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What chip shortage? AMD books capacity years ahead to ease crunches

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·2-min read
FILE PHOTO: A sign of AMD is seen at the China Digital Entertainment Expo and Conference, also known as ChinaJoy, in Shanghai
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By Supantha Mukherjee

LISBON (Reuters) - Chip designer Advanced Micro Devices has been able to skirt most of the problems linked with the global chip supply shortage by forecasting demand years in advance, a top executive said on Tuesday.

Demand for electronics gadgets from people stuck in homes due to the pandemic has led to a shortage of semiconductors that are used from anything from mobile phones and cars.

But despite a squeeze in supply, AMD has been able to take market share away from rival Intel in both PCs and servers with its latest line of processors.

"Our supply chain team has worked to make sure that we have months and years of forecast ahead into our supply chain," Chief Technology Officer Mark Papermaster said on the sidelines of the Web Summit conference in Lisbon, Portugal.

"Everybody has had to increase their focus on the supply chain but we did so from the very beginning of the pandemic." Companies with existing ties with chip fabrication companies like Taiwan's TSMC were also able to guarantee a steady supply. AMD, which doesn't manufacture its own chips like Intel, depends on companies such as TSMC and GlobalFoundries to make the chips for them.

"We are using cutting edge semiconductor nodes and we are a very large purchaser in this area, so that is certainly helpful in securing our supply chain," Papermaster said.

Contrary to automakers, who are hardest hit by semiconductor shortage, AMD focuses on the smaller, more advanced chips which are less affected than the supply of mass-produced older chips.AMD has been focusing on high-margin chips, which not only allows the company to channel its resources but increases revenue, projected to rise 65% this year.

(Reporting by Supantha Mukherjee in Lisbon; Additional reporting by Stephen Nellis in San Francisco; Editing by Sandra Maler)

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