Intel’s Q1 earnings report was a good indicator of how well the semiconductor industry has been doing despite the shortages that have affected nearly every sector over the last few months. As per BoA analysts, AMD could see a yearly revenue increase of as much as 37% for the FY2021 if all goes well. Compared to the chipmaker’s growth in 2020, that’s nearly a 2x increase. (Excluding the game console market, AMD saw a yearly revenue of 20% in 2020)
The analysts believe that AMD’s growth rate will not only outpace Intel but the entire chipmaking industry, as evident from the previous year’s revenue reports. However, this will largely depend on how much foundry capacity the chipmaker can negotiate with TSMC. Lately, the semiconductor shortages have affected every sphere of the industry, and although, till now, profits of just about every firm have mostly increased, it’s going to be a bottleneck if the current situation continues (which it likely will).
Luckily for AMD, it is TSMC’s largest client next to Apple which is already a node ahead. This means that Team Red has to mostly compete with MediaTek and Qualcomm for 7nm and in the future, 5nm capacity. AMD’s share price is expected to rise to $100 by the end of this year, possibly even sooner if the quarterly earnings for Q1 and Q2 turn out to be positive enough.
AMD’s primary competitor in the graphics market, NVIDIA is also one of the fastest-growing semiconductor companies. However, the Arm acquisition may severely dampen the stock growth rate if the deal is rejected by regulation authorities. The recent anti-trust investigation into the deal by British authorities is going to be one of the deciding factors in this regard.
