Currently Advanced Micro Devices (AMD) and Intel are big players who dominate the world's processors (CPUs). Intel has successfully dominated the world CPU market for many years, including in terms of market capitalization (market cap).
This time AMD managed to surpass Intel's market capitalization for the first time in history after AMD acquired chip company Xilinx recently.
AMD currently has a market capitalization of 197.75 billion US dollars. Meanwhile, Intel has a market capitalization of 197.24 billion US dollars.
See also: AMD will acquire Xilinx, value reaches USD 54 Billion
Although the difference is small, AMD still has a bigger market cap than Intel after 52 years of its presence in the world CPU market, as quoted by TomsHardware.
AMD's achievement was thanks to the company's policy of acquiring Xilinx for 49 billion US dollars as well as being the largest acquisition in the history of the semiconductor company.
Xilinx itself is a manufacturer of FPGA (field-programmable gate array) chips. The acquisition triggered the conversion of 248.38 million Xilinx shares into the new 428 million AMD shares.
When combined with AMD's shares that have been circulating in the market, AMD's shares totaled 1.628 billion shares.
See also: Intel releases blockchain chip for crypto mining and NFT
Currently, the technology industry is experiencing a shortage of chips, which makes the prices of technology products more expensive.
Fortunately, the bright spot is starting to appear, the CEO of semiconductor company AMD, Lisa Su predicts the chip shortage crisis will begin to subside in the second half of 2022.
However, Su warned that supply of chips would be very tight in the first half of 2022 as chip manufacturers continue to work on meeting demand in a market that has stalled due to the pandemic.
Su said the factories would only start producing chips in the next few months. The recovery from the chip crisis will take place gradually as a lot of production capacity becomes available.
See also: New lineup AMD Ryzen 7000 series CPU ready to launched in the second half of 2022
“We always go through a tidal cycle, where demand exceeds supply, or vice versa. But this time it's different,” said Su.
The chip shortage crisis was triggered by the Covid-19 pandemic that hit the world. The need for PCs has increased sharply because most of the world's population is encouraged to work and carry out activities at home to minimize the spread of Covid-19. As a result, the demand for chips also increased.
“The pandemic has taken the demand level to a new level,” Su explained as quoted by CNBC.
Although conditions and the economy are gradually recovering and returning to normal, Su said demand for chips remains high as the scarcity also spreads to other industries, such as autos. In the midst of the crisis, AMD's shares have actually crept up more than 120 percent since the beginning of 2020 to more than 108 US dollars, or around Rp. 1.5 million.
AMD does not produce its own chips because it cooperates with third-party chip manufacturers such as Taiwan Semiconductor Manufacturing Company (TSMC) for the production process.
The research firm IDC also predicts the semiconductor market will return to normal in mid-2022. Not only will it return to normal, IDC predicts that the chip stock will be abundant, even oversuppy in 2023.
This was due to the massive addition of capacity at the end of 2022. IDC estimates that the semiconductor market will grow 17.3 percent by the end of this year, higher than 2020, which grew 10.8 percent.