A slowdown in smartphone demand is creating an unexpected winner in the semiconductor world, and it looks like AMD is making the most of it. As some major mobile chipmakers pull back on advanced TSMC manufacturing capacity, AMD is stepping in aggressively, benefiting from both strong supply conditions and the ability to ship more processors.
The backdrop to this shift is the ongoing strain in the global mobile supply chain, where a persistent DRAM shortage is squeezing smartphone makers—especially in the budget and mid-range categories. A major reason is that a large portion of memory manufacturing capacity has been redirected toward High Bandwidth Memory (HBM), which is in high demand for AI servers and accelerated computing workloads. With HBM offering better margins, the broader memory market has tightened, and smartphone-focused components are feeling the impact.
Those rising memory costs are a serious problem for entry-level devices because they don’t have much room to raise prices without hurting sales. DRAM now accounts for roughly 35 percent of the bill of materials for an entry-level smartphone, while NAND adds about 19 percent. Combined, memory alone can make up around 54 percent of the total cost of a budget handset—an enormous share that puts pressure on manufacturers, retailers, and ultimately consumer demand.
With demand for low- and mid-tier smartphones cooling, production plans are changing upstream. Reports indicate that both Qualcomm and MediaTek have reduced their pace of orders for chips built on TSMC’s 4nm and 5nm process nodes. The scale of the pullback is significant, estimated at roughly 20,000 to 30,000 wafers. In practical terms, that can translate to approximately 15 million to 20 million fewer mobile chips moving through those advanced lines.
That’s where AMD’s opportunity comes in. With smartphone chip demand easing and capacity opening up on TSMC’s advanced nodes, AMD appears to be moving in to take advantage of the newly available wafer supply—especially for its mature, high-yield 5nm production. This is the kind of shift that can help AMD increase unit shipments, improve supply flexibility, and better meet demand across its CPU portfolio.
AMD CEO Lisa Su highlighted this dynamic during the company’s earnings call, pointing out that growth in the first quarter was “much more unit-driven.” She also emphasized that AMD is shipping more CPUs across multiple product families, including not only its high-end Turin lineup but also a substantial volume of Genoa processors based on its Zen CPU core architecture.
In other words, as the smartphone market hits a rough patch—fueled in part by memory pricing pressure—AMD is finding a clear advantage. Fewer mobile chip orders free up manufacturing capacity, and AMD is using that opening to push more server and high-performance CPUs out the door. It’s a classic example of how shifts in one corner of the tech industry can ripple outward, creating winners in entirely different segments.
