Introduction
AMD has once again demonstrated its prowess in the competitive GPU market by surpassing $1 billion in datacenter GPU sales during the second quarter of 2024.
This remarkable achievement is primarily driven by the soaring demand for AMD’s Instinct MI300 series GPUs, part of its “Antares” line of compute engines.
As AMD continues to scale its operations and enhance its product offerings, the company projects that it will surpass $4.5 billion in sales of these devices by the end of the year.
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AMD Achieves Record Datacenter GPU Sales
In an impressive feat, AMD has surpassed $1 billion in datacenter GPU sales in Q2 2024. The company’s Instinct MI300 series GPUs, part of its “Antares” line, have driven this significant revenue milestone. AMD now projects over $4.5 billion in sales for these GPUs by the end of the year.
Rapid Growth of Antares GPUs
Since the launch of AMD’s Epyc CPUs in 2017, the company has seen a steady revenue climb. However, the growth of Antares GPUs has been extraordinary.
Despite some initial concerns about demand earlier this year, AMD’s supply still struggles to meet the high market demand.
High Demand and Competitive Pricing
The persistent high demand for GPUs keeps their prices elevated. This trend is comparable to Nvidia’s pricing for its “Hopper” H100 and H200 GPU accelerators.
With Nvidia’s upcoming “Blackwell” B100 and B200 GPUs expected to command even higher prices, AMD’s competitive positioning remains robust.
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Supply Chain Challenges and Progress
Lisa Su, AMD’s CEO, highlighted the company’s achievements during a call with Wall Street analysts. “On the supply side, we made great progress in the second quarter,” Su said.
“We ramped up supply significantly, exceeding $1 billion in the quarter. I think the team has executed really well.”
Despite improvements, Su acknowledged ongoing tightness in the supply chain expected to persist through 2025.
Partnerships and Capacity Expansion
AMD has built strong partnerships across its supply chain to address these challenges. The company is increasing capacity and capability to keep pace with growing demand.
Su emphasized the importance of these partnerships in meeting both supply and demand opportunities, accelerating customer adoption as the year progresses.
Projected Sales and Market Dynamics
AMD anticipates approximately $5 billion in GPU sales for 2024, primarily driven by the MI300X compute engines.
The MI300A units also contribute to this projection. The supply chain improvements from partners like Taiwan Semiconductor Manufacturing Co. (TSMC) and HBM memory suppliers SK Hynix and Samsung play a crucial role in meeting these targets.
Nvidia’s Diverse Portfolio
While AMD focuses on its high-performance GPUs, Nvidia maintains a more diverse portfolio.
Nvidia’s datacenter GPUs, including the H100 and H200, support a range of applications from HPC simulation to AI training and inference.
Nvidia’s business benefits from this balanced revenue stream, unlike AMD’s more focused approach.
AI Inference Traction
AMD’s GPUs are gaining significant traction in AI inference workloads. The MI300X’s high performance and large HBM memory make it an attractive option compared to Nvidia’s H100, which requires more GPUs due to smaller memory sizes.
Su noted that AI inference has become a primary driver for AMD’s GPU revenues, especially for GenAI workloads requiring multiple GPUs for timely responses.
Balancing AI and HPC Applications
While AMD’s GPUs are effective for AI inference, they are also suitable for AI training and HPC applications.
In recent quarters, about half of AMD’s GPU revenues came from HPC, with the current quarter seeing a shift towards AI, particularly inference.
This balance is expected to reflect the broader market trends over time.
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Profitability Prospects
The profitability of AMD’s GPU business remains a key focus. Su and CFO Jean Hu expressed confidence that the GPU business will eventually become more profitable than AMD’s average, though it has yet to reach that point.
Q2 Financial Performance
In Q2 2024, AMD reported $5.84 billion in sales, an 8.9% increase from the previous year. 
Net income surged by nearly tenfold to $265 million, or 4.5% of revenues. Despite investments in new products, AMD maintained a cash reserve of $5.34 billion.
Datacenter Group Performance
The Datacenter Group, encompassing CPUs, GPUs, DPUs, and FPGAs, achieved $2.83 billion in sales, up 114.5% year-over-year. Operating income soared by a factor of 5.1 to $743 million, with CPUs contributing more significantly to this growth.
This group now comprises nearly half of AMD’s revenues, reflecting the strong performance of Epyc CPU sales and the rising demand for Antares GPUs.
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Challenges and Future Outlook
Despite impressive growth, AMD faces challenges in maintaining its supply chain and meeting market demand. However, with continued partnerships and capacity expansions, the company is well-positioned to capitalize on the growing AI and HPC markets.
Looking ahead, AMD aims to balance its revenue streams and enhance profitability, driven by its innovative GPU and CPU offerings.
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Conclusion
AMD’s record-breaking Q2 datacenter GPU sales mark a significant milestone for the company.
As it continues to innovate and expand its market presence, AMD is poised for sustained growth and increased market share in the highly competitive GPU industry.
