AMD (NASDAQ:AMD) and Intel (NASDAQ: INTC) are fierce competitors in a difficult market for chips, but one has a much brighter short-term outlook than the other. While Intel is expecting declines across the board, AMD’s data center business is growing with the introduction of a new chip, and its pandemic-era acquisition of specialty chip-maker Xilinx is also contributing growth.
On Tuesday, AMD said it expected $5.3 billion in sales in the March quarter, which would be a 10% year-over-year decline in sales.
AMD’s PC chip group revenue declined 51% on a year-over-year basis in the fourth quarter. Intel’s declined 36%, but from a larger base.
Overall, AMD CEO Lisa Su said on Tuesday that it expects the total PC market to be down 10% in 2023, but said that AMD actually gained market share in the fourth quarter.
The companies diverge more dramatically when it comes to data center chips.
AMD’s data center business is growing strongly, however, up 42% on an annual basis to $1.7 billion. AMD released its latest data center chips, the fourth-generation Epyc processors, in November. AMD expects its data center business to grow this year while PC chips and graphics processors for gaming decline.
AMD’s data center business faces tough macroeconomic conditions too, but on Tuesday, Su signaled to investors that its gains would come at Intel’s expense.
AMD also had success with its 2020 acquisition of Xilinx, which it bought for $35 billion. Xilinx, which makes processors that perform specialized tasks like encryption or video compression, was the main contributor to $1.4 billion in sales for AMD’s embedded division, an annual increase of 1,868%, according to the company.
AMD shares jumped $4.71, or 6.3%, at Wednesday’s open to $79.86.
