Advanced Micro Devices, Inc. (AMD) Goldman Sachs Communacopia and Technology Conference - (Transcript)

Summary of Advanced Micro Devices, Inc. (AMD) Conference Call Company Overview - Company: Advanced Micro Devices, Inc. (NASDAQ: AMD) - Date: September 9, 2024 - Participants: Lisa Su (Chair and CEO), Toshiya Hari (Goldman Sachs) Key Industry Insights AI and Data Center Growth - AMD's data center GPU business is projected to grow from essentially zero to $4.5 billion** in 2024, highlighting significant progress in AI [2] - The launch of MI300X has garnered strong customer traction, with major hyperscalers like Microsoft, Meta, and Oracle adopting AMD's solutions [3] - AMD's ROCm software stack has improved significantly, achieving performance parity or exceeding competitors in certain workloads [11] Market Potential - AMD maintains a **$400 billion Total Addressable Market (TAM) forecast for AI accelerators by 2027, with GPUs expected to be the largest segment [5][6] - The demand for compute resources is increasing due to the growing workloads associated with AI, including training and inference [6] Hardware Strategy - AMD has transitioned to a one-year product cadence for data center GPUs, driven by customer feedback and the need for diverse product offerings [7][8] - Upcoming products include the MI325, MI350, and MI400 series, aimed at capturing a broader market share [8] Software Development - Software remains a priority for AMD, with ROCm evolving to support complex workloads and improve performance [10][11] - Recent acquisitions, including Silo AI, are aimed at enhancing software capabilities and customer migration to the AMD ecosystem [10][12] Competitive Landscape Server CPU Market - AMD's server CPU market share has grown from low single digits to approximately 30%, with hyperscale customers adopting AMD technology faster than enterprise clients [19][20] - The upcoming Zen 5 cycle is expected to drive further adoption in both cloud and enterprise environments [18] Custom vs. Merchant Silicon - AMD anticipates a mix of custom and merchant silicon in the future, with a focus on maintaining strong partnerships with hyperscalers [24][26] Embedded Business - The Embedded business, primarily focused on FPGAs, is recovering from a downturn, with strong demand in aerospace, defense, and industrial sectors [32][33] - Design win synergy between embedded FPGA and CPU businesses has increased, with a 40% year-on-year growth in new design wins [33] Supply Chain and Manufacturing Strategy - AMD is experiencing tight supply conditions, particularly in advanced packaging and high-bandwidth memory, but expects to ramp up capacity in 2025 [36][37] - The company is diversifying its supply chain to mitigate risks associated with reliance on TSMC [39] Financial Strategy - AMD is focused on disciplined capital allocation, aiming to grow operating expenses slower than revenue while investing in AI and high-performance computing [41] - The company views the current AI technology arc as a significant opportunity, akin to a computing super cycle [43] Conclusion - AMD is well-positioned in the AI and data center markets, with a strong focus on software development, hardware innovation, and strategic acquisitions to enhance its competitive edge [35][43]