With Intel Corporation (Nasdaq: INTC) stock down 1 percent in 2018 and Advanced Micro Devices (AMD) stock up more than 200 percent year-to-date, the market impact of Intel’s 10 nanometer chip delays is clear. But while Intel finds itself at a process disadvantage in the near term, some analysts say it’s only a matter of time before Intel regains its technology edge.
According to Morgan Stanley analyst Joseph Moore, Intel has pushed a narrative in recent years that its process technology would continue to differentiate its products from those of competitors like AMD. However, multiple delays in the launch of Intel’s 10nm chips have forced Intel customers to consider switching to AMD’s 7nm chips. In recent years, AMD has held only about 1 percent market share of the CPU market that Intel has dominated, but analysts are already expecting Intel’s 10nm chip issues to result in a meaningful shift in market share.
Fortunately for Intel investors, Moore says that market share is certainly not gone for good.
“We do see Intel successfully defending its turf over the long haul, maintaining fairly high market segment share in all CPU segments and adopting the innovation of multichip modules, albeit with some potential pressures to pricing and small share loss,” Moore says.
He says Intel’s hiccups are a far cry from its downfall in the CPU market.
“While delays are disruptive, the lasting impact is also being overstated,” he says.
In its most recent earnings call, Intel said it expects its 10nm chips to be available by the holiday season in 2019. In the meantime, investors will be watching to see just how much damage AMD can do with its window of opportunity and how long it will take Intel to right the ship.
Rosenblatt Securities analyst Hans Mosesmann says AMD will gain at least 25 percent of CPU market share over the next several years.
“Make no mistake, Intel is going to have to fix this, and it will take many, many, many years,” Mosesmann says. “Their process technology disadvantage, which I think is broken, will…
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