For background on the chip market and some of the terms used here, please refer to the first edition of this newsletter.

AMD shares rose 16.5 percent this Friday. While Intel declined by exactly 16.2 percent on the same day. Intel’s release that their 7nm process is going to be delayed further triggered this response. This also marks a 2500% return on AMD’s stock over the last four years. AMD has been crushing Intel in recent years, delivering their energy-efficient 7nm chips (the first to market x86 chips) way before Intel’s plan in 2022-23. After years of struggle and with a razor-sharp product roadmap, 2022 is the year when AMD plans to move to a 5nm fab process (with TSMC or Samsung?). Since the majority of performance improvements in the last decade have been due to process improvements rather than improvements in the microarchitecture, die size, or the compiler toolchain, etc., Intel would simply not be able to catch up. There is hope though. Intel is diversifying.

AMD focuses on high-performance computing with their Ryzen chip line built for retail and OEM customers and Epyc for enterprises and cloud providers, and graphics with their Radeon line of GPUs. There is also a niche focus on the supercomputing needs of large organizations. If you have some experience patiently sitting through amusing TAM numbers in early-stage startup presentations, these rather realistically calculated numbers from a 50-year-old company might be a sigh of relief.

The Ryzen line

I remember a lot of mundane details. It could be my superpower. If people remember their first snowfall, I would remember all of them. Some personal tiny information about you that you told me a decade ago, a childhood story someone told me while drunk, the way you made you feel once, a seemingly usual conversation that you would never remember, a terrible thing you did to me, I would probably remember it all. (Not forgetting ever is also my biggest fear.)

I remember the first computer I owned fifteen years ago almost had an AMD chip until I was brainwashed by the shop owner into getting an Intel. AMD heats a lot, he said. It was a single-core Intel Pentium 530, with a power-hungry single-core clocked at 3.00 GHz. Fifteen years later, AMD Ryzen has since started to dominate the high-end desktop market with market share supposed to cross 50% anytime. Ryzen brings more number of cores, better power efficiency than the power guzzling 14nm Intel monster chips at a lower price point. AMD has also been able to promise processor upgrades without changing the underlying motherboard, which is a significant expense while upgrading on the Intel platform. A new generation of chip almost always comes with a brand new socket design which is quite frustrating for gamers and people who build their systems on their own. AMD has also been able to consistently deliver performance gains with new product launches successively for the past three years.

Intel has had a near-monopoly in the OEM laptop market segment for some time now. It is only a couple of years since Ryzen has risen to the occasion and challenged them. The story was the same with cloud providers and Intel’s Xeon based chips for server workloads. The recent Ryzen 4000 series of chips for laptops are competing well with Intel.

For most of the last five decades, AMD has been playing catchup with Intel, never quite succeeding in getting close. Things are starting to look good for AMD now. AMD has more than doubled it’s OEM laptops market share in just two years, going from 7% in 2017 to 16% in 2019, with revenues in the segment showing a similar trajectory. With a slight increase in sales of laptops due to COVID with education moving entirely online and a family requiring more devices, there is an expectation of a bump in sales this year. Though the most exciting part is the server market catering to HPC and cloud providers.

AMD’s data center ambitions

While we generally tend to hype up laptop and desktop performance benchmarks, the data center revenues are where the main action is. According to Intel’s Q2 2020 earnings call this Tuesday, 52% of its revenue is driven by the data center business. AMD wants to strike Intel here. It is probably the first time that major cloud providers are taking AMD seriously. AWS announced AMD Epyc powered virtual machines in May last year, with Google Cloud and Azure following in August. The problem with server chips is that there is no general answer to what is best. Even in 2020, Intel vs AMD would depend on the kind of workload that would be primarily run on the chip.

AMD’s problems ahead

It is not all roses for AMD though. The trend in increasing die size has doubled the yield cost while moving from a 14nm to 7nm fab and is again expected to almost double with a move to 5nm in 2022. AMD has tried to offset this problem with a chiplet based design that improves yield and coupled with faster interconnects, does not pose much of a performance issue. The other problem is AMD has lost market share to Nvidia in the GPU space. Deep learning is still primarily driven by Nvidia’s CUDA framework and devices in the cloud. AMD’s compute offering with ROCm has not found a widespread adoption yet. Nvidia is also looking to gobble ARM. While AWS’s Epyc based offerings are about 10% cheaper when compared with similar performance Xeon powered virtual machines, it is not a big enough reason for large enterprises to shift their cloud workload from Intel machines. Another major problem is cloud providers designing in-house competitive ARM-based server chips, starting with the Graviton by AWS.

Beyond microprocessors: Intel’s diversification plans

Intel has some hope with its diversification plans that started as early as 2015. Apart from computer chips, Intel also produces memory chips, primarily non-volatile memory (NVMe) based SSDs. Intel also has an autonomous car compute focus with its acquisition of Mobileye. They also recently acquired a mobility app called Moovit via Mobileye. Intel’s foray in heterogeneous System-on-a-Chip-ish devices like for example with Qualcomm’s mobile chips is the project Lakefield, starting with a product merging their core and atom line of chips. One of the most hyped product lines is Intel’s Xe GPUs possibly coming out late this year. Intel has had a series of acquisitions for a foray into AI specialized chips with Nervana and Habana. Though Intel’s 5G mobile modem business was sold to Apple last year.

Other things that matter

University of Washington’s research on battery-free video streaming is a tech that I am excited about since the last few years. Here is how a camera mounted on an insect can stream videos. We are peaking the GPT-3 hype cycle, not surprising though a bit disappointing to see the claims being made. Some of the projects using the beta API.

I have been doing some readings on Stoicism lately. Unrelated, but a good definition from NNT’s Antifragile -

My idea of the modern Stoic sage is someone who transforms fear into prudence, pain into information, mistakes into initiation, and desire into undertaking.

Until next weekend. 🤗

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