Very point.Oh they have competition, they managed to stave off mass hyperscaler exodus from x86 for now. Intel should be grateful to AMD on that one.
One variable that gives you better GMs is volume. If a design (that required a fixed amount of R&D resources to complete) sells 5 million units, it will have higher GMs than if it sells only 1 million units, and the design cost is spread over smaller number of units.Because they need to have healthy GM to invest in R&D. Semiconductor industry is capital intensive.