AMD Courts Samsung for 2nm Chips as Server Dominance Forces Intel Into a Corner

Advanced Micro Devices is pushing deeper into the server market while simultaneously expanding its manufacturing base, with talks underway to have Samsung Foundry produce next-generation 2-nanometer chips. The move would loosen the company’s near-total reliance on TSMC and cushion geopolitical risks tied to Taiwan, even as AMD’s data-center business logs record-breaking sales.

The chip designer’s board and shareholders have already thrown their weight behind the growth trajectory. At the annual meeting on May 13, investors approved a revised stock compensation plan authorizing 65 million additional shares and backed all proposed directors and governance items. CEO Lisa Su, whose re-election was supported by 77.88% of outstanding shares, used the occasion to stress a vision of a trillion-dollar addressable market, with AMD targeting annual revenue growth above 35% and earnings per share exceeding $20.

Server CPUs: A Two-Front War

That ambition is grounded in a surging server-processor business. According to UBS, global server-CPU shipments climbed roughly 6% quarter-on-quarter in the latest period and were 19% higher than a year earlier — a break from the typical seasonal softness. AMD captured 27.4% of unit shipments, while Intel slid to 54.9% and Arm took 17.7%. The picture is even starker in the high-margin x86 server segment, where AMD’s revenue share hit a record 46.2%, leaving Intel with 53.8%.

The unit numbers understate AMD’s progress. The company’s own data-center revenue surged 57% year-on-year to $5.8 billion in the most recent quarter, helping push total sales to $10.25 billion. Adjusted earnings came in at $1.37 a share, topping expectations. For the current quarter, management is guiding for revenue of roughly $11.2 billion, implying about 46% annual growth, with an adjusted gross margin near 56%.

Analysts point to agentic-AI workloads — applications that require processors with high core counts to run multiple AI agents simultaneously — as a key accelerator. AMD’s architecture is well suited to these tasks, and the company expects server-CPU sales to expand more than 70% this year. Industry estimates suggest the entire server-processor market could quintuple to around $170 billion by the end of the decade.

Should investors sell immediately? Or is it worth buying AMD?

Diversifying the Foundry Footprint

To meet that demand, AMD is exploring production at Samsung Foundry’s 2nm facility. The manufacturer currently handles the vast majority of its chip output at TSMC, which is running near capacity for the next several years. A deal with the South Korean foundry would give AMD crucial extra wafers and reduce single-source exposure in an increasingly volatile geopolitical landscape.

The stock has more than doubled since the start of the year, trading at €384.00 in Friday’s session — though a small pullback from the week’s high. At €376.15 in the primary article’s timeframe, the share still shows a year-to-date gain of around 97%. Valuation remains a talking point: trailing price-to-earnings is a lofty 153, but forward P/E based on expected earnings falls to about 65.

The Gaming Cloud and the Valuation Ceiling

Not every division is firing on all cylinders. AMD’s gaming segment is forecast to see revenue drop more than 20% in the second half of 2026 relative to the first six months, weighed down by higher memory and component costs. Wedbush flagged lingering uncertainty around the ramp of the MI450 and MI455 GPUs, saying it could not fully corroborate the company’s optimistic timeline. HSBC, meanwhile, cautioned that after the recent rally the stock leaves little room for disappointment, with its valuation having jumped from roughly 19 times expected 2027 earnings to nearly 33 times. Citi remains constructive on the CPU side but is waiting for proof points on the next GPU generation and the Helios rack systems.

For now, the narrative rests on execution. AMD must maintain its server-market momentum, deliver the MI450 and MI455 ramp, and secure the Samsung partnership to reinforce its supply chain. The $11.2 billion revenue target for the current quarter sets a concrete — and high — bar.