Monday, September 9th 2024
AMD Confirms Retreat from the Enthusiast GPU Segment, to Focus on Gaining Market-Share
AMD in an interview with Tom's Hardware, confirmed that its next generation of gaming GPUs based on the RDNA 4 graphics architecture will not target the enthusiast graphics segment. Speaking with Paul Alcorn, AMD's Computing and Graphics Business Group head Jack Huynh, said that with its next generation, AMD will focus on gaining market share in the PC gaming graphics market, which means winning price-performance battles against NVIDIA in key mainstream- and performance segments, similar to what it did with the Radeon RX 5000 series based on the original RDNA graphics architecture, and not get into the enthusiast segment that's low-margin with the kind of die-sizes at play, and move low volumes. AMD currently only holds 12% of the gaming discrete GPU market, something it sorely needs to turn around, given that its graphics IP is contemporary.
On a pointed question on whether AMD will continue to address the enthusiast GPU market, given that allocation for cutting-edge wafers are better spent on data-center GPUs, Huynh replied: "I am looking at scale, and AMD is in a different place right now. We have this debate quite a bit at AMD, right? So the question I ask is, the PlayStation 5, do you think that's hurting us? It's $499. So, I ask, is it fun to go King of the Hill? Again, I'm looking for scale. Because when we get scale, then I bring developers with us. So, my number one priority right now is to build scale, to get us to 40 to 50 percent of the market faster. Do I want to go after 10% of the TAM [Total Addressable Market] or 80%? I'm an 80% kind of guy because I don't want AMD to be the company that only people who can afford Porsches and Ferraris can buy. We want to build gaming systems for millions of users. Yes, we will have great, great, great products. But we tried that strategy [King of the Hill]—it hasn't really grown. ATI has tried this King of the Hill strategy, and the market share has kind of been...the market share. I want to build the best products at the right system price point. So, think about price point-wise; we'll have leadership."
Alcorn pressed: "Price point-wise, you have leadership, but you won't go after the flagship market?," to which Huynh replied: "One day, we may. But my priority right now is to build scale for AMD. Because without scale right now, I can't get the developers. If I tell developers, 'I'm just going for 10 percent of the market share,' they just say, 'Jack, I wish you well, but we have to go with Nvidia.' So, I have to show them a plan that says, 'Hey, we can get to 40% market share with this strategy.' Then they say, 'I'm with you now, Jack. Now I'll optimize on AMD.' Once we get that, then we can go after the top."
The exchange seems to confirm that AMD's decision to withdraw from the enthusiast segment is driven mainly by the low volumes it is seeing for the kind of engineering effort and large wafer costs spent building enthusiast-segment GPUs. The company saw great success with its Radeon RX 6800 series and RX 6900 series mainly because the RDNA 2 generation benefited from the GPU-accelerated cryptomining craze, where high-end GPUs were in demand. This demand disappeared by the time AMD rolled out its next-generation Radeon RX 7900 series powered by RDNA 3, and the lack of performance leadership compared to the GeForce RTX 4090 and RTX 4080 with ray tracing enabled, hurt the company's prospects. News of AMD focusing on the performance segment (and below), aligns with the rumors that with RDNA 4, AMD is making a concerted effort to improving its ray tracing performance, to reduce the performance impact of enabling ray tracing. This, raster performance, and efficiency, could be the company's play in gaining market share.
The grand assumption AMD is making here, is that it has a product problem, and not a distribution problem, and that with a product that strikes the right performance/Watt and performance/price equations, it will gain market-share.
Catch the full interview in the source link below.
Source:
Tom's Hardware
On a pointed question on whether AMD will continue to address the enthusiast GPU market, given that allocation for cutting-edge wafers are better spent on data-center GPUs, Huynh replied: "I am looking at scale, and AMD is in a different place right now. We have this debate quite a bit at AMD, right? So the question I ask is, the PlayStation 5, do you think that's hurting us? It's $499. So, I ask, is it fun to go King of the Hill? Again, I'm looking for scale. Because when we get scale, then I bring developers with us. So, my number one priority right now is to build scale, to get us to 40 to 50 percent of the market faster. Do I want to go after 10% of the TAM [Total Addressable Market] or 80%? I'm an 80% kind of guy because I don't want AMD to be the company that only people who can afford Porsches and Ferraris can buy. We want to build gaming systems for millions of users. Yes, we will have great, great, great products. But we tried that strategy [King of the Hill]—it hasn't really grown. ATI has tried this King of the Hill strategy, and the market share has kind of been...the market share. I want to build the best products at the right system price point. So, think about price point-wise; we'll have leadership."
The exchange seems to confirm that AMD's decision to withdraw from the enthusiast segment is driven mainly by the low volumes it is seeing for the kind of engineering effort and large wafer costs spent building enthusiast-segment GPUs. The company saw great success with its Radeon RX 6800 series and RX 6900 series mainly because the RDNA 2 generation benefited from the GPU-accelerated cryptomining craze, where high-end GPUs were in demand. This demand disappeared by the time AMD rolled out its next-generation Radeon RX 7900 series powered by RDNA 3, and the lack of performance leadership compared to the GeForce RTX 4090 and RTX 4080 with ray tracing enabled, hurt the company's prospects. News of AMD focusing on the performance segment (and below), aligns with the rumors that with RDNA 4, AMD is making a concerted effort to improving its ray tracing performance, to reduce the performance impact of enabling ray tracing. This, raster performance, and efficiency, could be the company's play in gaining market share.
The grand assumption AMD is making here, is that it has a product problem, and not a distribution problem, and that with a product that strikes the right performance/Watt and performance/price equations, it will gain market-share.
Catch the full interview in the source link below.
129 Comments on AMD Confirms Retreat from the Enthusiast GPU Segment, to Focus on Gaining Market-Share
What did you pay for your 6900XT? I think that'll underline this just fine :)
Just say no.
The biggest threat to AMD pulling this off is AMD.
Not really, I don't see them pusing ARM over x86 for instance. They're going all in on "AI" but the uarch doesn't matter, if Sammy sticks to Radeon for a few more years AMD could potentially have a much larger market share in Droidverse as well.
:peace:
Intel save us!!!!
:p:roll::p
Yes, I know, low quality post or trolling you will say. No. It's not.
It is just the reality of today's market. Users don't want to even consider a Radeon product, even when it is the best option for their budget and tech press is more aggressive towards AMD. AMD will look at the markets and target not only the one that gives them better margins, but also that market where buyers will acknowledge the advantages of it's products and will choose it over the competition. The market where buyers will buy based on their needs, not based on the sticker on the product. If AMD and more specifically the Radeon brand was receiving some love in the retail market and better AMD models at the same price range where outselling Nvidia models, AMD would have a reason to keep investing in gaming cards. Now they will limit their products in the market and they could be doing so, for as many generations they feel it is needed for consumers to stop drooling in front of an Nvidia logo. Many expect a repeat of the RDNA1 situation where AMD stayed only one generation without a high end model. Well, who can say that if people keep buying Nvidia hardware no matter what, RDNA5 will have an enthusiast model? And why should AMD build a high end model when people will keep finding excuses to buy the Nvidia sticker?
Maybe they should have a multi generation strategy and just stick to it and stop getting on like Microsoft.
I'd be willing to get something from AMD if they can price it well and provide solid performance.
Funny how people get triggered just because little ol'me doesnt like Ngreedia. ;)
Shame, because nVidia could use some REAL competition, but don't make some BS statement for sheeple and expect everybody to nod in approval and accolades.
Nvidia isn't any better. example - DLSS = "run at a lower resolution" so that the hype about ray tracing is overlooked when the best card we got can't push 30fps with path tracing at 4k. Then nvidia kills of multi-gpu because the only way to achieve 4k. 144fps, path tracing is with another card, and multi-gpu DX12 and Vulkan drivers are then also deprecated.
Sometimes its tiring to be manipulated. Just stop
AMD, just say "we can't compete with nvidia at a technology level" but don't BS it with some market share line.
geeez