There has been a market/tech pullback in September, with Tesla/Nvidia all off their all time highs. AMD is no exception. Today it is trading around 75, quite a way off from 92-93 merely few weeks ago.
Since stocks don’t ever go up in a straight line, selling options is exactly how one make profit from this volatility! Having said that, it may be wise to stay on the sideline for the next few months, just in case Trump starts a major war and declares national emergency in an effort to stay in the White House.
In the long run, AMD’s success story remains intact. Forrest Norrod presented on 9/15/20 at the Deutsche Bank Technology Brokers Conference. The transcript can be found on SeekingAlpha, here.
I will go over individual topics later in this blog, but he is very reassuring!
First off, the fake news. Bloomberg put out an story on 9/15/20, citing unnamed sources, about Sony is cutting PS5 production by 4 million units (from 15M to 11M) this fiscal year, ending in March 2021.
The reason is yield at TSMC is only 50%. Sony immediately denied this entire story, as reported by c/net, here.
Bloomberg had smeared Supermicro with its story about how there were spy chips on the server boards Supermicro supplied to Google, Apple etc, back in October 2018. This lead to severe financial consequence for Supermicro. The accusation was strongly denied by Supermicro, Google, Apple etal, and was never proven. The engineering and science communities came out and said such chip was impossible to have existed without being detected. Nevertheless, Bloomberg never retracted this reporting. Hit job was accomplished. It supplied the narrative of China stealing IP from the USA, at the start of Trump’s trade war with China.
Now this story came out, just one day before Sony is scheduled to showcase the PS5 on 9/16/20. I am not impressed with the unnamed sources. The 50% yield is extremely hard to believe. TSMC has excellent yield with 7 nm, and certainly AMD has no such yield issues, neither does Microsoft with its XBox chips. Sony, who is liable for its claims and statements, had denied this story. Bloomberg, being a news outlet, has wide latitude with regards to the accuracy of its reporting. I will go with Sony over Bloomberg any day!
Back to Forrest Norrod. Below is a quick summary of what he had to say.
He was specifically asked about the Sony rumor spread by Bloomberg.
He said ramp is going as AMD expected. He can’t comment on specifics.
On China-USA tensions, limits on sales.
He said AMD will abide by all rules, but essentially stated that sales are not impacted.
On 7 nm wafers.
Supply is sufficient, and enough for AMD to hit guidance.
On Naples, Rome and Milan.
He was pressed about giving out a specific market share target for data center CPU, now that AMD had achieved 10% share.
He declined to give a target, but said they plan to exceed their historic high of 26-27%. He said Naples gave them the first 5%, and got AMD back into the data center market. Rome competed against Intel even better than they had projected, because Intel faltered. Rome was important because it gave people trust in AMD being able to deliver what they had promised. Milan continued that trust, and Milan’s performance will meet 100% of data center needs. In his words, Milan is no excuses and no compromises.
On possible price war with Intel, which is what happened in the past.
He said performance is more important. CPU is only 20-25% of the cost of system. So without performance, one cannot even give away the CPU. They are focusing on system level TCO (total cost of ownership).
On ARM and Nvidia acquiring ARM.
Performance is key. AMD is using x86 because it offers the most performance. The whole software ecosystem is in x86. It is very difficult and slow to change, and will do so only for an entirely new work load. There is a big barrier to migrate over to a new ISA (instruction set architecture). Having said that, AMD can and had worked with ARM, so it boils down to achieving high performance, no matter what is the ISA. (I am paraphrasing here.)
On GPU.
He talked about coherency. “so that the CPU and GPUs instead of being part connected by a thin IO link are connected via high performance coherent interconnect, where very importantly for the software developer, they no longer have to explicitly manage the pool of memory down on the accelerator via the GPU or anything else.”
I am sure there are other important points as well. Overall he gave great and informative answers.
Zen3 chips will be revealed on 10/8/20. RDNA2 GPUs will be revealed on 10/28/20. Both are looking to bring much excitement!
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