Gauging the Impact of Polaris GPUs on AMD’s Graphics Business

AMD’s Graphics business

In the previous part of the series, we saw that Advanced Micro Devices’ (AMD) CG (Computing and Graphics) segment reported its highest revenue in two years. This growth was largely driven by the strong adoption of Polaris GPUs (graphics processing units).

AMD does not report earnings from computing and graphics separately. However, Jon Peddie Research’s data showed that AMD’s overall GPU shipments rose 10.49% sequentially in 4Q16, boosting the company’s market share by 1.4%. Meanwhile, Nvidia’s market share increased 1.5% during the same quarter.

Gauging the Impact of Polaris GPUs on AMD’s Graphics Business

New milestones in fiscal 4Q16

AMD witnessed strong growth across all its GPU product lines. It reported double-digit growth in desktop GPU shipments, especially among the performance and enthusiast segments of the market. Its mobile GPU sales growth outpaced desktop GPUs driven by demand for its newly launched Radeon Pro 400 mobile GPUs and strong demand for GPUs from Apple (AAPL) for the latest premium MacBook Pro notebooks.

AMD’s revenue from workstation GPUs had a record quarter in fiscal 4Q16 as PC makers such as Hewlett-Packard (HPQ) and Dell started offering systems powered by Radeon Pro WX GPUs.

Meanwhile, Nvidia (NVDA) reported 8% sequential growth in gaming revenue in the quarter ended January 2017.

AMD’s Vega to drive future growth

AMD’s Polaris GPU competed with Nvidia’s GTX 980 and 970 and targeted the mainstream customers. Now AMD’s Vega GPUs will likely compete with Nvidia’s GTX 1080 and upcoming 1080 Ti and target gaming enthusiasts. Vega 10 is scheduled to launch in fiscal 2Q17.

AMD’s GPU market is now growing beyond PCs and into servers. The company is developing Vega GPUs as well as Ryzen CPUs for data centers.

In the next part, we’ll discuss AMD’s EESC (Enterprise, Embedded, and Semi-Custom) segment.