AMD secures capacity years ahead to avoid chip shortage

04 November 2021

While many segments of the electronics industry are struggling to find semiconductor capacity due to the ongoing chip shortage, Advanced Micro Devices (AMD) has been able to avoid most problems in the global supply chain.

In a report from Reuters, AMD said it has accomplished this by forecasting demand years in advance, allowing it to take away market share from rival chipmaker Intel Corp.

"Our supply chain team has worked to make sure that we have months and years of forecast ahead into our supply chain," Mark Papermaster, CTO of AMD told Reuters. "Everybody has had to increase their focus on the supply chain but we did so from the very beginning of the pandemic."

Fabless chip companies, or those that do not make their own semiconductors, must use foundries or partners to manufacture their products instead of building their own chip fab, which is extremely costly in construction and operation.

AMD, which unlike Intel does not make its own semiconductors, made deals with foundry leader Taiwan Semiconductor Manufacturing Corp. (TSMC) to guarantee a steady supply. And since the company uses the cutting-edge semiconductor process manufacturing, TSMC was happy to help in securing an adequate supply.

AMD’s chips were less affected by the chip shortage compared to the supply of mass-produced older chips due to there being not as many chips that are manufactured via cutting-edge processing technologies. Automotive semiconductors, which were hit hardest by the chip shortage, use these older process technologies that are more in demand in the supply chain.

AMD told Reuters because of its focus on high demand, high margin chips, it is expected to increase revenue by 65% this year.

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