The problems at AMD (AMD) should also mean trouble for Intel (INTC), since AMD is Intel's longtime competitor in the microprocessor market, Gimbel's to Intel's Macy's as it were. So those concerned about AMD's fate might wonder whether this would leave Intel open to greater antitrust scrutiny as an unregulated monopoly, or conversely leave it open to exploit such a monopoly.
The answer is no. Intel faces plenty of competition across the board, and the loss of AMD as a competitor won't make things any easier.
Moody's has downgraded AMD's debt, which is nearly 50% of assets, to near-junk levels, and at least one analyst now calls the company "uninvestable." SemiAccurate says the company is talking up success in game machines but AMD really must penetrate mobile markets or it's doomed. (Bundling games with video cards won't get the job done.)
The reason this doesn't benefit Intel is simple. The problems at AMD are caused by the collapse of the PC market, and that collapse is hitting Intel just as hard as AMD. Intel processors must support the old x86 instruction set, as former Apple executive Jean-Louis Gassee notes, something rival ARM Holdings (ARMH) designs don't have to do.
And this last answers the question of what happens should AMD collapse. Nothing happens. The threat Intel faces from ARMH-based designs is far more severe than anything AMD has ever come up with. Like AMD, Intel faces a limited future if it can't move more strongly into devices, and even if it does succeed its profit margins will be hit hard.
It reminds me of the newspaper business, where some thought the failure of a second newspaper in a market would leave the first one as an unregulated monopoly. What happened, in fact, was that the Internet often killed the "monopoly" newspaper as well, while specialists in entertainment, local news, and business swallowed the rest of the niche.
That's what is happening in semiconductors today. Intel may be the last PC chip supplier standing, but who says we need a PC chip supplier in 2013? Intel has the cash and engineering talent needed to survive in this new world, but its culture must change if it is to thrive.