When it comes to chips and microprocessors, Intel and AMD pretty much own the duopoly. So who are the companies that can truly challenge their dominance?
The answer to this question would be both yes and no. For he longest time Intel and AMD have dominated the CPU market with Intel always coming out tops. Sure, there were rivals in the past, but their market share and time in the limelight was limited. Who could forget the Cyrix Corporation and their development of the 286 and 386 microprocessors. In the 1990s it was all about those CPU’s and their successors. With IBM and SGS-Thompson as their main manufacturers, these CPU’s, despite their success – who could forget when the 486 was the workhorse PC to have? – only dominated 10% of the market and would eventually get ousted by Intel and AMD. If market capitalisation is anything to go by, then the Intel and AMD win hands down. As of August of this years, Intel’s market capitalisation is sitting at $213 billion while AMD’s is hovering at a cool $127 billion. Competition between these two companies is rife, but are there actually legitimate competitors to what many would call a duopoly?
A worthy competitor to AMD is Nvidia, a well-established company with a major following amongst gamers and mobile computing enthusiasts. Nvidia is also known for its technological influence in the sector of artificial intelligence and to date is AMD’s biggest competitor as the two operate in the same markets. Nvidia has also managed to forge deals with truly accomplished companies and industry big players such as Telsa, Toyota and Sony, and last September announced its acquisition of Arm Ltd. from Softbank for $40 billion. Outside of being one of the biggest tech deals in recent times, the acquisition also allows Nvidia to compete with both AMD and Intel in the CPU market.
Nvidia made a name for itself through the production of GPUs (graphics processing unit) and then leveraged that credibility into chips for virtual reality, artificial intelligence and an array of other applications. With the introduction of Raytracing technology in 2018, Nvidia’s chips were able to further penetrate the market and are now used in supercomputers, data centres and in the design process of self-driving cars. In the first quarter of this year the company boasted revenue of $5.66 billion comprising of $2.09 billion in revenue from its data centre dealings and $2.76 billion from its gaming sector activities.
Anyone who owns a smartphone has likely heard of the name Qualcomm. The company is a dominant figure in smartphone AP’s (application processors), sporting a robust 30% share of the market. The company has had its share of challenges in recent times; the current global health crises resulted in chip shortages (something Sony also experienced with its PS5) which in turn led to slumped smartphone sales. This act alone had an affect on USD and Euros Forex trading as the smartphone industry accounts for one of the largest tech sectors in the world with total sales to users at the end of Q2 of this year equating well over 320 million units. In addition, due to US/China relations, Qualcomm lost 12% of it’s Huawei market share. Investors got a bit shaky when the company didn’t meet its Q1 earnings. A prediction of $8.27 billion was met with revenue of $8.23 billion. However, this figure still represented a jump of 63% in sales YoY.
For the current quarter Qaulcomm is predicting between $7.2 billion and $8 billion in sales, which is higher than what analysts have predicted. It needs to be noted that these are still very formidable sales and revenue figures and that this lower assessment of profit can be narrowed down to the backlog in semiconductors which in turn has drastically slowed the proliferation of 5G as Qualcomm supplies Apple with its AP’s. Future earnings regarding Apple sure are to change though as Apple plans on eventually severing ties with all external suppliers. However, what’s important to note is that as a business Qualcomm is very likely to capitalise on the 5G industry on the whole and is thus sure to maintain an edge for any upcoming 5G developments.