According to Nasdaq.com, AMD short interest increased from 126 M shares on Sept 13, 2019 to 153 M shares on Sept 30, 2019, which is the highest level for the past twelve months. This could explain why AMD’s share price has been falling.
I had written in my Sept 10 blog:
“As I had written right after AMD’s Q2 EC, even though AMD had guided for a terrific H2; but until Q3 ER when real numbers are reported, people will be free to knock down AMD based on nothing but conjectures. Therefore, AMD will trade sideways until end of October, barring any significant news.”
My prediction came true. On top of the macro/China trade war issues, AMD was knocked down because of supposed supply constraint at TSMC, and even a rumor about clock speed problem delaying Ryzen 3950X. None of these AMD specific issues were real!
Meanwhile, significant news had occurred. Microsoft had picked Ryzen Mobile for its Surface Laptop 3 15”. If MS is willing to use an optimized Zen+ Mobile APU, then MS will definitely use the upcoming Renoir APU next year. Zen 2 mobile should be adopted by all the OEMs in much greater quantity.
AMD had also announced the release of Radeon RX 5500 series for OEMs, not just desktops but also mobile, the Radeon RX 5500M. This is reported by Anandtech, here.
According to AMD’s press release, availability is described as:
“Later this month, MSI is expected to launch the MSI Alpha 15 laptop, powered by Radeon™ RX 5500M GPUs. In addition, Radeon™ RX 5500 graphics cards are expected to be available in leading desktop gaming systems beginning in November 2019, including HP’S OMEN Obelisk and Pavilion Gaming desktops, as well as Lenovo Legion™ T530 and IdeaCentre™ T540 Gaming PCs. The Radeon™ RX 5500 graphics cards are expected to be available in Acer Nitro 50 PCs beginning in December 2019. AMD board partners are expected to launch standalone graphics cards this quarter (Q4 2019).”
This news is important for the following reasons. First, AMD is continuing to launch 7 nm products, even if they are not as lucrative as Epyc 2. These products are critical to AMD’s overall market strategy, but their gross margin is lower than Epyc’s. These new launches show that AMD has no supply constraint at TSMC!
AMD’s Ryzen 3000 has been doing very well in the desktop DIY segment. But the prebuild OEM segment is quite another story. So it is critical that OEMs are using Radeon RX 5500 in the prebuild desktop SKUs. AMD has also been absent in the mobile discrete GPU segment, long dominated by Nvidia. So the launching of RX 5500M, to be used by MSI even, is very compelling. MSI’s chief had famously claimed that they were very reluctant to use AMD because it would be awkward with Intel.
OEMs are also using Ryzen Pro 3000 series in their prebuilds meant for corporations, available in Q4 2019.
Today AMD held the Second Greater China Partner Summit in China, according to this news coming out of Beijing. Scott Ayler once again reiterated that there is no supply constraint at TSMC. TSMC has entered the HPC space with AMD, and supports AMD completely. I think AMD absolutely will not risk shareholder lawsuits to make this claim so unequivocally.
Let’s recheck the Ryzen 3900X availability. On Amazon, 3900X is still available, with price coming down to $559. At Newegg, 3900X is in stock at $565. At B&H Photo, 3900X is available with price of $559. At Mindfactory, 3900X is in stock at € 529. Its web page shows the units sold has been increasing by roughly 100 per day. It is obvious by now that AMD has caught up with the supplying of 3900X. AMD had underestimated how popular this 12 cores CPU was going to be, even at a MSRP of $500, so much so that it is selling for $560 on Amazon! The delay of 3950X and the 24 cores TR3 makes perfect sense. AMD is indeed stockpiling these chips, all the while making a killing on the sale of 3900X.
I now predict that AMD will beat Q3 guidance, something north of $1.85B. Q4 guidance will be north of $2.25B. Fingers crossed.
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