Intel CEO Comments On Giving Up Market Share To AMD

One of Advanced Micro Devices, Inc.'s AMD main drivers for the back half is the company's planned EPYC server growth. If this analyst's conversation with Intel Corporation's INTC CEO was correct, Intel hinted to giving up more market share than AMD guided they'd take. Tell me that's not huge.

CNBC reported that a Nomura Instinet analyst met with Intel's CEO Brian Krzanich. Intel apparently told this analyst something to the effect that "it was Intel's job to not let AMD capture 15 to 20 percent market share [in servers]." He was referring to the second half of 2018.

Did you just catch that?

AMD's CEO Dr. Lisa Su said on last earnings call, "We remain focused on achieving mid-single-digit server unit share by the end of 2018."

To clarify, "mid-single-digit" means, to pick a round number, 5 percent.

You don't have to be a rocket scientist to see that there is a huge gap between the "tiny" AMD guide of 5 percent and just below the low-end 15 percent share that Intel implied they are ok giving up.

My point is they're not willing to give up 15 to 20 percent share. But 14 percent they are?

We checked in with Intel and they said the CEO's answer needs to be understood in context of the question. The CEO was specifically asked by the analyst something to the effect "would they give up 15 to 20 percent market share to AMD" and the CEO's answer above was to that question. So the answer was not as bad as the media made it out to be. 

My take, though, is still that the answer you'd want to hear is something like "we're not ceding any share."

Maybe AMD's guide is a touch conservative?

We've been writing that our EPS numbers have been way above the Street. Consensus estimates are at $0.45 for this year. Our earnings model shows simple math getting us closer to $0.73.

Our numbers are not assuming EPYC crushes it. But with Intel letting market share go our numbers could be low.

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