What happened

Shares of Advanced Micro Devices (NASDAQ:AMD) rose 148.4% in 2019, according to data from S&P Global Market Intelligence. The chip designer held on to a rare manufacturing process lead over archrival Intel (NASDAQ:INTC) to boost its presence in the markets for data center computing and high-end gaming machines.

So what

AMD's manufacturing partners are already able to crank out large-scale production runs of processors using 7-nanometer chip traces. Meanwhile, Intel is only getting started on 10-nanometer production runs. Intel is usually the top dog in these manufacturing process battles, giving the larger company a far more cost-effective production platform. But the world turned upside down in 2018, so AMD holds that ace card these days.

Wide-angle shot of a semiconductor manufacturing clean room.

AMD's big gains started in clean-room manufacturing plants like this one. Image source: Getty Images.

Now what

The process advantage is not an academic trump card. AMD started shipping 7-nanometer PC processor and graphics chips in the third quarter, and the market embraced these products with open arms. The company posted its highest single-quarter revenue haul since 2005 while also expanding its profit margins across the board.

"We have the strongest product portfolio in our history," CEO Lisa Su said in the third-quarter earnings call. "We're on track to exit 2019 with another quarter of significant growth, driven by the ramp of our 7-nanometer products and believe we are well-positioned to build our momentum in 2020 and beyond as we deliver an even stronger set of leadership products that can drive sustained growth, an increased share of the $75 billion markets for high-performance computing and graphics technologies."

That's exciting stuff. AMD operates from a position of strength for the first time in more than a decade, and the skyrocketing stock returns make sense against that backdrop.