Advanced micro devices (NASDAQ: AMD) was successful in the laptop market last year with its Ryzen 4000 Mobile processor line. The chips were built on the company’s Zen 2 architecture and Taiwan Semiconductorthe 7nm manufacturing process, providing exceptional performance and competing effectively with giant products Intel (NASDAQ: INTC).
As soon as a significant number of laptops were available, AMD’s market share increased. AMD’s chips were in 20.2% of laptops sold in the third quarter of 2020, according to Mercury Research, as reported by Tom’s Hardware, against 14.7% in the same period in 2019.
At the CES 2021 technology fair on Tuesday, AMD announced the next iteration of its Ryzen laptop processors. The Ryzen 5000 Mobile series uses the company’s latest Zen 3 architecture, the same architecture used for AMD’s latest desktop chips. The new chips use the same 7 nm manufacturing process as their predecessors, so the jump in performance is likely to be less this time.
Image source: AMD.
Double-digit improvements
The Ryzen 5000 Mobile family from AMD features 13 processors. Interestingly, the two lowest-performing chips are built on AMD’s previous Zen 2 architecture, probably to keep costs low. The next generation Zen 3 processor is the Ryzen 5 5600U with 12 threads and 6 cores, while the top level processor is the Ryzen 9 5980HX with 8 cores and 16 threads.
Processors bearing the HX designation are intended for players and creators. AMD claims that the Ryzen 9 5980HX processor offers up to 23% more single-threaded performance and up to 17% more multi-threaded performance than the next-generation Ryzen 9 4900H processor.
Below the HX series in terms of performance is the H series, with these processors using slightly less power and slower clock speeds. The HS series reduces power consumption even further, and the U series targets laptops where efficiency and battery life are as important as raw performance.
AMD is making great promises for these U-series chips. The company claims that the Ryzen 5800U, an 8-core chip that must find its way into some next-generation ultra-notebooks, offers 16% better single-threaded performance and 14% better multi-threaded performance than the next generation Ryzen 7 4800U. The battery life should also be solid, with up to 17.5 hours of general battery use and up to 21 hours of movie playback.
Devices coming soon
AMD expects the first Ryzen 5000 Mobile notebooks to be available sometime in the first quarter, with more than 150 notebooks scheduled for launch in 2021 with the new chips.
Unlike the desktop CPU market, where AMD can sell its chips to those who build its own PCs, the laptop market requires AMD to convince original equipment manufacturers (OEMs) to design systems around their chips. Although AMD products have outperformed Intel in terms of performance, Intel chips still supply power to about 80% of laptops sold. For consumers who don’t follow the industry and know little about technology, buying an Intel-based laptop is the path of least resistance.
Intel has unveiled some new proprietary laptop processors in the past few days. Intel’s Tiger Lake-H series will not compete with AMD’s best. Instead, processors will power devices that aim to provide decent gaming performance along with good battery life. Intel’s most powerful Tiger Lake laptop processors are not yet available.
AMD is expected to continue gaining market share this year, but how much it will gain depends on the degree of OEMs’ adherence to its products. Intel is having no problem selling notebook chips in the midst of the pandemic – volumes increased 25% year-over-year for the company in the third quarter. AMD will have to overcome Intel’s inertia in the notebook market, which will be easier said than done.
Market share gains will not necessarily translate into a higher price for AMD. AMD’s shares are historically expensive after strong performance in 2020, with shares trading for well over 100 times earnings. While the AMD company is likely to perform well this year, AMD’s stock is another story.