Advanced Micro Devices (AMD) shares have soared over 25 percent since May, while those of many other chipmakers, including Qualcomm, suffered steep losses during the same period.
AMD’s outperformance owes much to decisions by Sony and Microsoft to use its chips for their next generation consoles.
Sony and Microsoft together control 99 percent of the game console market. They launched PS4 and Xbox One respectively in 2013, and both companies plan to launch new consoles next year.
Sony said in April that its PlayStation 5 will offer a third generation octa core AMD Ryzen CPU. Microsoft also announced on June 10 that its next-generation Xbox will use AMD chips.
Securing these two clients means AMD would dominate the gaming market in the next 6-7 yers.
AMD’s stock price has surged 80 percent year-to-date, and its market cap has spiked to US$35 billion.
AMD focuses on CPU and GPU chips. But the company has always been overshadowed by bigger rivals Intel and Nvidia.
In 2014, a Taiwanese-American business executive, Lisa Su, became AMD’s chief executive. After taking the reins, she decided to change the firm’s focus to gaming chips in light of the shrinking PC market.
The strategic shift five years ago has begun to bear fruit.
Su, 50, was born in Taiwan, and migrated to US when she was three. She had worked at Texas Instruments, IBM, and Freescale Semiconductor in engineering and management positions.
She is one of the few female senior executives in the US chimaking industry, a field dominated by male leaders.
Su was also elected a member of US National Academy of Engineering.
As a matter of fact, Taiwanese engineers contribute a lot to the development of the global semiconductor industry.
Jason Huang, founder of Nvidia, was also born in Taiwan, for example. Taiwan Semiconductor Manufacturing Company, better known as TSMC, is the world’s largest semiconductor foundry.
MediaTek, another Taiwanese firm, has a 19 percent market share in China for smartphone chips. MediaTek and Huawei are neck and neck in this business.
There are a quite large number of Taiwanese engineers working for leading US chipmakers like Intel and Qualcomm.
Apparently, Chinese people have the talent to create high-end chips, if there is a suitable environment.
This article appeared in the Hong Kong Economic Journal on June 12
Translation by Julie Zhu
[Chinese version 中文版]
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