Advanced Micro Devices (AMD -1.81%) has been in a thorn in Intel's (INTC -0.82%) side in the central processing unit (CPU) market since the arrival of the former's Ryzen processors, which originally hit the market in March 2017.
AMD held just under 18% of the CPU market at the end of 2016 before Ryzen arrived. The latest third-party estimates suggest that the chipmaker now controls close to 37% of the market. Other reliable estimates from the likes of video gaming platform Steam also suggest that AMD has been consistently chipping away at Intel's CPU dominance.
And AMD isn't done hammering Intel in CPUs just yet -- especially since the arrival of its latest Ryzen 5000 CPUs. Here's why.
Ryzen 5000 could widen AMD's advantage over Intel
Intel has historically enjoyed an advantage over AMD when it comes to single-thread CPU performance, which is considered more important for both average users and gaming enthusiasts. But AMD has recently been plugging the single-threaded performance gap by boosting the clock speed of its CPUs.
AMD may have exceeded Intel on that front with the new Ryzen 5000 processors. According to tests conducted by AnandTech, the AMD Ryzen 9 5900X processor, based on the latest Zen 3 microarchitecture, scores 6% higher than Intel's competing Tiger Lake-based Core i7 chip in single-threaded performance.
As compared to the previous-generation Ryzen 9 3950X (based on the Zen 2 architecture), AMD has managed to deliver a 17.8% single-threaded performance increase this time. With this, AMD may have reclaimed the single-threaded performance crown after more than a decade.
According to AMD's own claims, a high-end Ryzen 5000 processor can deliver a 26% jump in gaming performance over the previous-generation chip. AMD also claims that the chip is 7% faster in gaming performance than the competing Intel chip.
But the increased performance will now come at a price. AMD seems to have ditched its earlier strategy of undercutting competing Intel chips, and is boosting prices of the Ryzen 5000 processors across the board compared to the prices of their predecessors. Clearly AMD is looking to translate its single-threaded performance advantage into more dough. But is it the right thing to do?
Chipzilla's struggles could be a boon for Ryzen 5000
Now that AMD seems to have eclipsed Intel in single-threaded performance, it is not surprising to see the company ask for a premium from consumers. The chipmaker is now in a good position to hike prices considering its growing clout in the CPU market and the technological advantage that its chips enjoy over Intel.
AMD's Ryzen 5000 processors are based on a refined version of the 7-nanometer (nm) process used in the previous-generation Zen 2 processors, allowing the chipmaker to deliver improved performance and speed gains. Intel, on the other hand, is expected to remain stuck on a 14nm process when it brings out its 11th-generation Rocket Lake desktop processors in the first quarter of 2021.
Rumors suggest that Intel may not launch its 12th-generation 10nm Alder Lake processors until the second half of 2021 to compete with AMD's 7nm process. So AMD is likely to continue enjoying a technology lead over Intel, especially considering that it could make the move to a 5nm manufacturing process with the Zen 4 microarchitecture by the end of 2021, according to rumors.
As such, don't be surprised to see AMD continuing to eat Intel's market share, and remaining a top growth stock in the future thanks to a combination of improved CPU sales and stronger pricing power.