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AMD Reduces Chip Reservations As Nvidia Capitalizes on AI Opportunity
Uncertainties over demand for AI processors lead to divergent strategies among semiconductor giants
Isabella V28 October 2024

 

AMD is reducing its chip reservations at TSMC due to uncertainties in demand for AI processors, while Nvidia is using the opportunity to strengthen its position. The situation reflects the competitive dynamics in the semiconductor industry.

Key Points:

  • AMD decreases wafer orders from TSMC for 2025.
  • Nvidia takes advantage of the situation to expand its leadership in the AI ​​market. 
  • Other companies such as Marvell and Micron increase their bookings. 
  • The semiconductor industry is characterized by increasing volatility and adaptive strategies.

Amid growing volatility in the semiconductor market, Advanced Micro Devices (AMD) announced a significant cut in wafer reservations from TSMC through 2025 in response to uncertainties surrounding demand for its MI325 AI processors. The strategic shift had an immediate impact on the company’s stock price, which fell 3% following a warning from Morgan Stanley regarding the direction of AMD’s AI supply chain. Meanwhile, Nvidia is establishing itself as a key player, seizing the market opportunity and deepening its leadership position in the AI ​​space. This highlights the growing competitive pressures in the industry, where companies such as Marvell Technology and Micron Technology are increasing their wafer reservations, adopting an expansion strategy that contrasts sharply with AMD’s cautious approach. Meanwhile, Intel’s Habana division has shown stability in its reservations, indicating a solid outlook for AI manufacturing capabilities. This reflects the overall market trends, where semiconductor companies must navigate a complex and ever-changing landscape. Despite these fluctuations, AMD stock performance remains positive for the year, highlighting the inherent volatility of the industry, where corporate strategies constantly adapt to demand dynamics and technological advances.

AMD stock performance, while subject to change, continues to demonstrate how companies in the sector are ready to respond to emerging issues.