This is all true, but it begins to beg the question of if they want to be in the regular consumer CPU space if the trend continues.
Say they go to 5nm or 6nm with new TSMC contract, and project they can sell their entire allotment in the HPC/Server side of things with perhaps a handful of R9 $1500 CPUs. Should they simply stop making everything else because it's less profitable? In terms of stock value and profit, the answer would be yes.
It would I believe come at a cost in consumer perception of the brand though. They would virtually cease to exist outside of back-office/b2b.
Yeah they aren't going to cut out PC. They understand that comercial sales. Specifically retail CPU and Laptops sales kept them going and completely removing themselves for that fall back would be terribly shortsighted. But I have stated before that I am pretty sure for every release they target a certain core value based on perf/$ comparisons to Intel's offerings. Intel and Nvidia tend to completely replace their lineups because in a position of superiority they feel they don't need to compete in pricing and that lowering the cost of the product at any point lowers the perception of their products. AMD doesn't do this, when TR3 came out they specifically said that TR3 was about adding onto their portfolio and not replacing it and that anyone wanting less cores or lower price into many of the platforms benefits TR1/2 were still available. So at this point Zen 2 products are like the old saying there are no bad products only bad prices. As long as their lower end products are well priced for their performance they are still a competitor in the low cost space. The only issue with their lineup really is the fact that you have to go back to the 3400G for a decent APU. What is and has been their strong point.
It has been stated over and over that their yields on N7 are excellent. At this point, they are already binning perfectly functional die down to lower levels for no other reason than contract obligations.
The point of a smaller die is the increased yields per wafer. Assuming that yields are constant, and that they are not packaging constrained, they will yield over 50% more usable dies from the same wafer while also relieving them from wasting functional six/eight core dies to meet their split obligations. This gives them a higher ASP on those wafers and more total volume per month.
I don't know if that is actually the case and if it is, its a good reason why they should cap that out at the 5600X. But for what you get in increased yields with a smaller die. You run into 3 issues. 1 reduced ASP per wafer. 2. Reduced availability of higher end dies. Before a certain amount of those dies were good for the in the case of the APU 5900HX, 5900HS, 5900H, 5800H, 5800HS, 5800U, 5600U, 5600H, 5600HS and so on. These are all CPU's that they get less of by using their allocation on another smaller die. If they have fantastic yields on wafers that produce these products using their allocation on something offering cheaper products seems wasteful in a finance way. 3. You still have defective dies, either less available cores, or less available GPU units. Chances of a die that isn't cut up (the edge dies) that doesn't fit the 5400U's requirements would be incredibly small. Meaning they can basically use every rectangular die that comes out of the wafer (within a certain level, there will still be some waste). Now you offer a smaller die but the defect rate stays the same, you would have even with fantastic yields, several chips that could be used. So now to maximize the use of the wafer they have to offer lower and lower priced products, maybe even offering CPU's that they were not interested in trying to sell in volume, like maybe getting away from 2c products.
Even if AMD had gone through the trouble of designing, sampled, finalized Die for this market. If there is any flexibility in their wafer allotment going into this gen. Not producing this die seems like a smart move. By the time availability settles enough that AMD needs to hit these markets with their latest and greatest tech, they can hold off by allotting higher end working dies to fill this market, or lowering the price of the higher end products. Both options are ones that AMD has done when needed and it will only need to hold them off till the next product cycle. The longer we get into this one with them not needing to do so increases the overall profitableness of the current dies compared to moving their allotment towards these lower ASP wafers.
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