AMD, Inc. has announced financial results for the third quarter of FY2024, ending 28 September 2024. Revenue is up 17.6% compared to Q3 FY2023 at $6.8 billion. Individually, the Client and Data Centre businesses are doing well (up 29% and 122% respectively), however Gaming and Embedded are doing less well. Is this a business in continued transition?
Background
AMD, Inc. reported financial data on 31 October for Q3 FY2024, the period ending 28 September 2024. Total revenue grew by 17.6% to $6.82 billion, of which the Data Centre and Client segments saw the most improvement, increasing by 122% and 29%, respectively. Gaming and Embedded segments did not fare so well, declining by 69% and 25%, respectively. However, those two market areas now represent only 7% and 14% of the AMD business, as shown in Figure 3. We present the data in four graphs, labelled Figures 1 to 4.
Data Centre
The vast majority of AMD’s revenue growth is derived from strong demand for Instinct GPU and EPYC CPU products. Additionally, the Client segment, up 29% year-on-year, has seen strong demand for Ryzen Zen 5 processors. In the core business areas, AMD is firing on all cylinders, taking full advantage of the AI boom.
At the “Advancing AI” event held by the company in October 2024, AMD officially announced products that had been previewed at Computex 2024 earlier in the year. This includes the MI325X AI accelerator (and future models, including MI350 based on the CDNA 4 architecture) and the 5th generation EPYC data centre processor, codenamed Turin.
AMD claims EPYC now has a 34% market share, growing from a mere 2% in 2018, as shown in Figure 5. With up to 192 cores, support for 12 channel DDR5 DRAM, 128 PCIe 5.0 channels and CXL 2.0, AMD is undoubtedly hoping Turin will compete with the best Intel has to offer and improve that market share percentage.
AI
However, it’s probably the AI accelerator market where AMD is seeing the most improvement, with solid demand for MI300 series GPUs. AMD claims the upcoming MI325X can match or exceed the performance of NVIDIA H200 and will look to match NVIDIA’s cadence of product releases with a new GPU every calendar year.
MI300X is now available on Oracle Cloud Infrastructure (OCI) and some smaller players, including Vultr. While NVIDIA might lead this market by some margin, AMD is number two and easily beating Intel into third place. (Intel indicated that sales of Gaudi AI Accelerators wouldn’t reach $500 million in FY2024, with an additional $300 million of inventory write-downs).
The Architect’s View®
With significant growth across all Data Centre and Client business units, AMD is transforming into an enterprise-first company, leaving behind any dependency on the gaming business, which, as we’ve indicated, now accounts for only 7% of revenue. The recent partnership announcement with Intel to create an x86 Ecosystem Advisory Group only strengthens AMD’s hand, giving the company more input into the direction of its core products based on the x86 instruction set architecture.
AMD is not going to out-compete NVIDIA in the GPU market, but there does need to be a strong second player, as availability is proving to be an issue for all vendors. Having a second source is a vital requirement, although there is no direct compatibility between products (unlike x86) which means managing software compatibility. So, AMD’s GPU business will continue to grow.
In the general CPU business, AMD has delivered more cores and has been ahead on support for features such as the latest iterations of PCI Express. We now need to do a blow-by-blow analysis of EPYC against Xeon to see how the two compare. However, the market share gains alone should tell us that customers are clearly happy with EPYC as a product.
AMD is doing lots of things right and seeing the results in its revenue numbers.
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