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Intel, AMD Say They're Operating Near Capacity Despite Coronavirus Disruptions

Intel, AMD Say They're Operating Near Capacity Despite Coronavirus Disruptions

Even as the sell-side debates the extent of the damage the COVID-19 pandemic will inflict on chipmakers, Intel Corporation (NASDAQ: INTC) and Advanced Micro Devices, Inc. (NASDAQ: AMD) appear to be going strong in the face of the adversity.

AMD, Intel Say Supply To Keep Pace With Rising Demand

AMD and Intel have said they are geared to meet the increasing processing power needs triggered by the pandemic.

With the onset of the COVID-19 in China late last year and its subsequent global spread, many people have opted to or have been forced to stay indoors and work or learn remotely to contain the virus. 

This has put a huge strain on network infrastructure and in turn on servers used in data center, according to Tom's Hardware.

It goes without saying that demand for the chips that power these devices could rise proportionately. 

Intel, AMD Working Full Throttle

Intel has sought to allay concerns about a potential chip shortage, especially those used in servers and networking equipment.

"Intel factories around the world continue to operate on a relatively normal basis," CEO Bob Swan said in a March 19 letter to customers and partners.

While noting there has been a historic deployment of remote work and digital access to services across every domain, including medicine, education, government and entertainment, Swan said Intel is providing tools and services such as AI and high-performance computing, robots and technology solutions for virtual learning for these evolving needs.

Swan acknowledged the commitment of the company's team to sustain its manufacturing, assembly, test and supply chain operations.

"They are working hard to make sure you can continue to be successful while sustaining a rate of on-time delivery currently greater than 90%," the CEO said.

AMD relayed a similar message.

AMD is working to maintain business continuity by mitigating the impact on the company's global operations, and also taking steps to assure the safety of its employees during the outbreak, CEO Lisa Su said in a letter to customers last week.

Demand Tilting Toward Server Chips

Remote working and virtual learning needs have increased bandwidth for video, while resources for collaborative services such as Slack and Zoom Video Communications Inc (NASDAQ: ZM) require a higher level of computing, according to Tom's Hardware.

"That means there will likely be an increased need for critical infrastructure, such as servers," the report said.

Therefore, AMD and Intel may be forced to divert resources to manufacturing server processors and away from client processors.

At last check, AMD shares were rising 3.53% to $41.01 and Intel shares were up 5.87% at $48.52.

Related Links:

AMD Approaching Levels That Present More Balanced Risk-Reward, Analyst Says

Why AMD's Coronavirus Impact Could Be Worse Than Intel, Nvidia


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