Intel Corporation (INTC) and Advanced Micro Devices, Inc. (AMD) are two prominent players in the semiconductor chip industry. Santa Clara, Calif.-based INTC designs, manufactures, and sells computer products and technologies that deliver networking, data storage, and communication platforms. The company also provides IoT products, computer vision, machine learning-based sensing, data analysis, localization, mapping, and driving policy technology. In comparison, AMD, which is also headquartered in Santa Clara, offers microprocessors, chipsets, GPUs, server and embedded processors, semi-custom System-on-Chip (SoC) products, technology for game consoles, and provides assembly, testing, and packaging services.
With favorable government policies and substantial corporate investments, global semiconductor industry sales increased 24% year-over-year to $49.7 billion in November 2021. Various measures taken to address the semiconductor chip shortage should enable the industry to increase production levels this year. This, along with impressive breakthroughs in the chip manufacturing process, make the industry’s long-term prospects bright. Growing investor optimism in this space is evident in the SPDR S&P Semiconductor ETF’s (XSD) 13.9% gains over the past nine months versus the SPDR S&P 500 Trust ETF’s (SPY) 6.8% returns. The global semiconductor chips market is expected to grow at a 7.8% CAGR and reach $553.60 billion by 2026. So, both INTC and AMD should benefit.
