An Undeserved Penalty for AMD
AMD stocks have
lost 50% since January 2022 despite elevated demand for semiconductors from
data centers and the car manufacturing industry. The major concern of investors
was prompted by a statement by the company’s rival Intel that the demand for
personal computers is contracting. Intel has lower prices than Alder Lake
processors and suspended any recruitments for its production facilities. The
company has stopped the construction of new factories as U.S. Congress voted
against contributing to the project’s finances. The U.S. Administration had
planned to co-fund the project by putting in 30% of $10 billion needed for this
project.
How will all
this affect AMD? It won’t in anyway. The company continues to hire new
employees, and its major market is not personal computers but expensive server
equipment. This segment was mostly unaffected by the COVID pandemic. The
company had a share of 9% in the segment before the pandemic and it has been increased
to 12% in 2022. AMD also increased its share in the smartphone segment to 23%
compared to 18% a year ago.
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