONDUCTORS
TECHNOLOGY
ARTIFICIAL INTELLIGENCE
DIGITAL ECONOMY

Esoterica's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. For full disclosures, click here.

Get the most lucid takes on where things are headed

Articles and educational writing for smarter investing.

How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio
How to Build a Three-Fund Portfolio

Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification
Asset Allocation for Diversification

How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles
How to Measure Economic Cycles

What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP
What Is GDP

How we can work together

See Our Solutions

Next

Generation

Investing

©2020, Esoterica Capital LLC (“ESOTERICA”). All content is original and has been researched and produced by ESOTERICA unless otherwise stated. No part of ESOTERICA’s original content may be reproduced in any form, or referred to in any other publication, without the express written permission of ESOTERICA. The content is for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect to any products or services for any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence.



Certain of the statements contained on this website may be statements of future expectations and other forward-looking statements that are based on ESOTERICA's current views and assumptions, and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. All content is subject to change without notice. All statements made regarding companies or securities or other financial information on this site or any sites relating to ESOTERICA are strictly beliefs and points of view held by ESOTERICA or the third party making such statement and are not endorsements by ESOTERICA of any company or security or recommendations by ESOTERICA to buy, sell or hold any security. The content presented does not constitute investment advice, should not be used as the basis for any investment decision, and does not purport to provide any legal, tax or accounting advice. Please remember that there are inherent risks involved with investing in the markets, and your investments may be worth more or less than your initial investment upon redemption. There is no guarantee that ESOTERICA's objectives will be achieved. Further, there is no assurance that any strategies, methods, sectors, or any investment programs herein were or will prove to be profitable, or that any investment recommendations or decisions we make in the future will be profitable for any investor or client. Professional money management is not suitable for all investors. For full disclosures, please go to our Terms & Conditions page.