How AMD became a chip giant and leapfrogged Intel after years of playing catch-up
Advanced Micro Devices made history this year when it surpassed Intel by market cap for the first time ever. Intel has long held the lead in the market for computer processors, but AMD’s ascent results from the company branching out into entirely new sectors.
In one of the biggest semiconductor acquisitions in history, AMD purchased adaptive chip company Xilinx in February for $49 billion. Now, AMD chips are in two Tesla models, NASA’s Mars Perseverance land rover, 5G cell towers and the world’s fastest supercomputer.
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“AMD is beating Intel on all the metrics that matter, and until and unless Intel can fix its manufacturing, find some new way to manufacture things, they will continue to do that,” said Jay Goldberg, semiconductor consultant at D2D Advisory.
But a decade ago, analysts had a very different outlook for AMD.
“It was almost a joke, right? Because for decades they had these incredible performance problems,” Goldberg said. “And that’s changed.”
CNBC sat down with AMD CEO Lisa Su to hear about her company’s remarkable comeback, and huge bets on new types of chips in the face of a PC slump, fresh restrictions on exports to China and shifting industry trends.
‘Real men have fabs’
AMD was founded in 1969 by eight men, chief among them Jerry Sanders. The famously colorful marketing executive had recently left Fairchild Semiconductor, which shares credit for the invention of the integrated circuit.
“He was one of the best salesmen that Silicon Valley had ever seen,” said Stacy Rasgon, semiconductor analyst at Bernstein Research. “Stories of lavish parties that they would throw. And there’s one story about him and his wife coming down the stairs of the turret at the party in matching fur coats.”
AMD Co-Founder Jerry Sanders poses at the original headquarters of Advanced Micro Devices, or AMD, in Sunnyvale, California, in 1969
AMD
He also coined an infamous phrase about chip fabrication plants, or fabs.
“Jerry Sanders was very famous for saying, ‘Real men have fabs,’ which obviously is a comment that is problematic on a number of levels and has largely been disproven by history,” Goldberg said.
As technology advances, making chips has become prohibitively expensive. It now takes billions of dollars and several years to build a fab. AMD now designs and tests chips and has no fabs.
“When you think about what do you need to do to be world class and design, it’s a certain set of skills,” Su said. “And then what do you need to do to be world class In manufacturing? It’s a different set of skills and the business model is different, the capital model is different.”
Back in the ’70s, AMD was pumping out computer chips. By the ’80s, it was a second-source supplier for Intel. After AMD and Intel parted ways, AMD reverse engineered Intel’s chips to make its own products that were compatible with Intel’s groundbreaking x86 software. Intel sued AMD, but a settlement in 1995 gave AMD the right to continue designing x86 chips, making personal computer pricing more competitive for end consumers.
In 2006, AMD bought major fabless chip company ATI for $5.4 billion. Then in 2009, AMD broke off its manufacturing arm altogether, forming GlobalFoundries.
“That’s when their execution really started to take off because they no longer had to worry about the foundry side of things,” Goldberg said.
GlobalFoundries went public in 2021 and remains a top maker of the less advanced chips found in simpler components like a car’s anti-lock brakes or heads-up display. But it stopped making leading-edge chips in 2018. For those, AMD turned to Taiwan Semiconductor Manufacturing Co., which now makes all of AMD’s most advanced chips.
Catching Intel
AMD only has major competition from two other companies when it comes to designing the most advanced microprocessors: Nvidia in graphics processing units, GPUs, and Intel in central processing units, CPUs.
While AMD controls far less GPU and CPU market share than Nvidia and Intel, respectively, it’s made remarkable strides since moving away from manufacturing and reducing capital expenditure.
Meanwhile, Intel doubled down on manufacturing last year, committing $20 billion for new fabs in Arizona and up to $100 billion in Ohio, for what it says will be the world’s largest chip-making complex. But the projects are still years away from coming online.
“Intel is just not moving forward fast enough,” Goldberg said. “They’ve said they expect to continue to lose share in next year and I think we’ll see that on the client side. And that’s helped out AMD tremendously on the data center side.”
AMD’s Zen line of CPUs, first released in 2017, is often seen as the key to the company’s recent success. Su told CNBC it’s her favorite product. It’s also what analysts say saved AMD from near bankruptcy.
“They were like literally, like probably six months away from the edge and somehow they pulled out of it,” Rasgon said. “They have this Hail Mary on this new product design that they’re still selling like later generations of today, they call it Zen is their name for it. And it worked. It had a massively improved performance and enabled them to stem the share losses and ultimately turn them around.”
AMD CEO Lisa Su shows the newly released Genoa CPU, the company’s 4th generation EPYC processor, to CNBC’s Katie Tarasov at AMD’s headquarters in Santa Clara, California, on November 8, 2022
Jeniece Pettitt
Among the Zen products, AMD’s EPYC family of CPUs made monumental leaps on the data center side. Its latest, Genoa, was released earlier this month. AMD’s data center customers include Amazon Web Services, Google Cloud, Oracle, IBM and Microsoft Azure.
“If you looked at our business five years ago, we were probably more than 80% – 90% in the consumer markets and very PC-centric and gaming-centric,” Su said. “As I thought about what we wanted for the strategy of the company, we believed that for high-performance computing, really the data center was the most strategic piece of the business.”
AMD’s revenue more than tripled between 2017 and 2021, growing from $5.3 billion to over $16 billion. Intel’s annual revenue over that stretched, meanwhile, increased about 25% from close to $63 billion in 2017 to $79 billion last year.
Geopolitical concerns and PC slump
AMD’s success at catching up to Intel’s technological advances is something many attribute to Su, who took over as CEO in 2014. AMD has more than tripled its employee count since then. Su was Fortune’s #2 Business Person of the Year in 2020 and the recipient of three of the semiconductor industry’s top honors. She also serves on President Joe Biden’s Council of Advisors on Science on Technology, which pushed hard for the recent passage of the CHIPS Act. It sets aside $52 billion for U.S. companies to manufacture chips domestically instead of overseas.
“It’s a recognition of just how important semiconductors are to both economic prosperity as well as national security in the United States,” Su said.
With all the world’s most advanced semiconductors currently made in Asia, the chip shortage highlighted the problems of overseas dependency, especially amid continued tension between China and Taiwan. Now, TSMC is building a $12 billion 5-nanometer chip fab outside Phoenix.
“We’re pleased with the expansion in Arizona,” Su said. “We think that’s a great thing and we’d like to see it expand even more.”
Earlier this month, the Biden administration enacted big new bans on semiconductor exports to China. AMD has about 3,000 employees in China and 25% of its sales were to China last year. But Su says the revenue impact has been “very small.”
“When we look at the most recent regulations, they’re not significantly impacting our business,” Su said. “It does affect some of our highest-end chips that are used in sort of AI applications. And we were not selling those into China.”
What is hurting AMD’s revenue, at least for now, is the PC slump. In its third-quarter earnings report earlier this month, AMD missed expectations, shortly after Intel warned of a soft fourth quarter. PC shipments were down nearly 20% in the third quarter, the steepest decline in more than 20 years.
“It’s down a bit more than perhaps we expected,” Su said. “There is a cycle of correction which happens from time to time, but we’re very focused on the long-term road map.”
Going custom
It’s not just PC sales that are slowing. The very core of computer chip technology advancement is changing. An industry rule called Moore’s Law has long dictated that the number of resistors on a chip should double about every two years.
“The process that we call Moore’s Law still has at least another decade to go, but there’s definitely, it’s slowing down,” Goldberg said. “Everybody sort of used CPUs for everything, general purpose compute, but that’s all slowed down. And so now it suddenly makes sense to do more customized solutions.”
Former Xilinx CEO Victor Peng and AMD CEO Lisa Su on stage in Munich, Germany, at the
AMD
That’s why AMD acquired Xilinx, known for its adaptive chips called Field-Programmable Gate Arrays, or FPGAs. Earlier this year, AMD also bought cloud startup Pensando for $1.9 billion.
“We can quibble about some of the prices they paid for some of these things and what the returns will look like,” said Goldberg, adding that the acquisitions were ultimately a good decision. “They’re building a custom compute business to help their customers design their own chips. I think that’s a very, it’s a smart strategy.”
More and more big companies are designing their own custom chips. Amazon has its own Graviton processors for AWS. Google designs its own AI chips for the Pixel phone and a specific video chip for YouTube. Even John Deere is coming out with its own chips for autonomous tractors.
“If you really look underneath what’s happening in the chip industry over the last five years, everybody needs more chips and you see them everywhere, right?” Su said. “Particularly the growth of the cloud has been such a key trend over the last five years. And what that means is when you have very high volume growth in chips, you do want to do more customization.”
Even basic chip architecture is at a transition point. AMD and Intel chips are based on the five-decade-old x86 architecture. Now ARM architecture chips are growing in popularity, with companies like Nvidia and Ampere making major promises about developing Arm CPUs, and Apple switching from Intel to self-designed ARM processors.
“My view is it’s really not a debate between x86 and Arm,” Su said. “You’re going to see basically, these two are the most important architectures out there in the market. And what we’ve seen is it’s really about what you do with the compute.”
For now, analysts say AMD is in a strong position as it diversifies alongside its core business of x86 computing chips.
“AMD should fare much better in 2023 as we come out of the cycle, as their performance gains versus Intel start to become apparent, and as they start to build out on some of these new businesses,” Goldberg said.
Intel did not immediately respond to a request for comment.
Correction: “And we were not selling those into China,” said Lisa Su, AMD’s CEO. Her quote has been updated to reflect a typo that appeared in an earlier version of this article.
Max Levchin, co-founder of PayPal and chief executive officer of financial technology company Affirm, arrives at the Sun Valley Resort for the annual Allen & Company Sun Valley Conference, in Sun Valley, Idaho.
Drew Angerer | Getty Images
Affirm shares rose 15% in extended trading on Thursday after the provider of buy now, pay later loans reported better-than-expected earnings and revenue for the fiscal fourth quarter.
Here’s how the company did versus LSEG consensus estimates:
- EPS: 20 cents vs. 11 cents estimated
- Revenue: $876 million vs. $837 million estimated
Revenue climbed 33% in the period from $659 million in the same quarter a year earlier. Gross merchandise volume rose 43% to $10.4 billion from $7.2 billion a year ago.
Affirm reported net income of $69.2 million, or 20 cents a share, after recording a loss a year earlier of $45.1 million, or 14 cents a share.
“This consistent execution led Affirm to achieve operating income profitability in FQ4’25 – right on the schedule we committed to a year ago,” the company said in its shareholder letter.
For the first quarter, Affirm said revenue will be between $855 million and $885 million, while gross merchandise volume will be $10.1 billion to 10.4 billion.
Shares of Affirm were up 31% this year before the after-hours pop, topping the Nasdaq’s 12% gain.
Affirm, which went public in 2021, faces growing competition in e-commerce. It has partnerships with Amazon and Shopify, but Walmart recently shifted to competitor Klarna, which is expected to go public in the near future. Last year, Affirm announced a deal with Apple.
Elon Musk reacts during a press event with U.S. President Donald Trump (not pictured), at the White House in Washington, D.C., U.S., May 30, 2025.
Nathan Howard | Reuters
Elon Musk’s fervent promotion of Tesla‘s self-driving technology isn’t doing much to win over prospective buyers.
According to a new survey, more U.S. consumers say that Tesla’s FSD, or Full Self-Driving (Supervised) systems, would push them away from the brand rather than drawing them to it.
The Electric Vehicle Intelligence Report for August, published by political consulting firm Slingshot Strategies, polled 8,000 Americans. Only 14% of those surveyed said FSD would make them more likely to buy a Tesla, while 35% said the technology would make them less likely to purchase one.
The remaining 51% said the availability of FSD would make no difference to them in terms of their car buying decisions. Nearly half of consumers surveyed by Slingshot said they think FSD technology should be illegal.
For Tesla, the troubling results land in the middle of a sales slump resulting from an aging lineup of electric vehicles and increased competition from rivals. There’s also reputational damage in response to Musk, his incendiary political rhetoric, work with the Trump administration and support of Germany’s far-right AfD party.
Sales of Tesla cars in Europe plunged 40% in July from a year earlier, the seventh consecutive month of declines.
In the robotaxi market, Tesla is lagging Alphabet-owned Waymo, and Baidu’s Apollo Go. It’s now in the early stages of testing a ride-hailing service in Austin, Texas, and in the San Francisco Bay Area, with hopes to reach more cities this year. Cars in Austin have human supervisors on board, while those in San Francisco have drivers at the wheel.
Musk, the world’s richest person, has said the future of Tesla hangs on its ability to deliver autonomous vehicles and related services. He recently said a new variant of the Model Y, which launched in China, won’t “start production in the U.S. until the end of next year,” and “might not ever, given the advent of self-driving in America.”
For now, Tesla still relies on EV sales for the vast majority of its revenue, though Musk has touted FSD as one of the company’s big advantages over competitors.
Last month, executives suggested that Tesla has a market education problem when it comes to driving adoption of FSD.
“The vast majority of people don’t know it exists,” Musk said on the company’s second-quarter earnings call. “And it’s still like half of Tesla owners who could use it, haven’t tried it even once.”
Musk said he would start telling customers about FSD when they bring their cars in for service, and would begin reaching out to drivers, sending them videos of how it works.
Tesla CFO Vaibhav Taneja said on the July earnings call that people who subscribe to the premium FSD option get something like a “personal chauffeur” for about $3.33 a day.
The version of FSD Supervised that Tesla sells today is available to owners for $99 per month or an up-front purchase. The system gives users a limited set of self-driving capabilities on residential and city streets.
On Thursday, Tesla sent out a promotion offering 0% APR financing for customers ordering a new Model 3 by Sept. 1, as long as they add FSD Supervised to their order, or transfer it from their previously owned Tesla.
‘Holding AV manufacturers responsible’
Musk has said in posts on X that FSD can “can operate in all conditions,” will “save lives” and will be a “life-changing product” for many people. He’s also shared user-generated videos showing Tesla owners using FSD without their hands on the wheel.
However, in owners manuals, Tesla lists many conditions in which FSD Supervised may not be reliable, and warns users to keep their hands on the steering wheel at all times, and be ready to take over steering or braking.
Among the subset of survey respondents actively looking to buy a fully electric vehicle, only 20% said they were more likely to buy a Tesla because of FSD, while 33% said they were less likely. Evan Roth Smith, Slingshot’s head of research, said a lack of clarity and honesty in the company’s marketing could be a factor.
Most consumers polled by the firm want clear and strong regulations in the U.S. governing autonomous vehicles, whether they’re fully or partially automated.
“There is strong support for holding AV manufacturers responsible for accidents and requiring stricter regulatory and advertising guardrails around features such as FSD,” the Slingshot report said.
Smith said the data shows that beyond its FSD woes, Tesla has “the worst reputation of any EV maker in the U.S.”
“The drop in the company’s brand reputation this year is remarkable,” he said, adding that recent product liability lawsuits and verdicts may be playing a role.
In early August, a jury found Tesla partially liable for a fatal crash where the driver was relying on its autopilot systems. Tesla, which plans to appeal the decision, must pay around $243 million in damages to victims and a survivor.
In the past two months, the number of consumers who view Tesla cars as unsafe has increased to 36% from 34%, the Slingshot report found, while those viewing Tesla as very safe fell to 13% from 17%.
Honda, Toyota and Chevrolet were seen as safest among the greatest number of respondents.
Tesla didn’t respond to a request for comment. Slingshot said it sent the survey results to the company but also didn’t hear back from the automaker.
Tesla may find that owners in other markets embrace its brand, and FSD, with greater enthusiasm. The company just started offering FSD Supervised in Australia this week.
Read Slingshot’s full Electric Vehicle Intelligence Report for August 2025 here.
WATCH: Wedbush’s Ives says 80% of Musk lawsuit against Apple, OpenAI is ‘noise’
A Dell Technologies sign is seen in Round Rock, Texas, on June 2, 2023.
Brandon Bell | Getty Images
Despite beating on its top and bottom lines, shares of Dell Technologies fell more than 5% Thursday in extended trading after giving third-quarter earnings per share guidance that below Wall Street’s expectations.
Here’s how the systems integrator did versus LSEG consensus estimates:
- EPS: $2.32, adjusted vs. $2.30 estimated
- Revenue: $29.78 billion vs. $29.17 billion estimated
Dell raised its full year outlook for revenue to be $107 billion at its midpoint and diluted earnings per share to $9.55 at the midpoint, topping Wall Street estimates of $104.6 billion and $9.38 per share.
However, Dell’s guidance for third-quarter earnings per share of $2.45 came in short versus LSEG’s mark of $2.55, despite Dell’s guide for $27 billion in third-quarter revenue topping estimates of $26.1 billion.
Dell said that part of the reason its profit forecast is concentrated in the fourth quarter is due to seasonality, particularly in its storage business.
For the second quarter, overall revenue rose 19% on an annual basis. That was driven by the company’s Servers and Networking revenue, including AI servers, which came in at $12.9 billion, which was up 69% on an annual basis.
Dell is one of Nvidia’s key customers. Dell buys chips from the AI leader and builds computers around them, which it sells to end-users such as CoreWeave, a cloud service. Dell said it shipped $10 billion in AI servers in its past two quarters.
Dell said that it now plans to ship $20 billion of artificial intelligence servers in its fiscal 2026, double what it sold last year.
However, the company’s storage revenue declined 3% to $3.86 billion and missed a StreetAccount estimate of $4.1 billion in sales.
Revenue in the company’s client solutions group, which includes PC sales to enterprises, rose 1% on an annual basis to $12.5 billion. While it used to be Dell’s largest business group, in recent quarters it has grown much slowly than the company’s data center business.
Dell said it spent $1.3 billion on share repurchases and dividends during the quarter.
WATCH: Nvidia’s data center opportunity is still enormous and it’s early, says Bernstein’s Stacy Rasgon
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