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."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.
272 Comments on AMD Confirms Retreat from the Enthusiast GPU Segment, to Focus on Gaining Market-Share
what is with this company and the constant Giveup-and-go-home
how, you ask.
we'll offer fewer products. I don't get preorders either. games come as download codes, are people afraid they are going to run out of codes ? ridiculous.
Hell, I think that they are still paying their debt.
They went all out on Ryzen and it looks like they might be reworking Radeon in the same way. Plus, they placed their eggs on OpenCL and other open standards, which also backfired, so that also takes time to build up.
As mentioned, I think I heard that RDNA4 is simply a refresh if you will of RDNA3 and are placing more work in RDNA5.
So who knows at this point but meanwhile, I was happy with my 6900XT (sold) and now with my 7900xtx.
Are we still going to insist that $1000 GPUs are unreasonable? I9 14900ks is a $630 product. Normal 14900k is $550.
The I7 is no longer the top dog in the CPU lineup. The i7 now is the i5 of yesteryear. Well enough that they were sold out. In the 6800xts case, sold out for well over a year, and for the 7900 series, sold out for several months with stock not remaining stable until a year after launch.
Of course, AMD prioritized CPUs instead during this time. Which was a good business decision, but it also impacts GPU sales and marketshare. Agreed. Even back in the day upgrading every gen was rare. You usually waited at least for one gen, if not 2. Same in the 2010s. Shares of evergreen 6000 series didnt drop off on steam when the 7000s came out, it was when the RX 200s and 300s released. Wait, you mean stock buybacks are....Le Bad? No, it HAS to be the nGREEDia mindshare! It cant be that AMD has been famously unstable in the GPU division for a long time.
According to the Steam hardware survey
You have to "go down" to the 16th place to see the first card which can be considered as a high-end.
This is not new, there are only a few exception - most of the money profit came on the mid to low tier cards. What?
When was the last time when nVidia had competition on the top tier graphics card market?
When intel owned like 50+% of the market with those s#@t integrated chips, and they made good money with the bare minimum R&D
I mean r&d, those chip's development does not warrant a capital "r&d" :D
What sealed AMD's fate wasn't only their lack of vision, they could continue to steal ideas from Nvidia and offer the cheaper, inferior alternative but when AI boomed and Nvidia got showered with money they knew it's impossible to compete with 2 trillion dollars company.
Funny thing Jen Hsun actually said it was luck.
They did it because they are allocating as many chips as possible to AI, they just can't come out and say that because it would piss everyone off. Hey don't forget the part where they don't buy the Intel GPU either. There's a large disconnect in the GPU market between what people say other's should buy vs what people actually buy, as evidenced by AMD's 12% marketshare. Even bulldozer had a 26% marketshare and I really really don't think current AMD cards are anywhere near as bad as bulldozer was.
Not exactly going to be earth shattering, its going to have to come from the improved featureset if anything then. And let's consider that. Even IF AMD gains perf/feature parity with RDNA4 on RT and FSR (probably too tall an order) and they release a 500 dollar GPU that performs like a 7900XT. If you had a 6800XT now, would you pay that? Again... its not really an earth shattering jump here, and if you really wanted RT, you'd have gone for Nvidia at this point.
I'm not convinced of AMD's rationale or strategy here. They're responding, roll for initiative: critical miss. The last time they focused on their midrange they came up 2 generations short of Nvidia which is what got us into the RTX mess in the first place. AMD managed to completely stall at Vega performance for what, 5-7 years? Also, look at Intel, fighting tooth and nail to get every bit of performance out of Xe so they can finally compete in the midrange. AMD has a high end segment position in spitting distance and says 'meh, whatever'. I can't even. Good riddance its about time you guys stopped paying over 1k for these temporary items. You have yourself and only yourself to blame for this, jumping on every new x90 like its candy
Like who? The 10~12% people who likely care more for their wallets o_O
A quiet, efficient chip is the best upsell they can offer at this point in time. Best to use the wafers in high-margin businesses like Epyc, after all, Radeon's core audience doesn't really care about DLSS, RT, or even day one driver optimization...