Market Share Warfare: AMD Readies for Battle with NVIDIA and Intel
AMD’s strategy to regain market share
We’ve already discussed how Advanced Micro Devices (AMD) has moved to a FinFET (fin-shaped field effect transistor) process to catch up with Intel (INTC). But another major challenge for AMD will be regaining the market share it lost to NVIDIA (NVDA) due to how slow it was in launching product updates and offering a complete suite of competitive products in 2015. AMD has thus implemented a long-term technology roadmap and is now ready to launch some revolutionary products in 2016.
Competitive products
In the gaming business, AMD has started launching a complete suite of highly competitive products. AMD’s Radeon R9 Fury X competes with Nvidia GeForce GTX 980 Ti. The Radeon R9 Fury X launch already saw AMD regain some of its lost share in the discrete GPU (graphic processing units) market in 3Q15. According to Jon Peddie Research, AMD’s share rose from 18.0% in 2Q15 to 18.8% in 3Q15, while Nvidia’s share fell from 81.9% to 81.1% during the same period.
In February and March 2016, AMD launched software and API (application program interface) support in the form of Radeon Software Crimson Edition 16.3.2 and Vulkan graphics API.
These new launches secured AMD several design wins and helped it become selected as the exclusive supplier of discrete GPUs for Apple’s (AAPL) consumer and professional computer lineup. Also, AMD PRO Series commercial APUs will be used in HP’s (HPQ) latest EliteBook commercial client system.
R&D spending
AMD still has limited funds for R&D (research and development), given its low cash reserves, high debt, and continued losses. The cash-strapped company has thus undergone significant restructuring to reduce losses and inject more cash into the business. Notably, the iShares S&P 500 Growth ETF (IVW) has ~3% exposure to semiconductors and ~6.6% to computers. It has 6.5% exposure to AAPL and 0.68% to INTC.
At this trivial time, the company has to spend wisely and prioritize technology that can generate maximum returns. We’ll look AMD’s technology priorities in the next part.
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