According to investment bank KeyBanc, Intel is on track to reclaim significant CPU market share in the client PC space from AMD, courtesy of its Alder Lake portfolio. The research also includes server numbers, indicating that AMD’s EPYC CPUs could see large double-digit improvements shortly.
Intel is divesting non-essential businesses to pay these costly ambitions. One such move is Intel’s memory unit’s sale to SK Hynix of South Korea, which received regulatory approval near the end of 2021. These attempts are part of a larger push by the chip manufacturing industry to establish facilities in the US.
The rest of 2022 will be stable for both the desktop and notebook PC segments, as sales of PC notebooks continue to improve and component shortages begin to alleviate.
It’s also been stated that reception for Intel’s 12th Gen Alder Lake processors has been surprisingly positive, with over a 50% performance boost over Tiger Lake chips and only a 10% price increase over the previous lineup. As a result, notebook manufacturers consider Intel CPUs to be far superior to AMD’s Ryzen 6000 Rembrandt family, and ODM partners expect Intel to reclaim considerable market share across both desktop and notebook platforms.
Going until 2022, the market share split is likely to stay constant, with Intel capturing 85 percent and AMD claiming roughly 15 percent. ABF substrate supply limitations impacted AMD as well, and the company is said to be prioritizing share gains in servers and PC laptops over the desktop PC segment. That could also explain why the lone SKU for the future 3D V-Cache parts is the Ryzen 7 5800X3D.
PC NB shipments improve, as component shortages begin to ease, while the outlook for 2022 is seen as stable. Supply dynamics for PC NB are improving in 4Q, with total PC NB unit shipments of +6% q/q vs. -1% q/q prior. The upside to prior expectations is being driven by improving component supply on PMIC, audio codec, and IO switches. In 1Q22, we believe PC NB shipments will likely be down 7% q/q, as normal seasonality of -10% to -15% q/q is offset by easing supply shortages. Looking into 2022, NB unit shipments are expected to be flat, with enterprise demand recovering, Chromebook down, while Consumer is expected to be stable. For 2022, we expect PC NB unit shipments to be flat, driven by higher commercial NB shipments, offset by lower Chromebook demand, while the mainstream consumer is expected to be stable.
Feedback on Intel’s next-generation Alder Lake CPU has been much better than expected. Feedback from ODMs indicates the performance of Alder Lake has been much better than expected with performance +50% vs. Intel’s prior generation Tiger Lake. Additionally, the pricing of Alder Lake is only expected to be 10% higher than Tiger Lake. Alder Lake’s performance is also viewed as superior, as compared to AMD’s recently announced Ryzen 6000 CPU. ODM partners are expecting that INTC will be able to regain significant market share in desktop PCs vs. AMD.
Expect the 2022 PC market share between AMD and INTC to remain stable. We expect PC market share
between AMD and INTC to remain relatively stable in 2022 with INTC share expected to be 79-80% and AMD share expected to be 20-21%. With the improved performance of INTC’s Alder Lake, we expect INTC to regain market share in desktop PCs with shares expected to increase from 77-78% in 2021 to 85% in 2022. We expect this to be offset by continued share gains by AMD in Consumer PC NBs, with shares expected to increase from 23% in 2021 to 28-30% in 2022. With AMD remaining supply-constrained particularly in ABF substrate, we believe the Company is prioritizing share gains in servers and PC NB vs. desktop
via KeyBanc Report
Moving on to the server/datacenter area, it’s been claimed that cloud server demand is still high, with a 10% increase projected in 2022 as component shortages subside. The Sapphire Rapids-SP Xeon range from Intel is slated to be officially launched by late Q3 2022, although meaningful volume won’t start delivering until Q4 2022.
At the same time, AMD’s Milan-X portfolio is now shipping, and the company is planning to launch its Genoa chips in Q4 2022, with major production beginning in Q1 2023. Although there will be a minor delay, most consumers are expected to wait for the next-generation EPYC rather than Intel’s Xeon series. By the end of 2022, AMD’s EPYC market share will have surpassed 20%, notably in the cloud category.
Cloud server demand is strengthening, as component shortages ease; we expect 10% server growth in 2022. Overall cloud demand remains very strong, as component shortages associated with PMICs are easing, while enterprise demand remains stable and returns to y/y growth in 4Q21. Our 4Q21 unit shipment estimate of 3.53M (+3% q/q) remains unchanged despite strengthening demand in the cloud given supply tightness, as these orders are expected to be fulfilled in 1Q22. For 1Q22, we estimate server unit shipments of 3.59M (+2% q/q). For 2022, we expect server shipments to grow 10% (cloud +17-19%, enterprise +5%) led by continued strength in cloud, with enterprise expected to continue to strengthen, which is up from +5% in 2021 (cloud +25%, enterprise -9%).
Expect AMD server market share to increase to over 20% this year. Feedback from the server supply chain indicates that AMD’s market share reached 11-12% in 2021 and will this year reach 20%, particularly at cloud providers Facebook and at Microsoft Azure. In our November cloud instance tracker, we observed an inflection in new AMD instances (link to November cloud instance tracker note) and expect this momentum to continue. We also see a significant runway for AMD to grow market share at Facebook, as the Company’s share is still relatively low at an LSD percentage.
Mass production for Intel’s Sapphire Rapids is expected to start in 4Q22. Last quarter, we indicated Intel’s Sapphire Rapids server CPU would be launched in 2Q22 (link to last quarter’s Asia note) but that mass production would be delayed until 4Q22. At this point, the timing of this delayed launch is widely expected among ODMs and the server supply chain. However, we believe Intel is officially delaying its launch from 2Q22 to 3Q22. Extra time needed for performance tuning related to excess heat dissipation related to PCIe gen 5 remains the main reason behind the delay.
AMD’s Genoa is still expected to launch in 4Q22. We maintain that AMD’s next-generation server CPU will be launched around the end of 2022 with mass production expected in 1Q23. This is delayed from the original launch date of mid-2022.
via KeyBanc Report
NVIDIA earned the most contracts for new instances in December, with nine new regions across CSPs powered by its AI accelerators, Intel got new regions at AWS and Alibaba, while AMD received no new regions. That could change in the coming months when AMD pushes its EPYC CPUs to cloud operators. In November 2021, AMD saw an increase in the number of new instances deployed, however, this has since been reduced to +1 percent (m/m). NVIDIA’s AI accelerators experienced significant adoption, with Ampere and Maxwell leading the way with year-over-year increases of +676 percent and +63 percent, respectively.
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