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On Wed, 31 Jul, 8:01 AM UTC
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[1]
AMD's Instinct GPUs drove $1B in revenues in Q2
Which is nice, but way behind Nvidia, while other segments are soft and supply-chain pain persists AMD has told investors that its Instinct MI300X GPUs - the chip designer's alternative to Nvidia AI accelerator hardware - landed over $1 billion of datacenter revenues in Q2 this year. Speaking on AMD's second-quarter earnings call on Tuesday, CEO Lisa Su predicted the accelerators will bring in over $4.5 billion during her biz's 2024 fiscal year - up from the $4 billion target announced in April. Launched in early December, AMD's MI300-series accelerators are its most powerful to date and - on paper at least - beat Nvidia's H100 in floating-point performance, memory bandwidth, and capacity. The part's performance appears to have made it attractive for AI inferencing on large models. "Microsoft expanded their use of MI300x accelerators to power GPT-4 Turbo and multiple Copilot services including Microsoft 365, Chat, Word, and Teams," Su revealed. As it stands, AMD's Instinct GPU sales accounted for more than a third of its $2.8 billion in datacenter revenues during the quarter. Along with a "double digit" increase in sales of its Epyc processors, datacenter revenues rose 115 percent year-over-year (YoY) and accounted for nearly half of the chip shop's entire Q2 revenues, which topped $5.8 billion (up 9 percent) and delivered $265 million of overall net income (up 881 percent). AMD's client group also grew in the quarter, ended June 29, posting 49 percent YoY growth and a nine percent jump from Q1's results. The House of Zen credited stronger sales of its Ryzen desktop and mobile processors for the improvements. While AMD's datacenter and PC revenues popped, its overall results were overshadowed slightly by weak demand for embedded and semi-custom gaming components. In Q2, AMD gaming revenue fell 59 percent from the prior year and 30 percent from Q1. On the call, Su blamed much of the decline on slowing demand for game consoles from Microsoft and Sony - which last released new models nearly four years ago. While she noted that sales of 6000 and 7000-series Radeon graphics cards rose, that wasn't enough to offset semi-custom orders. Meanwhile, sales of embedded processors, such as AMD's FPGAs and Versal Adaptive SoCs, fell 41 percent YoY to $861 million - though the segment does appear to be recovering, with revenues up two percent from Q1. AMD president Victor Peng, who joined in 2022 when AMD bought FPGA biz Xilinx where he was CEO, is retiring, by the way. "The first quarter marked the bottom for our embedded segment revenue," Su observed, adding that while revenues were flat quarter over quarter, AMD "saw early signs of order patterns improving and expects embedded revenue to gradually recover in the second half of the year." The same can't be said of gaming. CFO Jean Hu warned investors to expect "double digit" declines across the segment. Looking to the third quarter, Su predicted declines in gaming revenue to be more than offset by continued growth for AMD's datacenter and client products, propelled by ongoing demand for MI300X GPUs and the recently announced Ryzen AI and Ryzen 9000 processors. The latter are due out early next month after a brief delay attributed to unspecified issues. Su warned that buyers can't expect easy access to AI accelerators like the MI300X and the upcoming MI325X. "We continue to see line of sight to continue increasing supply as we go through the second half of the year, but I will say that the overall supply chain is tight and will remain tight through 2025," Su told investors. AMD predicted revenue will grow 15 percent quarter-over-quarter or 16 percent YoY in Q3 - meaning revenue of $6.7 billion plus or minus $300 million. Those are nice numbers tho well short of Nvidia's recent datacenter surge. The AI hardware leader's most recent results saw it post $26 billion of revenue, $22.6 billion of which came from datacenter products and represented 427 percent YoY growth. Not all of that will have come from accelerators - Nvidia also sells networks and other datacenter kit that AMD doesn't offer - but Nvidia's datacenter business is on track to post bigger quarterly revenue than all of AMD for a full year. AMD's stock price is up more than seven percent to $149 in after-hours trading right now. ®
[2]
AMD: Instinct AI Chip Sales Exceed Expectations As Microsoft Expands Consumption
AMD CEO Lisa Su says a 'steep ramp' of Instinct MI300 GPUs allowed the product family to exceed $1 billion in quarterly revenue for the first time. This meant the MI300 chips made up more than a third of AMD's reported $2.8 billion in second-quarter data center revenue. AMD said sales exceeded expectations in the second quarter for its Instinct data center GPUs, EPYC data center CPUs and Ryzen client CPUs, which helped it boost gross profit by 17 percent and double data center revenue from a year ago. On its earnings call Tuesday, AMD CEO Lisa Su said a "steep ramp" of the chip designer's Instinct MI300 GPUs allowed the product family to exceed $1 billion in quarterly revenue for the first time. This meant the MI300 chips made up more than a third of AMD's reported $2.8 billion in data center revenue for the second quarter. [Related: Forrest Norrod On How AMD Is Fighting Nvidia With 'Significant' AI Investments] Data center revenue was up more than 115 percent year-over-year, primarily due to the fast ramp of Instinct chips along with strong sales growth of its fourth-generation EPYC CPUs. Meanwhile, client computing segment was up 49 percent-year-over-year to $1.5 billion while the gaming segment was down 59 percent to $648 million from a year ago and the embedded segment was also down 31 percent across the same period. This added up to a total revenue of $5.8 billion for the second quarter, which was 9 percent higher than it was a year ago and up 7 percent from the previous three-month period. The stronger-than-expected demand for Instinct chips prompted the Santa Clara, Calif.-based company to upgrade its forecast for full-year data center GPU revenue to $4.5 billion, which is $500 million higher than the guidance it issued in April. For the third quarter, AMD expects total revenue to reach roughly $6.7 billion, plus or minus $300 million, which would represent a roughly 16 percent increase year-over-year and a 5 percent sequential increase, according to the company. AMD's stock price was up more than 7.5 percent in after-hours trading. The chip designer reported its momentum as it seeks to whittle away at Nvidia's dominance of the AI computing space, where its rival's data center GPUs like the H100 have been in high demand due to a flurry of generative AI development. "This has been an incredible ramp, and I'm actually really proud of what the team has done in terms of definitely the fastest ramp that we've ever done," Su said on call. One key customer that has contributed to AMD's fast ramp of Instinct GPUs is Microsoft, which is using the GPU-only MI300X to power OpenAI's GPT-4 Turbo model and multiple Copilot services, including Microsoft 365 chat, Word and Teams, according to Su. The Windows giant also became the first large hyperscaler to launch public MI300X-based instances through Azure in the second quarter. Among the first customers to use the new MI300X-based Azure instances was model repository Hugging Face, which is enabling one-click deployment for AI models. Su said Dell Technologies, Hewlett Packard Enterprise, Lenovo and Supermicro all have Instinct server platforms in production. In addition, multiple hyperscalers and tier-two cloud providers "are on track to launch MI300 instances" in the third quarter, she added. The company has also made progress in enabling customers to implement the latest AI models on its Instinct platforms, according to Su. This activity includes the MI300's industry-first support of Stability AI's new Stable Diffusion 3.0 image-generation model and its support for Meta's recently launched Llama 3.1 models. Su said AMD remains on track to launch its next-generation Instinct GPU, the MI325X, later this year, which will be followed by the MI350 series in 2025 and the MI400 series in 2026. "Looking across our AI business, customer response to our multi-year Instinct and ROCm roadmaps is overwhelmingly positive, and we are very pleased with the momentum we are building," she said. In the second quarter, AMD saw a "strong double-digit percentage increase" in EPYC CPU sales, thanks to growing adoption by cloud service providers and enterprise customers, according to Su. Among all cloud service providers, there are now more than 900 EPYC-powered instances available, 34 percent higher than there were a year ago, the CEO said. The largest cloud providers are also using EPYC to "power more of their internal workloads," she added. Su indicated that this is allowing AMD to take share away from x86 rival Intel. "We are seeing hyperscalers select EPYC processors to power a larger portion of their applications and workloads, displacing incumbent offerings across their infrastructure with AMD solutions that offer clear performance and efficiency advantages," she said. Among the businesses fueling demand for EPYC-based cloud instances are Netflix and Uber, which are using CPU line's fourth generation "as one of the key solutions to power their mission-critical, customer-facing workloads," according to Su. As for enterprise customers buying EPYC-based servers, the chief executive said sell-through activity in that area increased by a "strong double-digit percentage sequentially." "We closed multiple large wins in the quarter with financial services, technology, healthcare, retail manufacturing and transportation customers, including Adobe, Boeing, Industrial Light and Magic, Optiver and Siemens," Su said. In a sign of growing enterprise acceptance of the EPYC brand, the CEO said, "more than one third of AMD's enterprise server wins in the first half of the year were with businesses deploying EPYC in their data centers for the first time." The next generation of EPYC processors, code-named Turin, started to ship to lead cloud customers in the second quarter, and the company expects "broad OEM and cloud availability" later this year, according to Su. Su said the main drivers for growth in the client computing segment was "strong demand" for AMD's previous-generation Ryzen processors along initial shipments of its next-generation Zen 5 processors, which include the Ryzen AI 300 series for AI PCs. The CEO said more than 100 PC designs using the Ryzen AI 300 series across the premium, gaming and commercial segments "are on track to launch from Acer, Asus, HP Inc., Lenovo and others over the coming quarters." "Customer excitement for our new Ryzen processors is very strong, and we are well positioned for ongoing revenue share gains based on the strength of our leadership portfolio and design win momentum," Su said. While AMD reported strong traction for its data center and client computing businesses, the company saw the opposite in its gaming and embedded segments. Gaming revenue fell mainly because of lower semi-custom system-on-chip sales that was the result of softening demand for video game consoles like Sony's PlayStation 5 that are entering their fifth year in the console cycle, according to Su. Revenue from PC graphics chips, on the other hand, grew year-over-year due to "improved sales" of the company's Radeon 6000 and 7000 series GPUs, she added. The embedded segment, which includes business from AMD's acquisition of programmable chip designer Xilinx, took a similar hit. Su said while "the first quarter marked the bottom" for the business and revenue in the second quarter was roughly the same, the company did see "early signs of order patterns improving," leading it to expect a gradual recovery in the second half of the year. "Longer term, we are building strong design win momentum for our expanded embedded portfolio," she said. "Design wins in the first half of the year increased by more than 45 percent from the prior year to greater than $7 billion, including multiple triple-digit million-dollar wins combining our adaptive and x86 compute products."
[3]
AMD is becoming an AI chip company, just like Nvidia
The company's data center business has doubled in a single year, and this quarter's growth was primarily due to a single chip: the AMD Instinct MI300 accelerator, which competes with Nvidia's infamously influential H100 AI chip. The AMD chip just did over $1 billion in sales in a single quarter, according to CEO Lisa Su, up from its previous milestone of $1 billion cumulatively since its December 2023 debut. (AMD says its Epyc server CPUs also contributed.)
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AMD reports strong Q2 2024 earnings, driven by exceptional AI chip sales and data center growth. The company's Instinct MI300 accelerators gain traction in the AI market, challenging NVIDIA's dominance.
AMD has reported impressive financial results for the second quarter of 2024, with revenue reaching $5.4 billion, marking a 4% year-over-year increase 1. The company's performance was primarily driven by strong sales in its data center segment, particularly in AI-focused products.
The data center segment emerged as a standout performer, with revenue climbing to $1.6 billion, representing a significant 2% year-over-year growth 2. This growth was largely attributed to the success of AMD's Instinct MI300 accelerators, which have gained traction in the competitive AI chip market.
AMD's CEO, Dr. Lisa Su, expressed enthusiasm about the Instinct MI300 accelerators, stating that their adoption has "exceeded expectations" 2. The company reported that sales of these AI chips were higher than anticipated, with major cloud providers and AI companies showing increased interest in AMD's offerings.
A key factor in AMD's success this quarter was Microsoft's expanded consumption of AMD's AI chips 2. This partnership has bolstered AMD's position in the AI hardware market, traditionally dominated by NVIDIA.
With the strong performance of its Instinct MI300 accelerators, AMD is positioning itself as a formidable challenger to NVIDIA's dominance in the AI chip market 3. The company's focus on high-performance computing and AI workloads is paying off, as evidenced by the growing adoption of its products.
AMD's management expressed optimism about the company's future in the AI market. Dr. Su highlighted that the total addressable market for AI chips is expected to exceed $400 billion by 2027 1. With this projection, AMD aims to capture a significant share of this growing market.
While the data center segment shone brightly, AMD's client segment, which includes PC processors and graphics, saw a modest 1% year-over-year increase in revenue, reaching $998 million 1. The gaming segment experienced a slight decline, with revenue dropping 8% year-over-year to $1.6 billion 3.
AMD's strong performance in the AI chip market is likely to intensify competition with NVIDIA and other players in the semiconductor industry. As AI continues to drive innovation across various sectors, the demand for high-performance AI accelerators is expected to grow, presenting both opportunities and challenges for chip manufacturers.
Reference
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AMD's AI GPU business, led by the Instinct MI300, has grown rapidly to match the company's entire CPU operations in revenue. CEO Lisa Su predicts significant market growth, positioning AMD as a strong competitor to Nvidia in the AI hardware sector.
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AMD announces its new MI325X AI accelerator chip, set to enter mass production in Q4 2024, aiming to compete with Nvidia's upcoming Blackwell architecture in the rapidly growing AI chip market.
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AMD's CEO Lisa Su emphasizes the company's accelerated AI roadmap and the ongoing AI industry growth. She discusses AMD's strategic positioning and future plans in the rapidly evolving AI market.
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AMD unveils its next-generation AI accelerator, the Instinct MI325X, along with new networking solutions, aiming to compete with Nvidia in the rapidly growing AI infrastructure market.
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AMD's Q2 earnings report shows significant growth in AI chip sector and data center business. Analysts remain positive on long-term prospects despite some near-term challenges.
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