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."
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."