AMD gained market share in the years up to early 2023 mainly because its Zen CPUs became competitive with, and often faster than, Intel's at a lower price, while its fabless partnership with TSMC gave it earlier access to leading manufacturing nodes. Chiplet designs, a strong server roadmap with EPYC, console and cloud partnerships, and good reviews did the rest. The gains were largest in servers and desktop CPUs; in discrete PC graphics NVIDIA kept a large lead.
This post was written in February 2023 and describes the position at that time. The ten reasons below keep the original points and add the context behind them.
Key takeaways
- The Zen architecture, launched in 2017, closed the performance gap with Intel and then moved ahead in core count and efficiency.
- AMD is fabless. Its 7nm and 5nm products are made by TSMC, which was ahead of Intel's own process schedule in 2019 to 2022.
- Chiplets let AMD build high core counts with good yield and lower cost.
- Servers were the biggest share story: EPYC grew from a very small base in 2017 to a substantial share of x86 server units by late 2022.
- Pandemic PC demand helped in 2020 and 2021, but the PC market fell sharply in 2022, so that tailwind had reversed by the time of writing.
The ten reasons
1. Highly competitive products
AMD has been releasing highly competitive products in recent years that have been gaining market share. It has offered high-performance CPUs and GPUs that can rival or outperform their counterparts from Intel and NVIDIA. The turning point was the Zen core in 2017 (first Ryzen desktop and EPYC server parts), followed by Zen 2 in 2019, Zen 3 in 2020 and Zen 4 in 2022. Each generation brought large gains in instructions per clock and core count.
2. Better value for money
AMD has offered its products at a lower price point than its competitors. This has made them more attractive to customers looking for value for money. In servers, value is measured as performance per dollar and per watt across a rack, and high core counts let customers consolidate workloads onto fewer machines, which reduces software licensing, power and floor space.
3. A stronger brand reputation
AMD has built a positive brand reputation in recent years, which has helped it gain the trust of consumers and enterprise buyers. It is now known for quality products that are reliable and perform well. For server buyers, a predictable roadmap that is delivered on time matters as much as raw performance, and AMD's on-time EPYC generations built that confidence.
4. Consistent innovation
AMD has been consistently innovating and introducing new technologies that have set it apart from its competitors. A correction to the original version of this post: AMD did not introduce the first 7nm manufacturing process. AMD designs chips and TSMC manufactures them. What AMD did introduce were among the first high-performance products on TSMC's 7nm process: the Radeon Instinct MI50 and MI60 data centre GPUs announced in late 2018, and then the Ryzen 3000 desktop CPUs and second-generation EPYC (Rome) server CPUs in 2019, the first 7nm x86 processors. These allowed AMD to offer higher performance while using less power. Other notable innovations include:
- Chiplets: splitting a processor into several small compute dies and a separate I/O die, so that each die yields well and the I/O die can use an older, cheaper node.
- 3D V-Cache: stacking extra cache on top of the compute die, first in the Ryzen 7 5800X3D in 2022, which gave a large uplift in many games.
5. The TSMC partnership and Intel's process delays
Being fabless lets AMD use whichever foundry is ahead. Intel, which makes its own chips, had well-publicised delays with its 10nm process and announced in July 2020 a further delay to its 7nm process. In that period TSMC's 7nm and 5nm nodes gave AMD a density and efficiency advantage that design alone could not have delivered.
6. Pandemic-driven PC demand
The COVID-19 pandemic led to increased demand for PCs and other computer products. AMD capitalised on this by offering products that met the needs of people working and learning from home. This tailwind did not last: industry trackers such as IDC reported that worldwide PC shipments fell by around 16 percent in 2022, so by early 2023 the PC market was shrinking and AMD's share gains there were happening in a smaller market.
7. Partnerships with major technology companies
AMD has formed partnerships with major players in the technology industry, such as Microsoft, to offer products optimised for their software. This has helped it gain share in areas such as gaming and data centres. Custom AMD chips power both the Microsoft Xbox Series X and S and the Sony PlayStation 5, launched in 2020, and the major cloud providers offer EPYC-based instances. In discrete PC graphics cards, however, NVIDIA kept a large majority of the market, so the gaming gains came mainly through consoles and CPUs.
8. Expansion into servers and new segments
AMD has expanded into new market segments, such as servers, where it has gained market share from Intel. Mercury Research, which tracks x86 shipments, reported AMD's server unit share rising from around 1 percent in 2017 to the high teens by late 2022. AMD also broadened its portfolio through acquisitions: Xilinx (FPGAs and adaptive SoCs), completed in February 2022, and Pensando (data centre networking processors), completed in 2022.
9. Positive reviews
AMD's products have received positive reviews from technology reviewers and consumers, which has helped to build momentum for the brand. In the enthusiast PC market, independent reviews have a strong influence on what people buy and recommend to others.
10. Sustainability and customer focus
AMD has also made a commitment to sustainability, which resonates with customers looking for environmentally friendly products. In 2021 it set a public goal to improve the energy efficiency of its processors and accelerators in AI training and high-performance computing nodes by 30 times between 2020 and 2025. AMD has also focused on meeting the needs of its customers and offering products tailored to them, which has helped it build a loyal customer base that drives its market share growth.
Summary table
| Reason | Main segment affected | Type of advantage |
|---|---|---|
| Zen CPU performance | Desktop, laptop, server | Product |
| Price and value | All | Commercial |
| Brand reputation | Consumer and enterprise | Market perception |
| Chiplets, 7nm products, 3D V-Cache | Server, desktop | Technology |
| TSMC partnership | All | Manufacturing access |
| Pandemic PC demand | Desktop, laptop | Market timing (reversed in 2022) |
| Console and cloud partnerships | Gaming, data centre | Ecosystem |
| Server expansion and acquisitions | Data centre, embedded | Portfolio |
| Positive reviews | Consumer | Market perception |
| Sustainability and customer focus | Enterprise, data centre | Commercial |
What could slow the gains
- Intel's recovery plan, with a faster process cadence and new server generations, aims directly at the segments where AMD gained most.
- Dependence on TSMC means AMD shares capacity, and supply-chain risk, with the rest of the industry.
- In AI accelerators NVIDIA's lead in both hardware and software ecosystem is large, and data centre spending was shifting towards AI.
- Arm-based server CPUs from cloud providers and others compete for the same data centre sockets.
Frequently asked questions
Does AMD manufacture its own chips?
No. AMD sold its manufacturing operations, which became GlobalFoundries, in 2009. Its leading-edge products are made by TSMC.
Where did AMD gain the most share?
In x86 server CPUs, where it started from a very small base in 2017. Desktop and laptop CPU share also rose over the same period, with quarter-to-quarter swings.
Was AMD gaining share from NVIDIA in graphics?
Not in discrete PC graphics cards, where NVIDIA held a large majority. AMD's graphics strength in this period was in game consoles and integrated graphics.
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