8/6/19 Waiting For Rome

AMD will launch Rome on August 7th, 2019. However, there has been no additional information regarding any details. If there will be a staged presentation live in SF, one would think there will be more of an announcement by now. Perhaps it will be a online release of specs and more info on partners etc. One more day to go!

So far, press has been very favorable for the highly anticipated Rome.

From CRN.com, here.

From the Nextplatform, here, and here.

Leaked benchmarks for Rome showed amazing power, here. We will find out soon enough, once the NDA is lifted.

AMD share price has taken a big hit since the Q2 ER. First there is the 2019 annual revenue guidance, which went down from the high to mid single digit growth from 2018. This decrease of roughly $200M was not well received, even though the shortfall is attributed to a higher than expected decrease in gaming console sale. Also, AMD did concede that there is a small hit from China, loss of THATIC royalty. The good news is that joint effort with Samsung will yield $100M for 2019, which is two years earlier than expected.

Samsung had revealed more details regarding this AMD-Samsung partnership, here. A new custom designed SOC from Samsung is expected in 2021, featuring Radeon RDNA, for use not only in the mobile space, but in other applications. This Samsung SOC explains the fact the AMD says it is more than IP, and that there is associated COGS. So AMD is designing this SOC, with Samsung. This is all very positive!

AMD then took another hit when the Fed did not lower rate aggressively, and hinted at no more future rate drops. Trump then joined the bashing party. He was not happy with the Fed, and right after the US-China negotiation ended in Shanghai, he tweeted that he is imposing 10% tariffs on an additional $300B Chinese import to US.

China had already made it very clear that China will not give in to threats, so this 10% tariffs will only push China away from any possible trade agreement.

Sure enough, China then stopped its effort to prop up the RMB, and allowed RMB to fall below the 7.0 mark, which has been a major psychological barrier.

On Monday, US stock market took a major dump, and the US upped the ante and named China as a currency manipulator, specifically, because China had stopped its intervention of propping up a falling RMB. Let’s read that sentence again. China had stopped its intervening effort to prop up RMB artificially, so now China is a currency manipulator.

Putting aside this US hypocrisy, it is clear what Trump is trying to achieve. He dearly wants to have a low interest rate environment for the US. Unfortunately he is walking a very fine line. His tax cut had resulted in both a booming stock market (due to all the stock buybacks) and a ever increasing US national debt. The Fed had to raise interest rates, but Trump doesn’t want that. His trade war with China will slow the world economy and force the Fed to cut rate more. At some point he will stop the trade war with China, and the economy will boom again, this time with low interest rate. He needs to time all these perfectly, for his re-election in Nov. 2020. If he drag this trade war out too long, it will be too late for the election. Meanwhile, he is earning brownie points from his supporters, who dearly want him to be “tough” on China.

One additional point. With the US national debt sitting at $22.5T and rapidly increasing, it is crucial to keep the rate low so that US can somehow manage to service all these debt. For example, with debt at $20T and rate of 2%, annual interest payment is $400B. With debt at $30T and rate of 4%, the interest payment is $1.2T! This is the upcoming debt crisis no politicians want to touch, ever.

On a happier note, AMD’s Radeon 5700 GPUs are doing very well. They are competing extremely well vs Nvidia’s mid-range cards. AIB cards are coming out this month, notably from XFX, Asus, Powercolor, MSI and Sapphire. These will provide better cooling solutions than the Radeon reference cards, which have blower type cooling.

One more day to Rome…

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