AMD will prioritize high-end CPUs and GPUs for desktop and notebook markets

nanoguy

Posts: 985   +14
Staff member
In brief: Server CPUs are a major driver of revenue growth for AMD, but the company says it still cares about gamers and will do its best to improve the availability of its high-end CPU and GPU parts for desktop and laptop PCs. That aside, the company is contemplating custom Arm-based silicon designs, citing interest from several customers.

Recently, Deutsche Bank's Ross Seymore asked AMD CFO Devinder Kumar about a range of topics concerning the company's financial performance over the past year.

One of the interesting things revealed during the discussion is that AMD's impressive 60 percent year-over-year revenue growth is mainly held back by ongoing supply issues with chip substrates that limit the company's ability to produce more processors, GPUs, and console APUs.

That issue could be related to the fact that TSMC is already cranking as many wafers as it can, and expanding capacity is a slow, multi-year process. Kumar was hesitant to say when things might improve, but did express optimism that come 2022, the supply will be better than it is right now.

With this in mind, it becomes a question of how to distribute the limited production capacity across product categories and maximize revenue. AMD has been prioritizing high-growth areas like server and high-end desktop CPUs, and that strategy has worked well so far. Last month, it was able to capture a 22.5 percent share of the x86 CPU market, mostly thanks to these two product categories.

Kumar says AMD will continue in this direction, but not to the point of building excess inventory. He wouldn't say, but it makes more sense for the company to prioritize Ryzen and Epyc processors, which carry higher profit margins. At the same time, the company is dedicating a $600 million quarterly budget for research and development in the server space. It still has work to do in reducing lead times, which are now at 20 weeks for Epyc versus 1-2 weeks for Intel's Xeon.

When asked about the GPU side of the equation, Kumar pointed out that Radeon 6000 series graphics cards released last year have also contributed to revenue growth. However, he vehemently denied the suggestion that AMD was prioritizing miners over gamers in any way.

Towards the end of the interview, Kumar explained that AMD is "prioritizing commercial gaming, premium customer working with our PC vendors for higher end products that command better ASPs." This means the company is well aware of the issue and solving it will greatly help its bottom line. At the same time, lower-end Ryzen 5000 CPUs and Radeon 6000 graphics cards may remain in short supply for a while.

Another bit worth mentioning is that AMD is open to working with Arm to create custom silicon for the data center and consumer PC markets if the need ever arises. AMD is also rumored to be working on an Arm-based rival chip for Apple's M1, but so far it appears to be a closely guarded secret. What we do know for sure is that AMD's partners have asked the company about making Arm-based designs. Kumar says "we stand ready to go ahead and do that even though it's not x86, although we believe x86 is a dominant strength in that area."

Permalink to story.

 

Dimitriid

Posts: 1,157   +2,206
I actually hope they're lying again, but this time for their own good: There's a lot more potential for profits, particularly long term, in the data centers vs the consumer end of things so their priority should be winning as many Epyc deals as they can.

Now the only caveat here is that even with pretty good growth they're predicting that the server world will be what it always has been: doesn't really matter how fast they can put out Epyc chips it will take years for data centers to slowly come around to change platforms when they next decide they need significant upgrades.

They're probably comfortable in the slow-but-steady growth forecast of the server world that they can make such claims but if for whatever reasons they would suddenly get something insane like 5000% more demand for Epyc chips I have no doubts they'd stop producing GPUs immediately (Well, GPUs not bound for a data center anyway) and even slow down consumer processors too. Because that'd make them the most money it's as simple as that.
 

Gimp65

Posts: 41   +77
We've heard this before.

"oh supply will definetly get better soon"

Anyone who believes this, I have a bridge to sell you.
Supply is getting better whether you believe it or not, if it ends up in stores where you can buy is another matter. Demand is still insanely high
 

Theinsanegamer

Posts: 2,727   +4,262
Supply is getting better whether you believe it or not, if it ends up in stores where you can buy is another matter. Demand is still insanely high
Supply can get "better" all it wants, if it doesnt result in hardware actually being in stock and available to purchase at msrp or reasonably close it doesnt matter.

We've been hearing for months that "supply is getting better" yet a look at any retailer shows "out of stock" on 90% of GPUs.
 

mgilbert

Posts: 36   +94
If AMD isn't doing anything to keep graphics cards out of the hands of miners - and we all know they aren't - then they are, in effect, prioritizing miners.

And as to AMD prioritizing high end CPUs and GPUs, that isn't their biggest market. Few of us are willing to pay high three-figure prices for either. The mainstream, midrange market is the one that needs attention.
 
Last edited:

Sausagemeat

Posts: 871   +709
Well that sounds like a boring interview. Well done Devinder Kumar, you successfully avoided bad press. We all know you’re lying and that AMD don’t give a dam about gamers or miners or anyone. Just money.

Also if AMD go into ARM they have to compete with Qualcomm. And people think that Intel is “evil” just wait until they see the crap that Qualcomm do. AMD will get eaten.
 

HardReset

Posts: 1,265   +926
Well that sounds like a boring interview. Well done Devinder Kumar, you successfully avoided bad press. We all know you’re lying and that AMD don’t give a dam about gamers or miners or anyone. Just money.
Adding Infinity cache on GPUs is proof that AMD really don't care about miners. Since miners want tons of memory with high bandwidth and Infinity cache is way too small for miners.
 

BSim500

Posts: 859   +1,978
Considering they've already completely abandoned the sub $200 market altogether (CPU, APU & GPU), all this probably means is they plan to shrink the $200-$400 bracket too...
 

Norsiiii

Posts: 85   +110
Supply can get "better" all it wants, if it doesnt result in hardware actually being in stock and available to purchase at msrp or reasonably close it doesnt matter.

We've been hearing for months that "supply is getting better" yet a look at any retailer shows "out of stock" on 90% of GPUs.
You're demonstrating a supreme lack of understanding of basic supply and demand dynamics.

Nvidia and AMD have manufactured and sold more GPUs and CPUs this generation than any previous.

Since the initial covid shutdowns in the first half of 2020, the shortage is not being caused by any reduction in chip fab output (they're churning out more chips than ever before) but by a bottlenecking of orders, ie, a massive demand spike.

A shortage simply means that demand exceeds the available supply. If there is a massive mis-match between aggregate demand and the available supply, you will see difficulties in finding any stock and massive secondary market price rises, ie, exactly what has happened over the past 18 months.

However, due to the sheer scale of the supply/demand mis-match in this case, any moderate increases in supply still get eaten up straight away by the massive bulk of excess demand. It is objective fact that supply is increasing, which means that more chips ARE ending up in the hands of more customers. The fact that it's not making a hugely noticeable difference to store shelves yet is simply a testament to the scale of the problem.

Fabs cant just pump out a few billion extra chips overnight to fix the bottleneck, have some patience.
 

Gimp65

Posts: 41   +77
Supply can get "better" all it wants, if it doesnt result in hardware actually being in stock and available to purchase at msrp or reasonably close it doesnt matter.

We've been hearing for months that "supply is getting better" yet a look at any retailer shows "out of stock" on 90% of GPUs.
Isnt that exactly what I just said ?
 

Uncle Al

Posts: 8,249   +7,024
The best part of all this mess is that there have been so many announcements of new chip factories that the price of chips will tumble, giving the consumer a great deal. Unfortunately for all of them, the shortage of rare earth materials can´t be remedied quite so easily and the lack of an aggressive recycling system will simply make this matter worse.
 
AMD is speaking of custom SoCs for customers who want custom-made CPUs for specific use that are based on some iteration of ARM--not on manufacturing and selling ARM CPUs to the general consumer markets...That's not going to happen. Intel made a similar announcement about custom SoCs for the customers who asked for it a few days ago; this is AMD simply making the point it can do the same.