Why Intel is well-positioned against AMD and Nvidia

Semiconductors are in a bit of a gully right now. IDC predicted last week that after three consecutive years of growth, the market will decline 7%. Ironically, chip shortages have in part led to slower growth in certain markets. Unsurprisingly, NAND prices have plummeted, and there’s even mention that Intel will see declines in its datacenter business. Earnings in the category have also been mixed, leading equities analysts to downgrade certain companies, if not the entire category. Those who have been more optimistic about the category seemed to pin their hopes on a new trade deal with China. With such hopes fading quickly, it certainly puts a dark cloud over the entire industry.

So, in the short term, some investors may take pause. It’s important to remember that the need for compute, and therefore compute semiconductors, isn’t about to slow down — not with the world’s technology community focused on growth areas like artificial intelligence and analytics, high-performance computing, gaming, autonomous vehicles, delivery drones, and 5G. Most of these technologies are powered by the bigger compute and graphics processing capabilities of Intel, Nvidia, and AMD. These companies will battle hard for market share, and while it’s been a popular sentiment to discount Intel, I believe there are fundamental reasons that in the end, Intel has the best chance of coming out on top.