The rivalry between AMD and Intel peaked during the first decade of the 2000s, when the companies consistently challenged each other with a stream of chip innovations.
Since then, AMD lost its way, and today it barely registers as a threat to Intel. But the competitive landscape could start changing as early as next year.
Intel's x86 chips are installed in most PCs and servers, and AMD has been losing market share for years. AMD's chip technology has fallen behind Intel's after some ill-advised architectural changes, acquisitions, and manufacturing problems.
Intel's x86 processor market share was 87.7 percent the fourth quarter of 2015, growing from 86.3 percent a year earlier. AMD held just a 12.1 percent share, falling from 13.6 percent, according to Mercury Research.
But AMD has made some smart moves recently. It decided to cut its reliance on the declining PC market in 2013, something Intel finally acknowledged this week while cutting 12,000 jobs. AMD also has emphasized custom chips and hit paydirt with specialized processors for PlayStation 4 and Xbox One.
AMD is now poised to threaten Intel's market dominance. Only time will tell if AMD will be successful, but here are some technologies and business decisions AMD is relying on to better compete with Intel.
Licensing x86 architecture
It's possible we'll see PCs and servers using AMD-based chips not made by company, with AMD now licensing its top-line chip architecture. The long-running two-horse x86 race could then include more players, a development bound to hurt Intel more than AMD. Licensing is an easy way for AMD to expand the installed base of its processor technology while generating licensing revenue.
AMD last week licensed its upcoming Zen server chip architecture to THATIC (Tianjin Haiguang Advanced Technology Investment Co. Ltd.), a consortium of public and private Chinese companies, as part of a joint venture.
Lead in graphics
AMD has a valuable asset that Intel doesn't possess: the world-class Radeon and FirePro GPUs. Graphics processors are hot, with sales of gaming PCs growing in an otherwise slumping market. Intel wants to focus on gaming but only has a good CPU. AMD still has to compete with Nvidia in GPUs, but the company has a combination of hardware technologies that put it in a better position than Intel in virtual reality and gaming.
Versatile CPU assets
If you want an ARM chip for PCs or servers, AMD can make it. If you want x86, AMD has that, too. AMD officials have stressed the importance of versatility many times over the last two years. AMD's business relies on x86, but the company has stocked up on ARM technology, which could explode into servers and embedded devices in the coming years. Intel makes only x86 chips and doesn't have its sights on ARM.
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