A lot of research has been devoted to the impact of Ryzen processors on AMD's financial performance and market share. In the German market, for example, AMD processors, after the release of models with the Zen architecture of the first generation, were able to occupy at least 50-60% of the market, according to the statistics of the popular online store Mindfactory.de. This fact once even received a mention in the official presentation of AMD, and AMD management regularly recalls the retention of Ryzen processors in the top ten most popular processors on the Amazon site at thematic events.
Similar research was recently conducted by one of the Japanese stores, which also showed a significant increase in interest in AMD products in the local market. On a global scale, everything is not so clear, but with the release of 7nm EPYC processors of the Rome generation in the middle of this year, AMD itself expects a significant strengthening of its position in the server segment - up to about 10%, although last year the share of products of this brand accounted for less percent.
Analytical agencies IDC and Gartner in the course of recent research on the global PC market came to the conclusion that in the first quarter of this year, AMD managed to significantly squeeze Intel products in the segment of laptops running the Google Chrome OS operating system. This is due to the continuing shortage of low-cost Intel processors, which are produced using 14-nm technology. The company is more profitable to release products with higher added value, and therefore the Chromebook segment willingly switched to AMD processors. Fortunately, the latter company itself contributed to the appearance on the market of the corresponding models of mobile computers.
AMD and rising margins: the best is behind us?
Both AMD's quarterly reports and the investor presentation contain references to a steady growth in profit margins since the debut of the first generation Ryzen processors. This was facilitated by a competent sequence of expanding the range of Ryzen models in the first year of their presence on the market. First, more expensive processors appeared, then more affordable ones came out. Soon AMD was able to break even, and the increase in the average selling price of processors allowed for a regular increase in the profit margin. For example, following the results of last year, it increased from 34% to 39%.
Accordingly, the company seeks to maintain the course of increasing the rate of profit. True, some experts believe that in the second half of the year this will be mainly due to the expansion of server processors, since the price growth potential for AMD consumer processors is almost exhausted. At the very least, analysts at Susquehanna expect the average selling price of Ryzen processors to drop by 1,9%, from $209 to $207. The growth of the company's revenue in this area will now ensure an increase in the volume of processor sales.
According to , the share of AMD processors in the desktop segment in the first quarter will not exceed 15%, but positive changes are planned for the second half of the year associated with the upcoming debut of 7rd generation Ryzen XNUMXnm processors.
Breakthrough AMD in the notebook segment
In the mobile PC segment, AMD's first-quarter performance was impressive, according to Susquehanna. In just one quarter, the company managed to strengthen its position from 7,8% to 11,7%. In the segment of laptops running Google Chrome OS, AMD's share has grown from almost zero to 8%. At the end of last year, the company occupied no more than 5% of the laptop processor market, this year, while maintaining its positions at around 11,7%, it will be able to increase sales of mobile processors from 8 million to 19 million units, and this is a very impressive increase! Most of the new computers sold now are laptops, so such dynamics in this segment can seriously improve AMD's financial position.
Intel may become a hostage to its pricing policy
IDC and Gartner experts expect that in the first quarter, the demand for ready-made computers worldwide will decrease by 4,6%. If such dynamics continue until the end of the year, then in a shrinking market, Intel will have to resort to the already familiar method of increasing revenue by raising the average selling price. Looking at Intel's 2018 report, it turns out that desktop sales volumes fell by 6%, while the average selling price increased by 11%. In the laptop segment, sales volumes increased by 4%, and the average price increased by 3%.
However, Intel has been trying for years to reduce its dependence on the sale of components for personal computers, and the market for these components continues to shrink, so the company can only maintain normal profits by raising average prices. For example, regularly releasing more and more expensive processor models for gamers and enthusiasts. It is they who continue to demonstrate a stable demand for productive components, while many consumers no longer need a desktop computer or laptop in the era of the spread of smartphones.
The problem is that current Intel products will not be able to demonstrate significant progress in performance in the context of the delay in the release of 10-nm processors until this fall, while AMD may have 7-nm new products with the Zen 2 architecture by the middle of the year. Moreover, Intel has not yet demonstrated clear intentions to transfer desktop processors to 10-nm technology, mentioning only mobile or server processors in this context. In the second half of the year, when the competitor's 7nm processors appear on the market, and the 10nm process technology is not yet in time, Intel will not be in the conditions where it can continue to increase prices for its products.
No change on the graphic front
Analysts say that demand for gaming PCs rose in the first quarter in light of the release of new games. Now about 33% of new desktop computers have a discrete graphics solution. The share of gaming configurations in the desktop segment grew from 20% to 25% over the quarter. It would seem that favorable conditions are being created for AMD in the graphics market, but it is 76% controlled by NVIDIA, so the potential for improving AMD's financial performance in this sense is not very large. Still, the positive dynamics in demand for graphics cards will help the company overcome the effects of the crypto boom, which left GPU developers with large inventories of finished products.
Jefferies experts also improved their forecast for AMD's share price from $30 to $34, citing the ability of the brand's new processors to outcompete competitor's products in the desktop, mobile and server segments. The company is due to report its first quarter results on April 30, the day before its fiftieth anniversary. Perhaps AMD's quarterly statistics will be accompanied by interesting management comments.
Source: 3dnews.ru