By Kevin Kelleher
May 28, 2019

Of all the bitter rivalries that have stoked competition in Silicon Valley, the longest-running battle belongs to chipmakers Intel and Advanced Micro Devices. At a computer conference in Taiwan this weekend, the tech tug-of-war between the two companies underwent an intriguing twist.

For decades, Intel has typically dominated in the market for the processors that power desktop PCs, with AMD often forced to content itself with second place. The two companies were founded in the late 1960s by former engineers at Fairchild Semiconductor, an early Silicon Valley pioneer. Over the decades, they have clashed in courtrooms as well as the burgeoning market for desktop processors.

On Sunday, AMD CEO Lisa Su took the stage at the Computex computer expo in Taipei to unveil the third generation of the company’s Ryzen microprocessor, which it began developing more than five years ago. Su said the new chips, based on AMD’s Zen architecture, outperformed a comparable processor from Intel by more than 16% in its internal tests. Come July, the new Ryzen chips will sell for $500, half the price of Intel’s competing offerings.

AMD’s innovations have leapfrogged those at Intel in the past, but Sunday’s announcement has some Wall Street analysts anticipating an opportunity for AMD to steal an even bigger share of the market for PC processors.

Ryzen chips have already helped AMD’s CPU market share to jump to 17% last quarter, up from 12% a year earlier (with Intel holding the remaining share), thanks in part to a shortage of CPU processors at Intel. If Ryzen delivers on price and performance as Su promised, it can eat further into Intel’s dominant share.

“This announcement represents the first time AMD has taken the desktop CPU lead process technology and performance lead from Intel in its 50-year history,” Stifel Financial analyst Kevin Cassidy said in a research note Monday. “We expect AMD to accelerate its PC market share gains due to higher performance, lower power usage, lower cost and ease of upgrade.”

Another analyst, Aaron Rakers at Wells Fargo, said Su’s “presentation reinforced our positive thesis” that the Ryzen chips could sustain AMD’s market-share gains through the rest of 2019.

Once markets opened on Tuesday, AMD’s stock surged, closing up 10% at $29.03 a share. Intel, meanwhile, saw its stock fall 2.2% to $43.57 a share. That extends AMD’s outperformance over the past year, during which AMD has risen 117% while Intel has fallen 21%.

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