For the past year, AMD has been under relentless pressure to ship hardware out the door and the overall availability of RDNA2 has been low. Speaking at Deutsche Bank’s technology conference recently, the company’s CFO Devinder Kumar denied that AMD prioritizes GPU cryptocurrency miners.
AMD’s ability to meet GPU demand has been poor over the past year and at least goes back to the introduction of RDNA2. When asked if this was due to the crypto demand for his cards, Kumar said no:
We don’t prioritize our product or do it for the crypto people, not for the players and that’s a high priority from that point of view. What drove the growth, as you know, we launched the high-end Radeon 6000 series GPUs very competitively and that is driving the growth in the GPU space.
It’s not exactly clear how much AMD’s graphics business has grown. The company is not outsourcing its CPU and GPU businesses, but instead combines client-side Radeon and Ryzen sales into the Compute and Graphics division, while Enterprise, Embedded and Semi-Custom (EESC) Epyc, Radeon Instinct, the PlayStation 5, and Xbox Series X. There’s no evidence that AMD prioritized the crypto market, but the company’s GPUs have been very hard to find in retail stores.
AMD’s graphics growth is being driven by the same things as Nvidia’s: the pandemic and tremendous demand for electronics and entertainment devices. As with CPUs, AMD’s overall market share has moved in the wrong direction. According to data published by Jon Peddie Research, AMD’s share of the discrete graphics area has fallen by three points to 17 percent. Nvidia holds the rest of the market with 83 percent of the total market share.
AMD didn’t say how much its GPU business has grown, just that revenue has increased. It attributes those gains to shipping more high-end hardware. Like many companies, AMD is currently maximizing its profits by focusing on selling high-end hardware.
Conventional wisdom suggests that AMD did not ship enough graphics cards to meet the channel’s needs because of its focus on PS5 and Xbox Series X production. TSMC has limited capacity and AMD is contractually obliged to deliver inventory to both partners.
Devinder’s comments on AMD’s expectations for the console business emphasize that AMD is the sole supplier of these parts and that it is “very important” for the company to meet its manufacturing goals. Demand is high right now, has been high since launch, and AMD expects it to stay high through 2022. AMD expects the seasonality patterns to return at some point, but not before 2023.
The continued high demand doesn’t necessarily mean AMD can’t improve supply. Much depends on which TSMC customers migrate to their 5nm nodes and how much (if any) additional 7nm production products can be purchased from AMD. With that in mind, Nvidia’s CEO Jen-Hsun Huang has also stated that he doesn’t think the GPU market will fully meet demand until the end of next year.
AMD can achieve record sales between its CDA2 GPUs and its RDNA2 cards, but for that to happen, the company must primarily target the OEM channel. Retail GPU availability for AMD has never been very good. AMD remains a games and graphics company, but its interest in the high-end PC gaming market has been modest for the past six years. It may well be that RDNA2 should be AMD’s triumphant return to PC gaming before COVID-19 ambushed availability and hit it half to death, but the bottom line is that Nvidia continues to overwhelmingly dominate the discrete GPU market.
AMD is ready to develop ARM chips
There was a brief time when AMD seemed all-in on ARM CPUs (at least for certain markets), but the chip design firm has put those plans to get Ryzen out the door on hold. According to Devinder, AMD has no objection to partnering with companies that want to build ARM chips.
“We are ready to do this even if it is not x86, although we believe that x86 is the dominant strength in this area, which we believe from my point of view at the CFO level,” said Kumar.
This is less of an instant focus than a reminder that AMD has a sizable semi-custom business and is not chained to the x86 market. This is not only true for AMD; Intel also has an ARM architecture license.
By signaling its continued openness to ARM and ARM technology, AMD is holding the door open a bit for the idea of bringing a future ARM processor to market. It’s also a way to invite potential customers who don’t want to use x86 to consider AMD for future semi-custom needs.
When AMD started its semi-custom business it meant the Xbox One and PlayStation 4. Things have changed on that front in the past few years. In addition to developing the Xbox Series X and PlayStation 5 SoCs, AMD has publicly developed a GPU for Samsung and a console processor for Tesla. One could make a specific argument that the company is focused on gaming – just not necessarily PC gaming.
But regardless of how you feel about AMD’s overall gaming stance, promoting its willingness to manufacture ARM silicon is a way for AMD to signal its flexibility and highlight the capabilities of its semi-custom unit. Like Intel, the company is looking for ways to emphasize that it is more than just a developer and manufacturer of x86 CPUs.