AMD reports fiscal second quarter earnings on Tuesday at a propitious time, especially as GenAI continues its pull on markets where the chip design company competes, but only in a distant second to Nvidia GPUs.
A big concern to PC gamers using AMD products was the company’s announcement this week that it has delayed its Zen 5 Ryzen 9000 launch due to a quality concern. The July expected launch date is now August 8 for its Ryzen 7 97000X and Ryzen 5 9600 X processors and with high-end Ryzen 9 9950 X and Ryzen 9 9900 X delayed until August 15.
“During final checks, we found the initial production units that were shipped to our channel partners did not meet our full quality expectations,” said Jack Huynh, AMD SVP and GM of computing and graphics, in a statement. “Our of an abundance of caution and to maintain the highest quality experiences for every Ryzen user, we are working with our channel partners to replace the initial production units with fresh units. As a result there will be a short delay in retail availability.”
The delay seems to be regarded by users and analysts as a glitch, so perhaps not reflective of a bigger problem that could affect other processors, including the company’s future interations of its MI300X GPU for some of the biggest GenAI processing needs. AMD observers noted that the Ryzen delay is unprecedented in recent years, and the company’s quick action comes in contrast to the way Intel has recently responded to crashing issues which have plagued its CPUs, which first surfaced in December 2022. Elevated operating voltage caused instability in some 13th and 14th Gen desktop processors, an Intel employee noted this week.
Still, it isn’t completely clear if there are bigger concerns at AMD than with Ryzen processors. AMD was fairly emphatic, however, saying in an email to Fierce Electronics that other products are not affected. "As this is a packaged product testing issue, the delay does not affect any other products and is exclusive to the Ryzen 9000 series," a spokesperson said via email to Fierce Electronics.
The delay "doesn't raise any [broader] concerns for me," said Patrick Moorhead, chief analyst at Moor Insights & Strategy, via email to Fierce Electronics. "I don't think this is related to AI either and I believe it's all about the Zen 5 architecture. All new architectures have their hiccups and manufacturers want to catch them before they reach the market. The desktop processor market is very competitive and every week matters. New architectures like any new architecture have their unexpected challenges. I am sure AMD would have preferred to catch this before it shipped product parts out, but they made the right move in pulling those parts back and shipping processors without issues.”
AMD President Victor Peng to retire August 30
As AMD approaches Tuesday’s earnings call, the company this week announced its president, Victor Peng, is retiring effective August 30 after rejoining AMD in 2022 following the acquisition of Xilinx. He helped AMD become the top provider of FPGA and adaptive computing products, CEO Lisa Su noted in an announcement. He had spent 14 years at Xilinx.
Also this week, AMD joined Nvidia in support of Meta’s Llama 3.1 family of models. That means AMD EPYC CPUs, Ryzen AI NPUs, Instinct Accelerators, and Radeon GPUs are ready to support Llama 3.1, the company noted in a blog post.
The company boasted that a single server powered by 8 AMD Instinct MI300X GPUs can fit the entire copy of the Llama 3.1 405B parameter model in the FP 16 datatype.
Earlier in July, AMD also announced the acquisition of Silo AI of Helsinki, Finland, for $665 million, calling it the largest private AI lab in Europe. The agreement was described as another stop in AMD’s strategy to deliver end-to-end AI solutions based on open standards.
Zen 5 Ryzen AI 300 Series processors were announced in early June at Computex 2024. They contain the most powerful Neural Processing Unit for next-gen AI PCs, a new category of PCs that are projected to ignite PC sales from various OEMs and running on AI chips from various designers. The now-delayed AMD Ryzen 9000 series desktop processors were also announced at Computex, along with an expanded AMD Instinct accelerator roadmap and an annual cadence of AI accelerators including the AMD Instinct MI325 X, planned for availability in the fourth quarter this year.
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While AMD’s advances in AI chips seem prolific, it isn’t clear how much announcements or the latest delay in Ryzen 9000 will matter to the financial community, which reacts to large trends, including the recent downturn in chip stocks broadly. AMD stock has surged 3% this year, while Nvidia has surged 142%.
“The market is clearly underestimating AMD’s AI chip potential, leading to potential upside if AI computing trends are as bullish as many think,” wrote Chris MacDonald in Investor Place.
He noted that AMD shares rose nearly 4% on the acquisition of Silo AI. Meanwhile, Wells Fargo analyst Aaron Rakers raised the target price for AMD to $205 a share, up from $190. (Thursday’s shares were at $143.30 mid-day, down 1%.)