- Intel insiders acknowledged AMD's gains in a leaked document posted on Reddit.
- In the document, an Intel director said "clear focus and direction" were keys to "AMD's comeback."
- But he also noted that Intel has bounced back in the face competition from its archrival.
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Intel's longtime rival, AMD, has emerged as a more formidable threat to the chip giant in the last few years. In an unexpected twist, even Intel grudgingly admitted in a leaked document that its smaller, but scrappy arch-nemesis has outmaneuvered the tech powerhouse in some key markets through more focused execution.
"By most accounts, the competitive threats to Intel from AMD is the greatest it has been for years," an article posted on an internal Intel employee site said. A screenshot of the article was posted on r/AMD, an AMD fan community on Reddit, earlier this week.
Intel declined to comment.
The candid remarks from Intel insiders are striking given the two tech giants' historic rivalry. For roughly half a century, that David-versus-Goliath competition has helped defined the tech industry, with the smaller AMD taking on the gigantic Intel - in PCs, when those were a fast-growing market, and now in the more lucrative market for data center processors, where the battle has shifted.
AMD gains in datacenter chips
The main article pictured in the screenshot said that AMD's new processors are "posing direct competition to Intel" in both its PC and datacenter business. AMD's gains in high-performance chips are particularly noteworthy, the article said: "Competition from AMD is shaping up to be especially tough in high performance computing."
AMD's gains extend to Wall Street where, the article said, the company and the stock are "attracting increasing interest." AMD was even the top performing stock on the S&P 500 in 2018, the article noted. AMD shares have gained more than 25% year to date. Intel's stock is mostly flat, up 1%, over the same period.
The feature included a Q&A with Steven Collins, director of Intel's data-centric competitive assessment group, who said "AMD's comeback" began in 2015-2016 after current CEO Lisa Su took over in October 2014. AMD was then seen as a struggling chip maker, forced to cut its workforce and its stock cheaper than a Big Mac at around $3. AMD has bounced back since then. Its shares were trading at around $30 Thursday morning.
"AMD added much-needed clarity since they were previously distracted by markets that didn't align with their strengths," Collins said in the article. "They simplified their investments and roadmap and started leveraging best-in-class foundries. Most importantly, they executed to that strategy. Having a clear focus and direction helps enable great execution."
But he also noted that Intel has faced similar challenges in the past.
"While it has been a number of years since we've faced a similar competitive environment, Intel has risen to every situation and almost always emerged stronger and better," Collins wrote.
Praise for AMD's comeback
Analyst Roger Kay of Endpoint Technologies Associates, a longtime Intel observer, said the leaked document and the reactions on Reddit underline some of Intel's recent weaknesses, especially former CEO Brian Krzanich, who stepped down suddenly last year. New CEO Bob Swan, who had been Intel's chief financial officer, took over early this year, after serving as interim chief.
"Intel has let things slip, been too hung up on orthodoxy and the glories of the past, but I don't think the company is down for the count," he told Business Insider.
Steve Allen, an analyst with S2C Partners, a investor consulting firm, said Intel is struggling with a changing tech landscape. "Consumer products - desktop, laptop, tablet - are declining markets," he said, which is bad news since since are "Intel's traditional bread-and-butter." Intel also appears to have lost its edge in manufacturing technology, and also has wrestled with a sudden leadership change, he added.
Analyst Patrick Moorhead of Moor Insights and Strategy, a former corporate vice president at AMD, told Business Insider: "I'm glad Intel recognizes AMD is a competitive threat because AMD is. I'd be more worried about Intel if it wrote off AMD as it did back in 2004."
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