AMD’s loss of market share to Intel (INTC) and Nvidia (NVDA) in both PC CPUs and graphics processing units (GPU) is getting less bad as the company “executes” better, writes Webster:
We have been cautious on AMD since our downgrade in September of 2011 on execution risk. However, we believe the company‘s roadmap and execution are stabilizing and the risk of share loss is becoming less, particularly in graphics chips, but also in microprocessors. We estimate market share should be stable in both areas in the coming year.
At the same time, Webster has very low expectations for the PC market this year as it affects both AMD and Intel, but given a deficit in CPU inventory in Q4 of 3.9%, a big swing from a 4.7% surplus in Q3, he thinks the two will do just fine even if there’s a 5% drop in PC shipments this year, which is actually worse than the 1.3% decline IDC last week projected:
We further estimate our current unit forecasts for AMD and INTC can accommodate a 4.8% YoY decline in PCs in CY13 due to the significant inventory burn coming into the year. Hence, any upside to a down 5% year in PCs this year could result in unit upside for INTC and AMD.