As the global semiconductor industry becomes increasingly competitive, AMD's market share continues to expand, especially in the server and high-end workstation markets. At the same time, Intel is facing multiple challenges such as innovation bottlenecks, declining market share, and financial pressures. In such a market environment, whether the "customized strategy" proposed by Intel's new CEO Chen Liwu can help the company reverse the decline has become the focus of attention in the industry.
1. AMD's Market Share Growth: From Challenger to Industry Leader
According to the latest data released by Mercury Research, in the fourth quarter of 2024, AMD's overall share of the x86 processor market reached 25.1%, up 2 percentage points year-over-year and 0.9 percentage points quarter-on-quarter. Among them, the server market has become a key engine for AMD's growth, and in the field of data center processors, the EPYC series continues to seize the market with high core count, strong energy efficiency and more competitive price/performance. The desktop and notebook markets also performed well, with AMD's share increasing to 27.1% and 23.7%, respectively.
In the high-end workstation market, AMD's Threadripper series processors accounted for 90% of sales in the fourth quarter of 2024, while Intel's market share dropped to less than 20%. This comparison fully demonstrates AMD's technological advantages in the field of high-performance computing (HPC).
At the same time, AMD's strategic layout in the field of artificial intelligence (AI) computing is also steadily advancing. Its Instinct MI300 accelerator card is becoming increasingly competitive in the AI inference and training market, laying the foundation for AMD to win cloud and enterprise customers.
2. Intel's dilemma: lagging innovation and losing market share
While Intel still dominates the consumer CPU market, its dominance in the server and high-end computing markets is eroding. In the fourth quarter of 2024, Intel's revenue share in the server market fell to its lowest point in 13 years, while AMD's data center business revenue increased by more than 40% year-over-year, further eroding Intel's market position.
Intel's relatively lagging pace of innovation is also one of the key challenges. The delay of 10nm and 7nm process technology has caused Intel to lose the competitive opportunity in the high-performance computing market. Although its Meteor Lake architecture attempts to introduce new packaging technologies and AI acceleration capabilities, it still fails to fully surpass AMD Zen 4 and the upcoming Zen 5 architecture in terms of overall performance and power consumption.
In addition, Intel's financial position continues to be under pressure. Since 2021, the company's revenue has fallen by more than 30%. In the AI computing market, NVIDIA continues to expand its market dominance by virtue of the leading edge of the CUDA ecosystem and Hopper architecture GPUs, and AMD also relies on MI300 accelerator cards to gradually encroach on Intel's share. Against this backdrop, Intel urgently needs a new strategy to regain market initiative.
Figure: Can Intel's customization strategy be reversed?
3. Intel's Customized Strategy: Can It Be the Key to a Turnaround?
In the face of the continuous decline in market share and fierce competition in the field of AI computing, Intel's new CEO Chen Liwu proposed a "customized strategy". (Customer-Specific Silicon Strategy), which aims to meet the needs of different application scenarios by tailoring chips for specific customers. At the heart of this strategy is that Intel is no longer relying solely on standardized products, but is developing customized semiconductor solutions through deep collaboration with hyperscalers, cloud service providers, and enterprise customers.
The strategy was based on the following considerations:
Responding to market differentiation: Unlike traditional general-purpose CPUs, enterprise customers (such as AWS, Google Cloud, and Microsoft Azure) have different requirements for computing performance, energy optimization, and specific workloads.
Increased product value: Custom chips typically have higher profit margins than general-purpose processors, helping Intel maintain profitability in a highly competitive market.
Enhance customer stickiness: By working deeply with key customers, Intel can lock in long-term relationships and reduce the likelihood of customers moving to competitors such as AMD or NVIDIA.
However, the success of a customized strategy does not happen overnight, and it faces several key challenges:
R&D cost and timeline: The development of custom chips requires a significant investment of resources, including upfront design, optimization, and production processes, and Intel's current financial position may affect its ability to execute.
Competitors' technical advantages: AMD's technology accumulation in the high-performance computing market also enables it to have strong customization capabilities. In recent years, AMD has leveraged the advantages of its chiplet architecture to provide customers with more flexible solutions.
Supply chain integration capabilities: Intel is still advancing its Intel Foundry Services (IFS) business in an attempt to challenge TSMC's position in the advanced process foundry market, but Intel's current lag in process technology puts it at a disadvantage when negotiating with customers.
4. Future challenges and prospects
The success of Intel's customization strategy depends on its ability to quickly close the technology and ecosystem gap with AMD and NVIDIA, and improve its supply chain management capabilities. Several key challenges ahead include:
Competition for advanced process nodes: Whether Intel's Intel 3 and Intel 20A processes can be mass-produced on schedule and catch up with TSMC in terms of yield, power consumption and cost are important factor that determines the competitiveness of its chips.
Breakthrough in the AI computing market: In the AI chip market, NVIDIA's CUDA ecosystem is still dominant, while AMD's ROCm ecosystem is gradually improving. The market acceptance of Intel's Gaudi AI accelerator and Ponte Vecchio GPUs is still to be verified.
Supply chain and foundry business challenges: Intel hopes to attract more external customers through IFS, but it is still in the construction stage, and its capacity and cost control capabilities will directly affect its competitiveness in the foundry market.
At the same time, AMD's market expansion has not been without resistance. Intel's counterattack strategy may curb AMD's growth rate to some extent. In addition, the penetration of ARM-based processors in the data center and high-performance computing markets may also have an impact on the x86 ecosystem.
5. Conclusion
With AMD's market share exceeding 25%, Intel's customization strategy undoubtedly provides a new growth path for it. However, the success or failure of this strategy still depends on many factors such as technological innovation, marketing and resource integration. In the next few years, Intel needs to accelerate the research and development of advanced processes, optimize the custom chip business, and find new breakthroughs in the AI computing market.
Whether Intel can regain market leadership with a customized strategy remains an open question. Regardless of the final outcome, this competition will undoubtedly profoundly affect the global semiconductor industry landscape and determine the technology route of the future data center, high-performance computing and AI markets.
