It will take Intel years to fix its chipmaking process and AMD stands to benefit, analyst says
- As Intel struggles with its chipmaking process, semiconductor company Advanced Micro Devices will continue gaining market share, Wall Street analyst Hans Mosesmann told CNBC on Friday.
- "Make no mistake, Intel is going to have to fix this and it will take many, many, many years," Mosesmann said.
As Intel struggles with its chipmaking process, semiconductor rival Advanced Micro Devices will continue gaining market share, Wall Street analyst Hans Mosesmann told CNBC on Friday.
"Make no mistake, Intel is going to have to fix this and it will take many, many, many years. Their process technology disadvantage, which I think is broken, will take five, six, seven years," Rosenblatt Securities' Mosesmann told "Power Lunch." "I don't think that business model works by them being behind by a year or two in terms of process technology."
Intel has teased the large-scale release of its next-generation 10 nanometer chips for years, promising they'd deliver better performance with lower power usage than chips built with the company's older generation, 14 nanometer technology. Intel said last month that its 10 nanometer chips will be released for holiday 2019.
Samsung is already manufacturing 10 nanometer chips, and AMD plans to launch 7 nanometer products later this year. One nanometer equals one-billionth of a meter.
Meanwhile, AMD's stock has been rising and the company has been gaining market share at Intel's expense, making for a dynamic Mosesmann described as "unprecedented."
In AMD's competition with Intel, "we are at the very, very early stages of a multiyear market share gaining dynamic," Mosesmann said. "I think [AMD has] 1 percent of the market today — they will probably get that 25 percent and then some over the next several years."
For its part, Intel sees big growth ahead, especially from data, artificial intelligence and upcoming products.
"I don't talk to customers about nanometers, what they care about is delivered system-level performance. Our job is to deliver a consistent level of improvements in performance year after year after year," Navin Shenoy, executive vice president of Intel's data center group, said in a statement.
Rosenblatt Securities raised its price target on AMD shares to $30 from $27 on Thursday, citing the chipmaker's process manufacturing advantage versus Intel and Nvidia. The new forecast is 25 percent higher than where AMD shares traded Friday, and is the highest target on Wall Street so far, according to FactSet.
AMD closed up 7.6 percent Friday at $23.98 per share. Intel rose 1.5 percent, to $47.66.