AMD expects to become a chip maker with annual sales of $40 billion in the next three years. In 2021, the company recorded record revenues of $16.4 billion.
AMD CEO Lisa Su revealed during the company’s first Financial Analyst Day event in two years that the chip maker plans to meet its $40 billion revenue target by 2025 with data center chips.
AMD is targeting a $300 billion slice of the overall chip market within three years. It believes $125 billion of that goal could go to chips that support servers, artificial intelligence, networking infrastructure, and graphics.
“We’ve seen a huge increase in demand for the cloud and everything that happens in the data center,” Su said. We’ve also seen an exponential increase in AI and some sort of demand for AI workloads. We’ve added total market size when we consider networks, communications, and other opportunities.
The world needs more computing power, and the demand for silicon increases even more as tools like artificial intelligence become popular.
“We are still underrepresented in the market,” Su said of the data center processor market. According to Mercury Research, in the first quarter of 2022, AMD captured 11.6% of the market for x86 data center chips, up from 8.9% last year.
AMD presented its data center chipset, where it spoke of the performance gains resulting from the company’s superior designs.
Its partnership with TSMC is part of that success, and AMD must develop its latest designs in tandem with the manufacturer to ensure it can leverage the latest manufacturing technologies to maximize performance from every piece of silicon.
Part of the company’s plans for data center and artificial intelligence includes its $35 billion acquisition of Zylinks.
The future of AMD is the data center
The chip maker has added billions of dollars in new sales and new markets in cars, wireless technology and embedded chips used by the military and healthcare. But Zylins also brought in technology that helps expand AMD’s efforts into the data center.
AMD was once a second-tier company alongside Intel. But it seems those days are over. Gone are the days of the disastrous Barcelona server chip rollout and the turbulent period that followed its decisive decision to exit the chipmaker business, which served it so well.
If the company can live up to its expectations, it will have cemented Sue’s decade-long effort to move the company.
Beyond the company’s grand strategy, AMD’s custom chip design work is intriguing. Currently, the so-called Sheh Custom chips are limited to video game console chips that they designed for the modern Xbox and PlayStation platforms.
But the company has many ideas on how to develop it into something much more in the coming years. “We’ve been working in the custom chip business for the past 10 years,” said Su. And if you look at what we do in the console market, it’s been custom chips.
She added, “We brought custom chips into our customers’ view of the market, system applications, and software.” And I think the trend toward dedicated chips may continue to grow.
Google, Amazon and Microsoft have efforts on dedicated data center chips. Through these efforts, cloud companies can find a way to differentiate themselves from the competition.
AMD’s custom chip strategy relies on its ability to connect many smaller specialized chipsets (chiplets) together in a single package.
AMD makes dozens of its products this way. And plan to help customers add chiplet based on their own technology. But company executives estimated that easily switching customer segments wouldn’t be ready until 2025.