Source: Wall Street News
Su Zifeng said that the MI300 has become the fastest growing product in AMD's history. This year's priorities will include expanding AI chip production capacity, and the PC and data center business is expected to return to growth, which will drive strong growth in AMD's revenue and gross margin this year.
On Tuesday local time,$Advanced Micro Devices (AMD.US)$CEO Su Zifeng revealed some important information during the earnings call for the first quarter of 2023.
She said AMD will share more details about the next generation of Instinct AI chips in the coming months, which will be launched as early as later this year. AMD will also launch a new generation of mobile processors codenamed “Strix” during the year.
Su Zifeng stressed that AMD's Instinct MI300 AI chip is in high demand, making it the fastest growing product in the company's history, achieving sales of more than 1 billion US dollars in less than two quarters.
Additionally, AMD's priorities this year will include expanding AI chip production capacity, and the PC and data center business is expected to return to growth, which will drive strong growth in AMD's revenue and gross margin this year.
The MI300 is in short supply, making it the fastest growing product in AMD's history
According to Su Zifeng, at present, more than 100 companies and AI customers are actively deploying the MI300X. This is a GPU-specific version of the MI300 chip.
In addition, a number of OEMs will use the MI300X system for mass production this quarter, including Dell, HP, Lenovo, and Ultramec. Cloud service providers such as Microsoft and Oracle are also increasing the adoption and deployment of AMD's Mi300x artificial intelligence chips.
She stated:
What we're seeing now is that existing customers and new customers are more visible about their commitment to the MI300.
This growing focus has made the MI300 the fastest growing product AMD has ever seen, achieving total sales of over $1 billion in less than two quarters.
However, the supply of the MI300 series was limited, which hampered sales growth. Su Zifeng admitted that if the supply was sufficient, the company could have sold more MI300 products. However, she expects supply conditions to improve every quarter of this year.
Su Zifeng said:
We are indeed in a tight supply situation, so there is no doubt that if we have more supply, there will be demand for this product, and we will continue to work to resolve these issues throughout the year. I'm very happy with how things have progressed.
New AI chips are coming soon, and AMD is catching up with Nvidia
Although Su Zifeng expressed satisfaction with the progress of the MI300, AMD had to face the fact that the Nvidia H200 recently began shipping, and a more powerful chip based on the next-generation Blackwell architecture will be launched later this year.
When asked how to compete with Nvidia, Su Zifeng said that AMD's strategy is not just a product, but a “multi-year, multi-generation” roadmap, and revealed that the company will share more details of the next generation of Instinct AI chips “in the coming months”. These chips will be launched as early as later this year.
She said:
We are confident in our ability to continue to be very competitive. Honestly, I think we're going to be more and more competitive.
PC and data center businesses are expected to return to growth
Su Zifeng also said that the PC business is expected to return to growth this year. Thanks to the beginning of the corporate renewal cycle and the popularity of AIPC, the company plans to meet this demand through an expanding portfolio of Ryzen series laptops and desktop processors.
Financial reports show that the client division's revenue in the first quarter, including PC sales, was 1.4 billion US dollars, up 85% year on year and 6.4% month on month. PC chip sales plummeted during the same period last year.
Su Zifeng said:
Based on the performance and efficiency advantages of our Ryzen Pro product portfolio, and more commercial PC series using AMD from OEM partners, we have a clear opportunity to gain more commercial PC market share.
AMD expects the company's Ryzen product line to receive a greater boost after launching a new generation mobile processor series codenamed “Strix” later this year.
The CEO is full of confidence, and investors are not buying it
AMD's profit situation has improved a lot compared to a year ago. In the first quarter, AMD's total revenue was 5.5 billion US dollars. Although it fell 11.3% month-on-month, it increased 2.2% compared to the same period last year. At that time, AMD revenue suffered a severe drop due to weak sales of PC chips and data center chips.
In the earnings conference call, Su Zifeng said that the company's good performance in the PC and data center sector has laid the foundation for its future development, and that revenue and gross margin will grow strongly this year. The last time AMD saw an increase in annual revenue was in 2021.
Our priorities for 2024 are clear: accelerate data center business growth by increasing Instinct GPU production capacity and expanding market share with our Epyc processors, launch next-generation Zen 5 PC and server processors to continue our leading position in performance, and launch a differentiated adaptive computing solution portfolio.
In terms of performance guidance, AMD expects revenue for the second quarter of this year to be about 5.7 billion US dollars, fluctuating up and down to 300 million US dollars. The midpoint of the range is equivalent to a year-on-year increase of about 6% and a month-on-month increase of about 4%, flat market expectations of 5.72 billion US dollars. Non-GAAP gross margin will further increase to 53%.
However, after the increase in AMD's annual sales forecast for AI accelerator chips, it was only 4 billion US dollars, far lower than competitor Nvidia, and the stock price decline deepened to 9% after the market.
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