AMD. An EPYC Battle Plan Unfolds

AMD is setting the stage for an historic resurgence

31 May 2018

EXECUTIVE SUMMARY

Advanced Micro Devices CEO Lisa Su presented at the annual JP Morgan Global TMT conference on May 15, 2018. The fireside chat format lends itself to a more informal atmosphere compared to earnings calls and can often elicit more detailed and subtle information compared to high-profile presentations such as at CES for example. 

Following on from their recent, strong earnings release, the JP Morgan event delivered a wealth of detail about AMD's strategy, painting a picture of a company with an impressive product roadmap and a clever strategy for implementing it. As far as the datacenter is concerned, we see that strategy stretching all the way back to the Jim Keller-designed "Zen" architecture. While the architecture has been proven successful in its own right, the decision to combine smaller server CPU cores rather than go with a much larger monolithic die looks to have been prescient, reminiscent of the kind of edge that AMD gained over Intel way back in the days of Athlon. 

Spotting an opportunity in the form of Intel's 10nm woes which we discussed in this Insight Intel's 10nm Nightmare, AMD has decided to prioritise its next-generation EPYC server chips getting onto the 7nm node and now expects to have volume ramping in 2019. Furthermore, perhaps for the first time ever, they are actually benefiting from their renegotiated Wafer Services Agreement with Globalfoundries. Under the new agreement, they can now second-source foundry capacity with TSMC, so their strategy is a simple wait-and-see for whichever foundry comes up with the best 7nm process node. 

The same secular trends that are tailwinds for NVIDIA in the gaming and cryptocurrency segments are equally good for AMD- even more so now that they have a far better set of product roadmaps. The one area where they had really been lacking, compute capability for Artificial Intelligence, is now also being addressed with their new Radeon Instinct MI25 accelerator for deep learning. 

Emboldened by their success in 2017, AMD is now openly taking market share targets. In the server space, they are aiming for ~5% by EOY 2018. In the desktop and notebook segments, their goal is to double their current market share of around 10% within two years. 

With a potent combination of excellent product lineups and roadmaps, pick-of-the-crop options on 7nm foundry, design decisions that may well set a whole new direction for server computing and cunning operational strategy, we see an EPYC battle shaping up that bodes well for a resurgent AMD.