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AMD’s New Products Are Ideal for Gaming, Workstation Markets

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AMD in the gaming market

In the previous part of the series, we saw that Advanced Micro Devices’ (AMD) entry into the high-end CPU (central processing unit) market would boost its revenues in fiscal 1Q17 and 2Q17. It will likely receive most of the demand for its high-end Ryzen CPUs from gamers.

Gaming is estimated to be a $30-billion market, according to Jon Peddie Research. Even if AMD succeeds in gaining a 16% market share in the gaming market, its revenue should rise significantly. This growth should be further accelerated by the launch of the Vega GPU (graphics processing unit) by the end of fiscal 2Q17.

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AMD in the workstation market

After gaming, the next big growth market for AMD’s high-end Ryzen 1800X and Naples CPUs is the workstation market. The rumor mill has been very active around Ryzen and Naples. The most recent rumor is that AMD is likely to release a new 16-core, 32-thread Ryzen desktop CPU for the high-end desktop market.

AMD’s biggest customer, Hewlett-Packard (HPQ), is a market leader in the workstation space. Workstation desktops are used for heavy workloads such as video editing and engineering. For this reason, they require high performances from both CPUs and GPUs. Workstations are expensive and could cost ~$20,000 or more.

At present, AMD doesn’t have a material presence in the workstation market. However, its multicore, multithread Ryzen and Naples CPUs can deliver a powerful workstation option when combined with its Vega GPUs.

Intel’s (INTC) Xeon CPUs have 22-core, 44-thread units, and they cost ~$7,400. AMD’s Naples will have 32-core, 64-thread units, and it could cost less than a Xeon, maybe ~$6,000. This discount could give AMD a good start in the workstation market, which, according to Jon Peddie Research, sells ~4 million units every year.

As AMD will likely take some time to establish sales in the workstation market, this growth is likely to be reflected in its fiscal 3Q17 revenue.

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