AMD Aims to Ramp Up AI Chip Production for Release by Q4, Raises Q3 Forecast to $5.7 Billion
AMD’s CEO, Lisa Su, announced plans to boost production of their flagship MI300 artificial intelligence chips in the fourth quarter. These accelerator chips are in high demand and are intended to compete with Nvidia’s advanced H100 chips. AMD has been collaborating with top-tier cloud providers, large enterprises, and leading AI companies, which has generated significant interest in the MI300 series chips.
Investors are optimistic about the MI300’s potential to challenge Nvidia in the fast-growing AI chip market. However, due to export controls issued in October, the MI300 chips currently exceed the performance limits for sale to China. Unlike Nvidia and Intel, AMD has not yet developed special chips for the Chinese market. Nonetheless, the company is considering modifying its MI300 and older MI250 chips to comply with US export controls and cater to the Chinese customer base seeking AI solutions.
Although AMD has not provided a detailed full-year forecast, they expect their data center business, including MI300 chips, to surpass $6.04 billion in sales for 2022. Analysts believe that AMD’s ability to meet demand for AI chips could be advantageous, as Nvidia is facing supply constraints.
AMD is well-prepared for the launch of MI300 chips in the fourth quarter, and CEO Lisa Su reassured ample supply for 2024. Additionally, there is still strong interest in their older MI250 chip, which serves as a viable option for less complex AI tasks.
The second-quarter revenue for AMD’s data center business fell by 11%, while their client business revenue slumped by 54%. However, large cloud players like Microsoft and Google are expected to increase their spending on data centers in the second half of the year, with a focus on AI chips and infrastructure. Furthermore, the decline in PC shipments has slowed down, and demand is showing signs of improvement.
AMD’s finance chief, Jean Hu, predicts double-digit percentage growth in their Data Center and Client segment revenues for the third quarter, driven by increased demand for their EPYC and Ryzen processors. However, this growth could be partially offset by declines in the Gaming and Embedded segments.
For the current quarter, AMD forecasts revenue of approximately $5.7 billion, with analysts estimating revenue of $5.82 billion on average.
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