A large part of the Q&A discussion was centered around supply and demand, especially given the notable lack of hardware on the shelves for end-users and enthusiasts. At a time when AMD has built out a number of products in a very compressed time frame, including consoles for two partners, it stands to reason that if users cannot buy the newest ‘leading performance hardware’, there are going to be complaints.
Lisa Su: ‘This is the result of a demand focused environment, rather than manufacturing issues. There is tightness in the supply chain due to demand, and that invariably puts pressure on our consumer, PC, and gaming product lines. As it relates to our semiconductor production, we’re putting in additional capacity to meet this unexpected demand. It will take time to catch up, but that’s what we’re seeing.’
When asked if this high demand environment and capacity ceiling would potentially cap AMD at 22% market share, Lisa said that AMD doesn’t believe that it will. Beyond actually building the silicon, Lisa also noted that there are substrate shortages, simply due to the increased demand, and that the ecosystem is working to also build additional capacity (including AMD investments), but that will take time and continue through 2021.
The question is always if and when this level of supply will improve to meet this increase in demand, and if AMD is still producing as many CPUs and GPUs as it can, where they might be going.
Lisa Su: ‘We are shipping lots of parts, and volumes in all segments are increasing, and that will happen through 2021. There will be tightness in the first half of the year, but alongside consumers we also ship to OEM partners. There is some real-time prioritization between end-user and OEM, but we understand that consumers want more and it’s very high on our priority list to meet this high demand.’
One element Lisa did speak to is how production level decisions happen in advance. AMD launched a lot of products in Q4 2020, including Ryzen 5000, Radeon RX 6000 GPUs, two games consoles, and also started shipping its next generation EPYC Milan processors. On top of all that, AMD had to build its new Ryzen 5000 Mobile processors to meet notebook demand in Q1 2021.
Lisa Su: ‘One of the things that was important with Cezanne (Ryzen 5000 Mobile) is that we were shipping for production in early 2021. With the OEM cycle of those products, enabling them to get the first batches of hardware in Q4 was vital for launch through the first quarter and the first half of 2021. This is how AMD matches its product cadence, and the choice on hardware manufacture is one of timing. It’s nothing fundamental, it’s not design limited, it’s all about making the right bets (sometimes months in advance) and enabling market estimation of demand. We had to enable millions of console APUs as well, and there is higher demand than we thought here as well. Working with OEM partners like Sony and Microsoft means enabling different strategies as well.’
