AMD held its financial analyst day recently, shared with the public their continued focus on high-performance computing, their high-level strategy to attack the PC/Server market, and an updated long term financial model. This is one of the best analyst days we have seen from any semiconductor companies, and we recommend anyone interested to listen to the entire webcast on their website. What impressed us the most is their clear strategy on building the highest performance products from CPU, GPU to high-performance computing systems combining everything together.

High-Performance CPU

• This was AMD's primary focus since it first introduced Zen-based CPU in 2017. The innovative Multi-chip module and chiplet architecture, the industry-leading process technology, and the rock-solid execution in the last couple of years helped AMD moving from a low-end CPU provider to a very strong competitor in both server and PC market, gaining market share consistently against Intel since 2017.

• The company is on track to ship Zen 3 based CPU for the server and PC market later this year, and next-generation Zen 4 CPU in 2021/2022. Given their strong execution over the past couple of years, their announced design wins and the similar design approach compared to their current products, we don’t expect many surprises from them going forward. In fact, this progress is well anticipated based on our conversation with other investors.

High-Performance GPU

• While the GPU market is certainly important, it was definitely not a top priority for AMD over the past couple of years. We believe it is by choice partly due to the limited resources available to them. We wouldn't blame AMD for making such a choice, and we certainly didn’t want to see AMD fighting two uphill battles against two much stronger competitors (Intel & Nvidia) in two different markets at the same time. In the hindsight, AMD definitely picked their fight well.

• But after having a solid footing in the CPU market, and with the proliferation of machine learning, we are very glad to see AMD making a bigger push into this market, introducing a new CDNA architecture that's optimized for computing & datacenter. The prior RDNA architecture will remain and optimized for gaming and graphics. Essentially we are seeing a bifurcation of their GPU roadmap, one for datacenter and another one for gaming. Both product lines will introduce new 7nm based products later this year, and an upgrade cadence similar to their CPU products going forward.

The Combination of Both

• This is the most exciting part of the analyst day, the combination of high-performance CPU and GPU through infinity fabric interconnect and advanced 3D packaging. AMD is not alone in pushing this direction though. Nvidia is in the process of acquiring Mellanox and expanding its partnership with ARM CPU providers; Intel is working hard on their own version of 3D packaging called Foveros, and a GPU led by former AMD head of the graphic division. But for now, AMD is in a solid lead and is the only one in the market with both high-performance CPU and GPU available. This is likely the key reason why AMD won the two fastest supercomputer orders on the planet, Frontier at Oak Ridge National Lab and the just-announced El Capitan at Lawrence Livermore National Lab.

• We believe putting CPU and GPU together was the original vision AMD had when they acquired ATI back in 2006. It is great to see the vision finally coming together after almost 15 years and a near-death experience along the way.

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