Question AMD 1Q21 Earnings Results

[DisEnchantment]

With the current projection (which is obviously not set in stone) these will become a niche market and ARM will take most of the hyperscaler market via going vertical (e.g. designing their own chips). That's at least half the market

Not sure about most hyperscalar market, Tencent and Alibaba would definitely not be using any ARM or x86 chips within 5 years that is for sure. Both have own in house designs.
Azure and GCP are currently not developing anything for now for use in public facing instances.
Leaves only Amazon for now. IBM and Oracle in the future?

I want to add that some companies providing IT equipment are using in house design too, like Seagate's RISC-V design, You can read it here

RISC-V | Seagate US

Seagate engineers built a system on a chip, demonstrating a custom RISC-V processor as functional in hard drives.

www.seagate.com

 

[Gideon]

Not sure about most hyperscalar market, Tencent and Alibaba would definitely not be using any ARM or x86 chips within 5 years that is for sure. Both have own in house designs.
Azure and GCP are currently not developing anything for now for use in public facing instances.
Leaves only Amazon for now. IBM and Oracle in the future?

I want to add that some companies providing IT equipment are using in house design too, like Seagate's RISC-V design, You can read it here

RISC-V | Seagate US

Seagate engineers built a system on a chip, demonstrating a custom RISC-V processor as functional in hard drives.

www.seagate.com

Forgot about Tencent and Alibaba, but going in-house is still a decline for x86.

I was pretty much only going by the rumors that Google and Microsoft are both also evaluating their own ARM chips. Let's wait and see. Regardless, this looks to be an even bigger issue for Altera than AMD/Intel.

And I agree that RISC-V will rear it's head as well. In greatly accelerated fashion, should Nvidia's buy of ARM succeed.

 

[jpiniero]

Azure and GCP are currently not developing anything for now for use in public facing instances.

Definitely sounds like they both are. Whether they are using ARM or RISC-V or something else is the main question.

 

[DisEnchantment]

I am mainly Azure customer, they have their own skunk works for sure. I believe they could be having their own designs. But MS of today in general is a good partner, they dont shaft their partners on a whim and they dont mind to cooperate. If they have something would be like some custom blocks like Pluton or something which AMD Semi Custom division would accept without a second thought.
But for GCP I would not be that confident, Google is too experimental. I am sure they have ARM designs already but they are too busy tinkering with many things. And can drop it as soon as they find something else more interesting to play with.

 

[B-Riz]

So did SPARC, so does PowerPC (that's still around but certainly losing ground).

I agree that there are loads of enterprise clients that won't switch even in a decade, even if ARM were 5x faster (I know companies where just the x86 -> x64 transition took 10 years). These will never be the majority of the market though.

With the current projection (which is obviously not set in stone) these will become a niche market and ARM will take most of the hyperscaler market via going vertical (e.g. designing their own chips). That's at least half the market.

If you look at computer science (not the degree, but how digital computers do things compared to organic computers (brains)) ARM and x86 are just two sides of the same coin.

The race is for efficiency and building stuff for general purpose workloads vs very specific workloads.

Most big problems have been solved, CPU's being fancy calculators and all.

I just don't see x86 fading away at all, but I do see ARM gaining ground in appropriate workloads.

 

[NeoLuxembourg]

You guys seem hyped by all the big companies going in-house CPUs ... I only see less options for the DIY market as all those companies are struggling to get fab space ... scary!

 

[Doug S]

The threat is not from ARM Ltd. mainly, but big Customers like Amazon, Tencent, Alibaba developing everything in house. They could be using RISC-V if they wish.

Too late, Loongson in China has already developed a brand new ISA that isn't ARM and isn't RISC-V. They wanted something that is totally outside the power of western company/government interference. ARM (or RISC-V) proponents should not be looking at China for future growth, China is likely to be migrating away from ARM/MIPS/RISC-V quickly by the middle of the decade.

https://www.tomshardware.com/news/loongson-technology-develops-its-own-cpu-instruction-set-architecture

 

[Gideon]

You guys seem hyped by all the big companies going in-house CPUs ... I only see less options for the DIY market as all those companies are struggling to get fab space ... scary!

Don't mistake seeing potential future tendencies for excitement.

I for one don't like the vertical integration that's happening at all. I'm particularily sad that Apple, from all companies, builds the CPUs with the best IPC and power efficiency (and by a large margin).

But it's also stupid to ignore facts and likely outcomes just because you don't like them.

Several long term trends are appearing , that obviously can and will turn out different than predicted ... but many people still seem to be in denial with already known facts, let alone very clear near-term trends. (Less on this forum but loads more in tech twitter, progrsmmer and gamer communities)

We don't know how it will look i 5 years but in all likelyhood both server and laptop market will be considersbly more vertically integrated and much less x86 exclusive

 

[Panino Manino]

I had thought that with the coming 5nm production at TSMC for the next AMD CPUs that the supply for the new consoles would be freed, but no, Sony said that they don't expect a significant improvement in the production anytime soon.

 

[Mopetar]

I had thought that with the coming 5nm production at TSMC for the next AMD CPUs that the supply for the new consoles would be freed, but no, Sony said that they don't expect a significant improvement in the production anytime soon.

AMD still has a massive amount of Zen 3 products that haven't even been announced yet, never mind the massive GPU shortage that's plaguing everyone. Even if Sony and Microsoft didn't want to increase their own orders, there are a lot of things that AMD could be doing with 7nm wafers right now. I'm not even sure that having 5nm products will allow them to reach some kind of equilibrium.

 

[LikeLinus]

AMD still has a massive amount of Zen 3 products that haven't even been announced yet, never mind the massive GPU shortage that's plaguing everyone. Even if Sony and Microsoft didn't want to increase their own orders, there are a lot of things that AMD could be doing with 7nm wafers right now. I'm not even sure that having 5nm products will allow them to reach some kind of equilibrium.

Who's going to produce them? TSMC has already announced they will have supply issues into 2022.

Chip manufacturer TSMC warns shortages could continue through 2022 - The Verge

 

[AkulaMD]

Who's going to produce them? TSMC has already announced they will have supply issues into 2022.

Chip manufacturer TSMC warns shortages could continue through 2022 - The Verge

Perhaps the announced shortages was made after they took AMD (and other major customers) growing orders into consideration?

 

[B-Riz]

Who's going to produce them? TSMC has already announced they will have supply issues into 2022.

Chip manufacturer TSMC warns shortages could continue through 2022 - The Verge

Everything is planned years in advance, there is no negative I see with TSMC at 100% productivity.

There is no production issue with AMD, Zen3 was launched and continues to launch and sell products across a broad portfolio.

A production issue is Intel not getting on 10nm years ago; now everyone wants to buy the AMD stuff because Intel fooked up so bad.

 

[LikeLinus]

Perhaps the announced shortages was made after they took AMD (and other major customers) growing orders into consideration?

I find it odd that it can be said "massive amount of Zen 3 products" while the manufacture is currently dealing with supply issues and has gone as far as to say that there will continue to be issues into next year.

"In 2023, I hope we can offer more capacity to support our customers. At that time, we’ll start to see the supply chain tightness release a little bit.” TSMC.

Using TSMC isn't a negative and is an advantage for AMD right now, but it's a bit silly to suggest there is no negative with the current supply issues and trying to ignore or talk around the fact that even TSMC itself said it is having supply issues, well that's just silly.

 

[B-Riz]

I find it odd that it can be said "massive amount of Zen 3 products" while the manufacture is currently dealing with supply issues and has gone as far as to say that there will continue to be issues into next year.

"In 2023, I hope we can offer more capacity to support our customers. At that time, we’ll start to see the supply chain tightness release a little bit.” TSMC.

Using TSMC isn't a negative and is an advantage for AMD right now, but it's a bit silly to suggest there is no negative with the current supply issues and trying to ignore or talk around the fact that even TSMC itself said it is having supply issues, well that's just silly.

Being able to supply extra mfg when there is no extra mfg to meet a demand way beyond expectations / predictions is not really a problem, just, pandemic side effect.

AMD did not expect to sell through the initial run of retail 5k series as quickly is they did and then demand to remain so high for them. It was / is not normal compared to all the past Zen launches. Go look it up, it is all out there.

 

[LikeLinus]

Being able to supply extra mfg when there is no extra mfg to meet a demand way beyond expectations / predictions is not really a problem, just, pandemic side effect.

AMD did not expect to sell through the initial run of retail 5k series as quickly is they did and then demand to remain so high for them. It was / is not normal compared to all the past Zen launches. Go look it up, it is all out there.

The bold basically proved my point. You have someone saying they have a massive amount of Zen3 products coming, but they can't even support their current demand and the issue is only going to continue into 2022, according to the manufacture.

The point is only proven by the fact that Sony and MS knew what demand there was for both consoles. They've both had the same issues because they are relying on TSMC on the supply chain and it just hasn't been able to keep up with all the demand. That's my only point and it doesn't make sense to say "oh we have all these products coming!", when they can't even meet the demand now.

Also, if AMD didn't realize in Nov. that demand was going to be huge? That's just poor forecasting on their part. They knew the 3k series were selling well and performing well. They also knew about the pandemic and the rise in WFH and overall demand. Plus they were touting these huge performance gains. Plus, we're 6 months later and some parts are still almost impossible to get.

At the end of the day, the demand is a good problem to have. I was just point out the silly comment that AMD has "massive amounts" of products ready to go. That's great and all, but we are talking in circles and no one has still been able to answer the question

"Who's going to produce them? TSMC has already announced they will have supply issues into 2022."

That's what I specifically asked. TSMC can't automatically ramp up manufacturing when they don't have the facilities to spare. So making that statement is a bit silly.

 

[B-Riz]

The bold basically proved my point. You have someone saying they have a massive amount of Zen3 products coming, but they can't even support their current demand and the issue is only going to continue into 2022, according to the manufacture.

The point is only proven by the fact that Sony and MS knew what demand there was for both consoles. They've both had the same issues because they are relying on TSMC on the supply chain and it just hasn't been able to keep up with all the demand. That's my only point and it doesn't make sense to say "oh we have all these products coming!", when they can't even meet the demand now.

Also, if AMD didn't realize in Nov. that demand was going to be huge? That's just poor forecasting on their part. They knew the 3k series were selling well and performing well. They also knew about the pandemic and the rise in WFH and overall demand. Plus they were touting these huge performance gains. Plus, we're 6 months later and some parts are still almost impossible to get.

At the end of the day, the demand is a good problem to have. I was just point out the silly comment that AMD has "massive amounts" of products ready to go. That's great and all, but we are talking in circles and no one has still been able to answer the question

"Who's going to produce them? TSMC has already announced they will have supply issues into 2022."

That's what I specifically asked. TSMC can't automatically ramp up manufacturing when they don't have the facilities to spare. So making that statement is a bit silly.

These are not really massive amounts of products, just updates to phase out the 4k series for OEM computers, HP, Dell, Lenovo, etc.

Current demand is way over what was projected, across the board, there is nothing that can be done to "make it right" because it requires billions of dollars and years to build fabs that no one knew they needed pre-pandemic.

There is no poor forecasting here, AMD planned according to past launch performance, like all companies. Sony and MS have the same problems, need more mfg, but it is not there. Odds are they had contract options to secure production if needed, and they exercised it, pausing the capacity release of chip mfg that AMD might have picked up.

There are staggered product releases. Halo products first, then all the OEM products are trickled out. The release and production mix was finalized way before the pandemic was known, or could be planned for.

I was looking for an AMD 5k APU pre-built last night, HP has shipping date as end of May, which makes sense if the products were announced at the beginning of the year and they need a few months to clear out the old AMD 4k APU systems already built.

TSMC is not ramping up production, AMD is changing their production mix to new 5k APU's and just enough 4k APU's for warranty purposes.

TSMC has supply issues insofar as they cannot supply any more chip mfg because there is no more fab space and fabs take years to build. The pandemic increased demand way over what ANYONE could have reasonably expected.

SO, AMD is changing what TSMC is producing for them based on product life-cycles.

TSMC in general cannot increase fab space on the fly and supply the extra chips the market wants right now as that is a physical limitation of silicon mfg.

 

[moinmoin]

The point is only proven by the fact that Sony and MS knew what demand there was for both consoles.

They actually didn't, both projected less demand and as such ordered less than they now would like to have.

These are no supply issues but planning and projection issues. Were AMD, Sony, MS, all the car manufacturers etc. correctly projecting the current demand a couple years ago, TSMC could have adapted to that demand and invested in more capacity accordingly. But of course nobody was expecting the effect the pandemic has, car manufacturer even ditched their orders and now complain about not being able to get that back.

 

[LikeLinus]

They actually didn't, both projected less demand and as such ordered less than they now would like to have.

These are no supply issues but planning and projection issues. Were AMD, Sony, MS, all the car manufacturers etc. correctly projecting the current demand a couple years ago, TSMC could have adapted to that demand and invested in more capacity accordingly. But of course nobody was expecting the effect the pandemic has, car manufacturer even ditched their orders and now complain about not being able to get that back.

AMD: New CPU’s Market Share Gains Could Be Limited to Supply Issues (yahoo.com)

You must post personal commentary along with links in the CPU sub-forum.

AT Mod Usandthem

 

[andermans]

AMD: New CPU’s Market Share Gains Could Be Limited to Supply Issues (yahoo.com)

Planning/projection mistakes (though with the knowledge of back then we wouldn't have seen the covid effects anyway) a couple of years ago result in supply not meeting demand right now. "supply issue" in most of things here is "supply cannot cover demand", doesn't mean that TSMC isn't still producing a ton of chips.

Furthermore, even if TSMC as a whole has a shortage customers that estimated their needs right and made appropriate reservations will not notice as much as often during times like this allocations & reservations in advance are given priority.

 

[scineram]

AMD doesn't have the volume yet to really hurt Intel so I'm sure Intel's digestion comments are true to some extent, but they are definitely trying to use it to mask the fact that they are both losing market share to AMD and ARM solutions as well as having to offer significant discounts in the presence of stiff competition.

Looking at DC and other margins I think they have started to hurt, but covered up by market increase.

AMD's console/semi-custom revenue isn't expected to see significant growth (and will most likely shrink) in the next few years, so almost all their growth should be CPU/GPU related and most likely heavy on the CPU.

Until now they had no real competitive GPU for half a decade, nothing on the high end. So ilI think GPU growth will be significant part.

 

[Doug S]

I found it interesting that Apple is only warning about potential supply constraints for iPads and laptops - reportedly this is over LCD display drivers which are not made in a leading edge process. Dunno where the ones they use are made. Maybe one of the fabs in Texas affected by the power outages a couple months ago, or the Renesas fab affected by fire? Apple is pretty good about making sure they have what they'll need by prebuying huge capacities of critical components like flash, RAM, etc. Maybe they assumed a commodity like display drivers would never be in a shortage?

Anyway, despite wildly exceeding even the most optimistic analyst expectations for sales of iPhone, iPad and Mac they've obviously had no problems getting sufficient 5nm wafers from TSMC to meet those large volumes. Either Apple's internal projections were way ahead of where analysts were (since they have not been giving guidance during the pandemic, analysts are left guessing in the dark) or their agreement with TSMC is pretty flexible. Obviously every leading edge wafer delivered to Apple is one less for everyone else, so a flexible agreement allowing Apple to get more when their sales increase is bad news for everyone else. But maybe that's what paying years in advance for leading edge capacity gets you.

 

[moinmoin]

I found it interesting that Apple is only warning about potential supply constraints for iPads and laptops - reportedly this is over LCD display drivers which are not made in a leading edge process. Dunno where the ones they use are made. Maybe one of the fabs in Texas affected by the power outages a couple months ago, or the Renesas fab affected by fire? Apple is pretty good about making sure they have what they'll need by prebuying huge capacities of critical components like flash, RAM, etc. Maybe they assumed a commodity like display drivers would never be in a shortage?

Anyway, despite wildly exceeding even the most optimistic analyst expectations for sales of iPhone, iPad and Mac they've obviously had no problems getting sufficient 5nm wafers from TSMC to meet those large volumes. Either Apple's internal projections were way ahead of where analysts were (since they have not been giving guidance during the pandemic, analysts are left guessing in the dark) or their agreement with TSMC is pretty flexible. Obviously every leading edge wafer delivered to Apple is one less for everyone else, so a flexible agreement allowing Apple to get more when their sales increase is bad news for everyone else. But maybe that's what paying years in advance for leading edge capacity gets you.

Apple's ability for apparently correctly projecting future demand and ensuring no bottlenecks in its whole supply chains is second to none in all kinds of industries. I can imagine that Apple does include quite a bit of optimistic overhead capacity for "worst case" best case scenarios that are then paid off as investment into future capacity (like TSMC is essentially building the initial capacity of each node specifically for Apple, and very likely is paid well for doing so regardless of later utilization). For this reason it would indeed be interesting to hear details on what caused the potential supply constraints for display drivers.

 

[B-Riz]

I found it interesting that Apple is only warning about potential supply constraints for iPads and laptops - reportedly this is over LCD display drivers which are not made in a leading edge process. Dunno where the ones they use are made. Maybe one of the fabs in Texas affected by the power outages a couple months ago, or the Renesas fab affected by fire? Apple is pretty good about making sure they have what they'll need by prebuying huge capacities of critical components like flash, RAM, etc. Maybe they assumed a commodity like display drivers would never be in a shortage?

Anyway, despite wildly exceeding even the most optimistic analyst expectations for sales of iPhone, iPad and Mac they've obviously had no problems getting sufficient 5nm wafers from TSMC to meet those large volumes. Either Apple's internal projections were way ahead of where analysts were (since they have not been giving guidance during the pandemic, analysts are left guessing in the dark) or their agreement with TSMC is pretty flexible. Obviously every leading edge wafer delivered to Apple is one less for everyone else, so a flexible agreement allowing Apple to get more when their sales increase is bad news for everyone else. But maybe that's what paying years in advance for leading edge capacity gets you.

I think I heard about the display driver production issue on NPR Marketplace or something earlier in the month, but here is an article for reference for other people.

I chuckled about the $1 chip holding up most consumer electronics now; no Xbox or PS5? dang $1 chip got us

Shortage of $1 display driver chips is causing production delays for everything with a screen

A global shortage of chips has wreaked havoc on the supply chains of the tech and auto industries. This has caused many companies to scale back production...

www.techspot.com

"The shortfall is already visible in the doubling of prices for large LCD panels over the last year. Himax Technologies CEO Jordan WU told Bloomberg "I have never seen anything like this in the past 20 years since our company's founding."

Himax, alongside MagnaChip, Samsung, Novatek, FocalTech Systems, Synaptics, Raydium, MediaTek, and Silicon Works are among the key players in the display driver IC market, which was worth $7.1 billion in 2019 and is expected to reach $9.1 billion by 2023.

Wu explained that making more display driver ICs isn't possible as these are all fabless companies depending on foundries like TSMC, which have relatively limited production capacity for older process nodes that are typically used for fabrication.

Furthermore, building additional capacity and more advanced process nodes is too expensive and risky to make economic sense, which is why most of these companies are perfectly happy with mature process nodes where equipment has already depreciated and allows them to supply display driver ICs at a lower cost. As it is, demand for everything with a screen has only increased over the last year, so electronics aren't going to get any cheaper until we buy fewer of them."

 

[moinmoin]

Direct link to the actual Bloomberg report, well worth the read:

Why Shortages of a $1 Chip Sparked Crisis in Global Economy

To understand why the $450 billion semiconductor industry has lurched into crisis, a helpful place to start is a one-dollar part called a display driver.

www.bloomberg.com