I had a chance to speak to Jack Huynh, AMD's senior vice president and general manager of the Computing and Graphics Business Group, during IFA 2024 in a question and answer session. Due to speculation that AMD won't launch flagship GPUs for its next-gen lineup, I pressed Huynh for information regarding the company's plans for the high-end GPU market with the RDNA 4-powered Radeon RX 8000-series. His comments sketch out a plan focused specifically on gaining market share in the GPU market above all else, and this strategy deprioritizes chasing Nvidia's highest-end gaming cards — at least for now.
AMD's plans for high-end GPUs with its upcoming Radeon RX 8000-series have been cast into doubt by several hardware leakers who assert that AMD has canceled its upper-tier RX 8000 cards. However, the company hasn't officially commented on the matter before.
Of course, if AMD chose to avoid the battle of flagship GPUs, it wouldn't be without precedent: AMD sat out the battle for the top of the desktop GPU market back in 2019 when it first launched its RDNA 1 cards with a heavy focus on the mainstream market. The intervening generations found the company battling it out for the performance leadership position with Nvidia once again, but with little effect — Nvidia has a stranglehold on discrete gaming GPUs with performance leadership and 88% of the market share, while AMD holds just 12% of the market.
I asked Huynh about the situation. Here's the lightly edited transcript of the conversation:
Tom's Hardware [TH], Paul Alcorn: There's been a lot of anxiety in the PC enthusiast community that, with this massive amount of focus on the data center that AMD has created and your success, there will be less of a focus on gaming. There have even been repeated rumors from multiple different sources that AMD may not be as committed to the high end of the enthusiast GPU market, that it may come down more to the mid-range, and maybe not even have flagship SKUs to take on Nvidia's top-of-stack model. Are you guys committed to competing at the top of the stack with Nvidia?
Jack Huynh [JH]: I’m 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.
TH: Price point-wise, you have leadership, but you won't go after the flagship market?
JH: 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.
TH: This is specifically a client strategy [consumer market]?
JH: This is a client strategy.
TH: Okay, for the data center, you're still planning for King of the Hill?
JH: Of course, we have to because that’s performance-per-dollar. Even Microsoft said Chat GPT4 runs the fastest on MI300. Here's the thing: In the server space, when we have absolute leadership, we gain share because it is very TCO-based [Total Cost of Ownership]. In the client space, even when we have a better product, we may or may not gain share because there's a go-to-market side, and a developer side; that's the difference.
So, yeah, absolutely, we want to be the best [in the data center]. That’s why EPYC now has one-third of the world's market share.
On the PC side, we've had a better product than Intel for three generations but haven’t gained that much share. So, to me, that means that it's the developers, it's the go-to-market, and that's where I'm focusing now. I think building a great product in the client [consumer] market gets us to 20% market share by pure grinding, but to go to 40% is another gear, and that’s the machine I’m trying to build.
But don’t worry, I love gaming. When I present to the board, I say gaming is a strategic pillar in my strategy. I actually talk about a few things: commercial, PC, and gaming.
[..] Don’t worry. We will have a great strategy for the enthusiasts on the PC side, but we just haven’t disclosed it. We'll be using chiplets, which doesn't impact what I want to do on scale, but it still takes care of enthusiasts. [...] Don't worry, we won’t forget the Threadrippers and the Ryzen 9’s.
[End of Huynh's comments]
Huynh didn't say directly that the company wouldn't have any high-end graphics cards, but it's clear that he doesn't think a 'King of the Hill' strategy is the best approach. Our interpretation is that the company will, once again, be more focused on high-volume mid-range and perhaps even budget GPUs instead of the low-volume halo parts that define performance leadership for any given product stack.
Huynh asserts that focusing on King of the Hill products isn't a sure recipe for success, and Halo products do represent but a sliver of the overall market. However, companies slug it out at the top of the stack for a reason: As marketers at most chip companies will attest, the value of having an overall performance leadership position with a halo product is invaluable to a brand, and that perception heavily influences those who buy the lesser products further down the stack.
Conversely, Huynh's observations about market share trends do have merit. Although it doesn't apply to all specific segments, AMD has generally enjoyed performance and value leadership in desktop PCs for several generations. However, despite its tremendous success, status as a stock market darling, and plaudits from the enthusiast community and media alike, the company still resides in Intel's massive shadow, with 23.9% of the desktop PC market and 19.3% of the laptop market. And that's after seven long years of Ryzen as AMD has clawed back share at an excruciatingly slow pace, often by only fractions of a percentage point per quarter.
With this perspective, it's understandable that Huynh thinks AMD needs to adopt a different strategy to accelerate market share gains. Naturally, many will opine that there is also something being left unsaid. With billions of dollars raining in from its AI GPU sales to data center customers, perhaps it just simply isn't as efficient for AMD to chase after Nvidia with massive dies of high-end silicon carved from its limited chip production capacity at TSMC — those large dies would simply make much more money if they had MI300, and future derivatives, etched into the silicon.
And AMD still has to contend with Nvidia in the higher volume markets as well. Despite generally favorable performance per dollar, RDNA, RDNA 2, and RDNA 3 have seemingly failed to garner a lot of sales. Part of that might be Nvidia's superior feature set and marketing, and the expanded role of AI in the GPU space has certainly favored Nvidia's RTX GPUs. Whatever AMD attempts to do, winning mindshare back will take time.
We won't know the final verdict on AMD's decisions for its next-gen RDNA 4 Radeon RX 8000 lineup until launch, which is expected to come later this year or early next year. However, given the typical long lead times for chip design and final production, it's a safe bet that AMD's decision is already set in stone. It sure sounds like AMD is ready to cede the performance crown to Nvidia before the battle has even begun, and that doesn't bode well for the pricing of Nvidia's next-gen gaming flagships — a lack of meaningful competition at the top of the stack is never good for the consumer.
