Graphics card suppliers
The advent of esports and AI (artificial intelligence) in the last three years has brought discrete GPUs (graphics processing units) to the limelight. NVIDIA (NVDA) and Advanced Micro Devices (AMD) are the only two players in the discrete GPU market, and the growing use of these GPUs in various AI and graphics applications has encouraged Intel (INTC) to build its own discrete GPU by poaching talent from AMD.
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AMD has been enjoying strong growth in the last two years on the back of Radeon Polaris GPU, Ryzen PC, and EPYC server CPUs (central processing units). Even NVIDIA enjoyed strong double-digit growth on the back of its Pascal GPUs, which were widely adopted in PC gaming and AI data centers. However, both the companies were affected by the cryptocurrency trend, which brought windfall gains during the boom and significant declines during the bust.
NVIDIA’s fiscal 2020 first-quarter guidance
The semiconductor downturn due to the US-China trade war and the crypto bubble burst in mid-2018 ended the three-year-long double-digit growth spree of both AMD and NVIDIA. In the fourth quarter of fiscal 2019, NVIDIA reported its first YoY decline in three years at 24%. It expects its fiscal 2020 first-quarter revenue to fall 31% YoY as the excess channel GPU inventory created by no crypto-related sales clears off.
AMD’s first-quarter guidance
In the first quarter of 2019, AMD expects to report its first YoY revenue decline in three years. It expects revenue to fall 24% YoY to $1.25 billion due to significant declines in consumer GPU sales as a result of the absence of crypto-related GPU sales, excess GPU inventory in the channel, and declines in the semi-custom business. PC and server CPU sales are also expected to fall more than the normal seasonal decline of 10% in the first quarter.
Both AMD and NVIDIA expect growth to revive in the second half of 2019 as excess inventory clears and back-to-school and holiday season sales pick up. AMD expects second-half demand to be driven by the introduction of next-generation Ryzen, EPYC, and Radeon products built on TSMC’s (TSM) 7-nm (nanometer) node.
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