AMD expands in the data center market
Advanced Micro Devices (AMD) entered the high-performance server CPU (central processing unit) market with the launch of its EPYC server CPUs in 2017. In a span of one year, AMD’s EPYC server CPU is being used in over 50 customer platforms including platforms from server OEMs (original equipment manufacturers) and ODMs (original design manufacturers), platforms from the cloud, and specific platforms. These platforms help EPYC reach out to multiple customers.
However, the shipment of EPYC depends on customer demand. While some customers like enterprises demand hundreds of units, large cloud customers demand tens of thousands of units.
Growing adoption of EPYC
AMD secured orders for its EPYC server CPUs from several large enterprises in fiscal Q2 2018. Enterprises are adopting EPYC server CPUs for HPC (high-performance computing), data analytics, and general-purpose virtualized enterprise environments.
In fiscal Q2 2018, AMD’s EPYC CPU shipments to mega data centers more than doubled as it accelerated product qualification over the anticipation of large deployments planned in H2 2018. One of its mega data center customers is Tencent Cloud, which has launched its SA1 Cloud Service that pledges to reduce the per virtual machine cost by 30%. AMD is also seeing growing adoption from Tier 2 next wave cloud service providers that have the capability to grow quickly.
The rising adoption has accelerated the growth of EPYC’s revenue and shipments to 50% sequentially in fiscal Q2 2018. This growth rate is likely to accelerate further as the company prepares to secure a 5% share in the server CPU market, which is dominated by Intel (INTC) with a 99% share. AMD aims to gain mid-single-digit server CPU market share by the end of 2018 and increase it to double-digit market share in the mid-term.
While adoption is important to gain market share, competitive technology is also important. We will look into this next.
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