Who Are Advanced Micro Devices' (AMD) Main Competitors?

Companies in the semiconductor industry are in a constant race to build smaller, faster, and cheaper chips. The industry, which began in 1958 when fabricating semiconductors became feasible, grew from a $1 billion industry in 1966 to a $600 billion industry by the end of 2022. The semiconductor industry is dominated by some very large players with distinct niches and advantages--including Advanced Micro Devices (AMD).

Advanced Micro Devices Inc. has historically been one of the significant players in the semiconductor industry. The company has seen its market capitalization decline precipitously from the highs it reached during the dot-com bubble in 2000 and again in 2006 when analysts and market participants perceived the company as an innovator in the industry. Even though the company's stock price is in decline once again, AMD generated net revenue of $16.4 billion in 2021, 68% year-over-year growth compared to 2020. Here, we take a look at four AMD competitors.

Intel

Intel Corporation (INTC) is the one of the largest pure-play competitor to AMD on the list. The company creates, produces, and sells integrated digital technology platforms all over the world. As one of the leading players in the space, the company has historically invested heavily in research and development (R&D); in 2021, the company increased R&D investment by 12% to the previous year. For the fiscal year ending in December 2021, the company had $72 billion in annual revenue and gross margins of 55.4%. The company generated $30 billion cash and paid dividends of $5.6 billion as well as a $2.4 billion in share buybacks. Intel earned $4.89 per share. As of September 28, 2022, the company had a market cap of $111.4 billion and a price-to-earnings (P/E) ratio of 5.8%.

IBM

International Business Machines Corporation (IBM) is a diversified technology products and services company, and semiconductors represent one piece of the company's overall business. IBM is a global leader in technology R&D, and it continues to invest a substantial amount of money every year. IBM follows the non-GAAP accounting policy and reported $57.4 billion in revenue for the fiscal year that ended in December 2021, of which hybrid cloud revenue contributed 35%. The gross profit margin was 54.9% and the company holds a healthy liquid position with cash from operations is $12.8 billion and $6.5 billion in free cash flow. In addition, its consolidated diluted earnings per share was $6.35. IBM generated non-GAAP earnings per share (EPS) of $5.21 for the fiscal year, a 18.9% increase over the previous year. The company issued $5.9 billion in dividends to stock holders. As of September 28, 2022, the company had a market cap of $109 billion and a P/E ratio of 19.92.

NVIDIA

NVIDIA Corporation (NVDA) is a semiconductor company specializing in chips used primarily in graphics and gaming. The company doesn't manufacture the chips themselves, instead following a fabless manufacturing strategy with "world-class suppliers." Staying competitive, the company increased R&D spending by 34% to $5.3 billion. For the fiscal year 2022, the company experienced great returns with $26.91 billion in revenues, up 61% from the previous year. The company's net income per diluted share was $3.85, an impressive 123% increase, as well as growth margins of 64.9%. The company also increased cash and equivalents by 84% to over $20 billion from $11 billion and issued $399 million in quarterly dividends. As of Sept. 28, 2022, the company had a market cap of $302 billion and a P/E ratio of 32.5%.

Analog Devices

Analog Devices Inc. (ADI) is a semiconductor company that creates, produces, and sells a suite of products that use analog, digital, and mixed-signal processing technology to manufacture integrated circuits and other solutions for industries and consumers. The company serves niche markets in the automotive and communications industries and sells its products worldwide. For the fiscal year 2021, the company had $7.3 billion in revenue with gross margins of 61.8%. In addition, Analog Devices had total cash and equivalents of $1.3 billion. The company spent over a million in R&D, a 23% increase over the previous fiscal year. In December 2021, the company issued dividend of $362.5 million to the shareholders. The diluted earnings per share experienced a small increase to 3.46%. As of Sept. 28, 2022, the company had a market cap of $72.5 billion and a P/E ratio of 41.71%, which is one of the highest in the large-cap semiconductor space.

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