AMD has hit a milestone by achieving $1 billion in sales of its new AI chips, specifically the Instinct MI300 AI GPUs. This marks a significant increase from the previous year when sales for this class of hardware were close to zero. In comparison to Nvidia, AMD still has a long way to go as Nvidia reported around $20 billion in AI GPU sales for the first quarter of 2024. Despite this, AMD has made a commendable entry into the highly profitable AI GPU market.
Lisa Su, the CEO of AMD, mentioned that the demand for Instinct MI300 AI GPUs is high, and the supply chain is expected to remain tight throughout 2025. This indicates a positive outlook for this particular product line. On the other hand, PC processor sales saw a substantial increase of 49% to $1.5 billion, showcasing the success of AMD’s Zen 4 and earlier chips. The anticipation for the new Zen 5 chips is high, hinting at a promising future for AMD in the processor market.
However, the gaming division of AMD faced challenges, with revenues dropping by 59% year-on-year. This decline was attributed to soft demand for semi-custom SoC sales as the console cycle enters its fifth year. Despite some improvement in gaming graphics revenue driven by the sales of Radeon 6000 and 7000 series GPUs, the overall gaming segment’s performance was disappointing. Gaming currently contributes just over 10% of AMD’s revenues, and Lisa Su predicted further declines in the next quarter.
While AMD’s overall performance is solid, the struggles in the gaming division raise concerns for PC gamers. There were no announcements regarding new gaming products during the earnings call, leaving gamers uncertain about the future of AMD’s graphics cards. The hope remains that AMD will focus on strengthening its gaming division to compete more effectively with Nvidia in the graphics card market.
In conclusion, AMD’s success in AI chip sales and PC processors is overshadowed by the challenges faced by its gaming division. The company’s future growth prospects seem positive, but attention needs to be given to improving the performance of its graphics segment. PC gamers are eager to see AMD make strides in this area and provide more competition in the market.
