AMD Execution Thread [2023]

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Great year all things considered.
I found it interesting how they said gaming graphics is currently produced below sale demand. Like despite low market share they are happy selling less for more.
 
Putas said:
Great year all things considered.
I found it interesting how they said gaming graphics is currently produced below sale demand. Like despite low market share they are happy selling less for more.
Click to expand...
Gaming includes semi-customs where there's still more demand than supply I think (haven't read the transcript yet)
 
In the investor call AMD said they've been undershipping since Q3 and will continue to do so (in lesser extent) in Q1 to avoid inventory congestion

Both quotes from Lisa Su
Yes. So maybe just to make sure that we're just correlating the numbers. So my comment about PC TAM being down 10% was assuming, if you take a look at sort of what IDC just published for - in 2022 at about 290 million units, and that's more of a sell-through TAM versus a sell-in TAM. So we have been under shipping sort of the sell-through or consumption for the last two quarters in an attempt to renormalize that as soon as possible.

In terms of do I think its conserve - I think it's in the ZIP code. I think it's in the ZIP code. So if you imagine 2023 sell-through TAM of about 260 million units, plus or minus, seems to be about the right number. We have made good progress in inventory normalization. We want to be cautious, obviously, heading into the year just given the macro environment. First quarter, we said would be roughly seasonal for PCs.
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Sure, Mark. So we - so the first - the second question, yes. We do believe the first quarter is the bottom for our PC market - for our PC business, and we'll see some growth in the second quarter and then a seasonally higher second half. In terms of the under shipment, I mean, I think we're - we undershipped in Q3, we undershipped in Q4. We will undership, to a lesser extent, in Q1. So I think you can infer that from our guidance single-digit down.

And then we'll be back to a more normal environment. Now just as a reminder though, the first half is not usually a - the first half is usually a seasonally weak client time anyways. So, we would expect more lift in the second half, not so much in the second quarter.
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Putas said:
I found it interesting how they said gaming graphics is currently produced below sale demand. Like despite low market share they are happy selling less for more.
Click to expand...
When it comes to AMD's Gaming Business, there was a mixed bag. On the one hand, the unit earned $1.6 billion in revenue (down 7% year-over-year) and $266 million in profits (down from $407 million in Q4 2021). But on the other hand, this strong result was achieved primarily because AMD managed to sell loads of system-on-chips for consoles, whereas the sales of its graphics processors for discrete desktop PC GPUs were down year-over-year.

AMD's client CPUs also saw a decline in sales. In Q4, the revenue of AMD's Client Computing Business dropped to $0.903 billion, or 51% year-over-year drop. The business unit lost $152 million, whereas in the same quarter a year before, it posted a $530 million profit.

However AMD had a stellar Data Center and Embedded results.

(quoted from the article)

www.tomshardware.com

AMD Posts Strong Results on Robust EPYC Sales As Consumer CPU Sales Disappoint

AMD posts record $23.6 billion full year 2022 revenue.
www.tomshardware.com www.tomshardware.com
 
Operating expenses shows the main issue. Spending a lot on 5nm wafers and not selling very much of that product yet.
Gross margins is also interesting, with the big hit in the Client Segment. That should obviously change towards the middle of the year with a full desktop and laptop lineup out.
Overall, they really need to start hitting 50-55% GM so their OM can hit +30%.
I would expect a bumpy year, but a very strong 2H '23 as long as the market/economy holds.

Where I am at, we went into neutral back at the end of Q2 '22. I was expecting a big downshift for us in Q4 but it never came. So hopefully that is a good sign.
 
LordEC911 said:
Where I am at, we went into neutral back at the end of Q2 '22. I was expecting a big downshift for us in Q4 but it never came. So hopefully that is a good sign.
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That's good to hear. If you don't mind sharing, would you say you are upstream or downstream of the chain from a company like AMD?
 
Putas said:
I stand corrected, under-shipping does not mean to ship below demand.

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That doesn't really explain it though. If they reduced prices to distributors they would not just buy 10 (in the example) they would but 20 lower their prices and still sell 100 a month. This is absolutely being done to try and keep average along prices high. It is what happens when we get a market like this. There just isn't enough competition. Arent they all using TSMC this generation for GPUs? TSMC that says they have to much capacity. The price could be lowered along the entire chain and demand would increase but they can also just keep prices artificially high as long as possible. I would imagine it is the distributors who lose out in this scenario as they probably only make a small profit per card so selling many more at lower prices would help them but cut into margins upstream. When best but lowered prices they sold out instantly. Prices of ssds have dropped precipitously. Last I looked I still didn't see an arc GPU at MSRP even.
 
Sxotty said:
If they reduced prices to distributors they would not just buy 10 (in the example) they would but 20 lower their prices and still sell 100 a month.
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They would only sell 20 a month since the other 80 would be sitting at old prices.
Also you presume that prices can just be lowered at an arbitrary point to any value?
The idea of any manufacturing is not in selling the most amount of what you manufacture, it's in actually making a profit on this.
What you're proposing is basically to sell low end GPUs instead of high end ones - but they are being sold already.
 
More revised dGPUs market share numbers for Q4: NVIDIA 85%, AMD 9%, Intel 6%.

www.hardwaretimes.com

Intel Shipped Fewer dGPUs than AMD in Q4 2022, JPR Clarifies

A while back, it was reported that Intel had matched AMD’s discrete graphics card shipments in the last quarter of 2022, a feat that many couldn’t believe. It turns out it wasn’t the case, and the number included the 60,000-plus Ponte Vecchio dGPUs meant for the Argonne National Laboratory...
www.hardwaretimes.com www.hardwaretimes.com
 
ukdaily.news

AMD did not intend to prepare a response to the NVIDIA GeForce RTX 4090. Company employees present the reasons for the decision - UK Daily News

Previous generation graphics cards offered similar performance in classic rasterization. Both the AMD Radeon RX 6950 XT and the NVIDIA GeForce RTX 3090 Ti
ukdaily.news ukdaily.news
Rick Bergman and David Wang gave an interview to the Japanese portal ITMedia. When discussing the RDNA 3 and CDNA 3 architecture, they were asked why AMD did not decide to prepare a system whose performance would allow it to better compete with the NVIDIA RTX 4090 graphics card. It turns out that it was possible, but AMD did not want to launch the model on the market , which would draw more power and cost over $1,000.

“In technical terms, it was possible to prepare a unit with similar performance. Designing the GPU this way led to the launch of a 600W TDP model for $1600, which was accepted by gamers. We thought about it, but decided not to adopt such a strategy. The graphics card should offer high performance without having to replace the power supply and case, while maintaining the appropriate temperatures. The fastest models in the Radeon RX series are designed with these principles.” – commented Rick Bergman, AMD EVP.
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