CES, known as the "auto show", ended recently, and there are still many cars at this year's CES show, but three conferences by three technology companies fired the first shot at changes in the semiconductor industry: Intel's 10nm, NVIDIA Corp's RTX 2060, and AMD's 7nm.

I wrote an article earlier.Blow Boinvida.Why did AMD's share price flicker in 2018? why on earth did AMD rise so much? Let's take a closer look.

From the bottomAMDGrowth history

"ordinary family" AMD

Looking back on the development history of CPU, we should start from the departure of several talented people from Xiantong Semiconductor. In 1968, Noyce, the inventor of the integrated circuit, and Moore, the creator of Moore's Law, left Fairchild Semiconductor and founded Intel. The following year, Fairchild Semiconductor salesman Sanders founded AMD. These two companies have written the entire history of CPU.

Due to the different backgrounds of their founders, the two companies take different routes. AMD lacks technical support in the early stage, so it can only rely on the strategy of low price to win the second supplier of all kinds of products. On the other hand, Intel is based on X86 instruction set technology.

In terms of technology and capital, what can we do if we cannot compare with Intel,AMD?Then we can only wait for the opponent to make a mistake.

Short overtaking

At the end of the 20th century, Intel previously abandoned the compatibility interface out of its own strategic considerations and tried to unify the market, but the market did not buy it. AMD firmly supports compatibility interfaces and preemptively released the processor of the main frequency 1GHz in 2000, which bought a lot of people.

After the millennium, AMD released Athlon 640 (Speed Dragon)This landmark processor is the first time in AMD's history that it leads Intel.During the same period, the poor performance of Intel's third-generation Pentium 4 gave AMD a chance. The 2005 dual-core Athlon 64 X2 also mocked the "fake dual core" of Intel Pentium D. From 2003 to 2006, AMD was in high spirits, while Intel suffered a lot.By 2006, AMD's market share was 50-50 that of Intel.

However, Intel did not sit idly byThe Tick-Tock strategy was proposed in 2006.The process is upgraded every two years. Since then, Intel has ushered in an era of technological suppression of AMD.

At this timeAMD entered the graphics card market through the acquisition of ATI at a high price, and has since become a technology company with both CPU and graphics card business.. But CPU is crushed by Intel technology, the performance of graphics card is depressed, and AMD falls into recession.

Lose one's self

AMD is usually called "agricultural enterprise". The most obvious feeling is a kind of intimacy, a sense of intimacy on price.AMD is cost-effective.As a result, gross profit margins are far lower than those of competitors NVIDIA Corp and Intel.

The gross profit margin of AMD is really embarrassed to say that it is engaged in semiconductors (the gross profit of others making mustard is more than 40%). In contrast, NVIDIA Corp and Intel have maintained their gross profit margins above 60% in the past two years, and they are relatively close.

Further observation of the operation of AMD since 2006, we take NVIDIA Corp as the object of comparison, as for Intel, it is not an order of magnitude.

It is said that NVIDIA Corp, who was on the brink of bankruptcy at that time, also turned to AMD for help, but AMD did not choose Huang Renxun. AMD had the strength in 2006, with revenue 84 per cent higher than that of NVIDIA Corp. However, the net profit situation is very worrying, and its vitality has been greatly damaged after the huge losses in 2007 and 2008. We can know one or two by the cash flow of its business activities.

On the other hand, Lao Huang's NVIDIA Corp worked steadily, and both revenue and net profit increased steadily after the financial crisis.Finally realized the anti-surpassing in 2015.. Ten years to the east, ten years to the west. In 2017, NVIDIA Corp's revenue was about 82.3% higher than that of AMD, and AMD could not even catch up with the taillights. It can be said that "it is never too late for a gentleman to take revenge."

After a long period of losses, AMD made a profit again in 2017 and recorded positive cash flow from operating activities. But if you look carefully, the revenue figures for 15, 16 and 17 are not as good as those for 12, 13 and 14 years. It can be seen that the market share is further squeezed, the processor is hoisted by Intel, and the graphics card is ravaged by NVIDIA Corp.

Although in the CPU, GPU market are "second", but this "second" is sympathetic.

Now the turned serf sings?

Everyone likes to hear the counterattack story of winning more with less and using the weak against the strong, and the capital market is no exception. The role played by AMD is like a "weak" who is ready to counterattack.

Capital markets praised AMD in 2018, with some analysts calling AMD a "decade of turnaround". Indeed, the annual increase of 79.57% outpaced the others, making the decline of old enemy NVIDIA Corp 30.79% humiliating.

Consumers are also applauding. After all, they are fed up with Intel's long toothpaste squeeze and NVIDIA Corp's domineering prices.

CPU、GPUTwo blossoms

In early 2018, the "mining tide" hit, first let NVIDIA Corp and AMD taste the benefits, but then "high positions were trapped", a large inventory backlog.

NVIDIA Corp is the most miserable, after all, the graphics card is its lifeblood. Its inventory situation has deteriorated rapidly since 2018Q1, with Q2 up nearly 40% month-on-month, and Citron stabbed it at this time.

The overall inventory trend of AMD is similar to that of NVIDIA Corp, but the range is relatively small. This is thanks to the dual main business of AMD, and the best-selling CPU masks the inventory pressure of GPU. The company's third-quarter 2018 report also mentioned that the sharp dragon CPU sales were booming, but the Radeon graphics card was holding back.

When it comes to CPU, we have to mention Ryzen. The Ruilong 72700X, which is praised as the product of the year by many people this year, is the representative work of AMD's CPU turnaround. The processor is based on AMD's "Zen+" architecture, 8 cores and 16 threads, using 12nm technology.Are you surprised? are you surprised? It is so sudden that the AMD process surpasses Intel.Changing the contract factory from Global Foundries to Taiwan Semiconductor Manufacturing Co Ltd has achieved immediate results. Taiwan Semiconductor Manufacturing Co Ltd is worthy of the great savior of the semiconductor industry.

If the parameters are compared carefully, the multicore performance of this CPU is better than that of Intel Core i7-8700K, and there is no significant difference in single core performance.But the price is better.. Too many consumers have lost patience with Intel, which is a good thing for AMD.

Analysis of future growth points

According to the statistics of Statista, although the revenue growth rate of the global semiconductor industry fluctuates periodically, the overall trend remains positive.After all, technological change is the driving force behind the development of the industry.By looking at the trend chart of the Philadelphia Semiconductor Index (SOX) over the past five years, the overall upward trend remains unchanged and is now more like a short-term correction.

After talking about the environment, let's analyze the AMD business.

Data center service

In November 2018, AMD released EPYC (Xiaolong) processor based on the new Zen 2 architecture and 7nm technology. This is the first model in the world.7nmThe server processor of craft, the industry giant throws an olive branch to AMD EPYC one after another.

AMD predicts that the market share of servers will rise to 5% by the end of 2018. Intel will do meritorious service again. AMD has played CPU and GPU in the server market this time. Although the major securities firms are optimistic about this data center business, repeatedly emphasizing the core growth logic of "EPYC+Ryzen", we feel that we should not be so optimistic.

At present, the X86 server market is basically monopolized by Intel, and EPYC cannot be expected to turn against the wind.What's more, Intel finally released the 10nm server CPU on CES2019.Oh, the tiger has finished taking a nap. Last quarter, Intel reported a 26% year-on-year increase in data center revenue.

In the GPU server market, according to Tianfeng, NVIDIA Corp accounts for more than 90% of the market share, and its ASP is also 67% higher than AMD.

Now there are a lot of new start-up forces in the server market, as well as AI chips that Internet giants are developing, which may open the server chip market in the future, and don't forget that ARM servers are also eyeing covetously.

Mainframe game service

The console game business is actually AMD's long-term cash cow.At present, the main players in the mainframe market are Nintendo, Sony Group Corp and Microsoft Corp. The Switch launched by Nintendo in 2017 quickly became popular all over the world, and its SoC is NVIDIA Corp's Tegra X1. The SoC of PS4 and Xbox One is both AMD. Annual sales of PS4 and Xbox One remain stableWhen PS fans and Xbox loyalists compete with each other, AMD may be the biggest winner.

First of all, in view of the age of PS4/PS4 Slim and Xbox One S, high-end PS4 Pro and Xbox One X relay become the main force of mainframe shipments, AMD revenue and profits will benefit.

Second, the next generation of hosts will be available as soon as 2020 at the earliest. At this CES exhibition, the head of Microsoft Corp's Xbox department is the AMD platform, and Sony Group Corp will continue to cooperate with AMD if nothing happens there.

In addition, the carrying capacity of the exclusive game should not be underestimated. Marvel Spider-Man, exclusively owned by PS4 in 2018, was released more than three months ago and sold more than 9 million copies, helping PS4 sell more than 5.6 million units during the Christmas shopping season. Switch's recent exclusive game "Nintendo Star Battle" has become popular in Europe and the United States, with sales of more than 3 million copies in the United States 11 days after its release, boosting Switch sales in Europe and the United States.

Consumption gradeCPU、GPUBusiness

According to canalys's latest forecast, following the positive growth of PC shipments in the single quarter of 2018, PC shipments will record positive annual growth in 2019. Coupled with the breakthrough in the manufacturing process, CPU and GPU are expected to end the era of squeezing toothpaste, which will bring a wave of machine replacement.We believe that the core growth point of AMD is still in consumer CPU and GPU business.

First, let's talk about GPU business. For AMD graphics cards, there is only one sentenceHe is angry and does not argue.. Previous generations of AMD flagships can still compete with NVIDIA Corp's 80Ti/ Titan, while last year's Vega 64 of GTX 1080 was released more than a year later.

Through the AMD January 2019 brochure, we can see that the market increment scale and stock scale of Radeon high-end cards are ahead of the ordinary cards of Polaris architecture. The development of the global e-sports movement has also contributed to the sales of high-end cards.

Well, AMD made a high-profile announcement at this CES exhibition.Radeon VII, the world's first 7nm game graphics card.. AMD is trying to get back everything he lost before. During the live demonstration, AMD claimed to be comparable in performance to Nvidia's RTX 2080. As soon as the news got out, onlookers said it smelled good. In view of the dissatisfaction caused by the high price of NVIDIA Corp dessert grade RTX 2060, the reduced Radeon VII may bring a lot of pressure to Lao Huang. But it is worth noting that NVIDIA Corp's RTX series graphics cards support RayTracing and DLSS, as well as the cost-effective GTX 1080 Ti after the price reduction. In addition, NVIDIA Corp RTX 2080 was sold in September last year, so Huang Renxun, who was interviewed after the AMD press conference, did not panic at all.

Just entering 2019, the third-generation sharp dragon sounded the bugle of counterattack. AMD has polished the Zen architecture for five years and has come to an end.

AMD announced at the CES exhibitionThe world's first 7nm with the new architecture of Zen 2, consumer CPU (the third generation of Ruilong), will be available in mid-2019.. According to the live demonstration of this product, AnandTech collated the comparison data with Intel's i9-9900K. Ruilong's Cinebench R15 multithreading score is 2057, slightly higher than Intel i9-9900K. What's surprising is thatThe power consumption is 30% lower than that of Intel.The biggest deficiency of AMD before is the problem of power consumption. Now the birth of this product has made consumers regain confidence in AMD technology. Everyone scanned the screen one after another."AMD,Yes! "

Revenue from AMD PC processors grew 53% year-on-year in 2019, according to Tianfeng, which could give a significant boost to AMD's revenue in fiscal year 2018 if the third-generation Ruilong market responds well. However, while being optimistic, there is also something to be wary of. CES 2019 Intel released 10nm's server CPUThe official release date given by 10nm's consumer IceLake is on Christmas Eve 2019, leaving a two-quarter window for AMD.

Summary

AMD and NVIDIA Corp's CEO are both Chinese-Americans and Taiwanese, and they both like to wear leather jackets and hold video cards for press conferences. But the difference isNVIDIA Corp reached the peak under the leadership of Huang Renxun, while AMD CEO Su Zifeng led AMD to the threshold of rejuvenation when she was appointed by the defeated army.。

The surge in AMD's share price in 2018 is largely due to the hope of its revival, but is it a flashback?2019 is a crucial year for AMDThe time window left for AMD 7nm CPU/GPU is not longThe development space of CPU/GPU business in data center is limited by Intel and NVIDIA Corp.

In 2020, the semiconductor industry will usher in a new change, and the shackles of the manufacturing process will eventually be opened.After the AMD window period, if we do not grasp the technical convergence, we may return to the era of being suppressed by Intel again.

Of course, only with competition can we have the driving force for technological innovation and promote the healthy development of the industry.