AMD CEO sees PC market recovery in 2nd half as AI demand ramps

Advanced Micro Devices CEO Lisa Su said she foresees the PC market to grow seasonally in the second half of the year with better inventory levels across the supply chain.

The big chip maker executed well in the second quarter, launching multiple leadership products, significantly expanding AI engagements and ramping the latest Zen 4 Epyc and Ryzen product families, Su said in a call with analysts.

While the second quarter revenue saw a decline of 18% to $5.4 billion compared to a year ago, AMD launched a number of new products amid the overall economic downturn.

Sales were flat sequentially as PC client and data center segment growth was offset by expected declines in the gaming and embedded segments.

AI customer engagements grew by more than seven times sequentially as multiple customers initiated or expanded programs supporting future deployments of Instinct MI250 and MI300 hardware and software at scale, Su said.

Su said that semi-custom SoC sales were strong in the quarter as Microsoft and Sony had healthy console
demand based on improved retail availability globally and the launches of new triple-A games. That’s going to be good news for the overall game industry.

In cloud, 30 new AMD instances launched in the second quarter with multiple “Genoa” instances
announced by AWS, Alibaba, Microsoft and Oracle. Genoa delivers up to 1.9 times more performance in enterprise and cloud applications and 1.8 times more performance-per-watt than the competition, making it by far the industry’s highest performance and most efficient server processor, Su said.

Su said she expects Epyc server chip revenue to grow by a double-digit percentage sequentially in the third quarter led by the expanding 4th Gen EPYC CPU ramp.

In supercomputing, Epyc and Instinct processors continue to be the solutions of choice for the most powerful supercomputers in the world, powering 121 of the fastest systems on the latest Top500 list and seven of the 10 most efficient systems on the Green500 list, Su said.

“In AI, we made strong progress in the second quarter as we met key hardware and software milestones to address the growing customer pull for our data center AI solutions,” Su said.

She said AMD’s AI strategy is focused on three areas. First, AMD will deliver a broad portfolio and multi-generation roadmap of leadership GPUs, CPUs and adaptive computing solutions for AI inferencing and
training. Second, AMD will extend the open and proven software platform AMD has established that enables AI hardware to be deployed broadly and easily. And third, expand the deep and collaborative
partnerships AMD has established across the ecosystem to accelerate deployments of AMD-based AI solutions at scale.

“We delivered on all three fronts in the second quarter,” she said.

On the hardware side, AMD announced new Instinct MI300X GPUs designed to be the world’s most advanced accelerators for generative AI. MI300X combines next-gen CDNA 3 architecture with the industry’s largest memory footprint and fastest memory bandwidth, critical factors in AI inferencing performance. Customer interest in our Instinct MI300A and MI300X GPUs is very high, she said. The products will ship in the fourth quarter.

As for PCs, Su said, “We expect our client segment will grow in the seasonally stronger second half of the year based on the strength of our product portfolio and increased adoption of our Ryzen 7000 CPUs, including the ramp of our Ryzen 7040 mobile CPUs that deliver leadership performance and energy efficiency and are the industry’s first x86 processors with a dedicated AI engine.”

She added, “Going forward, we see AI as a significant PC demand driver as Microsoft and other large software providers incorporate generative AI into their offerings. We are executing a multi-
generational Ryzen AI processor roadmap, which together with our ecosystem partners, will fundamentally change the PC experience.”

In gaming graphics, AMD expanded its Radeon 7000 GPU series in the second quarter with the
launch of our mainstream RX 7600 cards for 1080P gaming. The company is on-track to further expand our RDNA 3 GPU offerings with the launch of new enthusiast class Radeon 7000 series cards in the third quarter.

For the rest of the year, Su said, “In the data center market, we see a mixed environment as AI deployments are expanding, however cloud customers continue optimizing their data center compute and enterprise customers remain cautious with new deployments. Against this backdrop, we expect strong growth driven by higher 4th Gen EPYC and Ryzen 7000 processor sales and initial shipments of our Instinct MI300 accelerators.”

She added, “Longer term, while we are still in the very early days of the new era of AI, it is clear that AI
represents a multi-billion dollar growth opportunity for AMD across cloud, edge and an increasingly diverse number of intelligent end points. In the data center alone, we expect the market for AI accelerators to reach over $150 billion by 2027.”