By
Godfrey Benjamin
April 18th, 2024
AMD is gradually winning a bigger share in the market. Meanwhile, its stock price is slightly down.
Advanced Micro Devices Inc (NASDAQ: AMD) is gaining ground in the chip market, most of its recent gains however are the expense of its bigger rival NVIDIA Corporation (NASDAQ: NVDA). This was the result of recent research published by Jon Peddie Research.
According to the market research firm, AMD has been chipping away at the market share of NVIDIA for some years with the gain becoming even more pronounced in the last couple of years. The report stated that AMD made a significant gain in the Q1 of 2020 with its 31% share of the graphic processing unit (GPU) market. This is an impressive leap from the 22.7% it held last year accentuating that its bigger rival has been losing chunks of the market it dominates.
Great Deal for Its Customers
The gap between the technologically superior NVIDIA has been progressively bridged by AMD through its class of 7 nanometer RDNA architecture-based GPUs from its Navi family. The Radeon RX 5700 series GPU which has been in the market since last year were not just priced competitively, they also outperformed the competitors.
The AMD strategy is simple: the company is offering its customers products of higher quality at lower prices. This has been the trend since 2016 when it launched Polaris, its graphic card that targeted the low end of the market. The company has come a long way since then. Its mid-range Raedon class is an indication that the company is building on the strategy for high-end GPUs.
Why AMD Market Share Grows
AMD successes can be attributed to the advanced RDNA architecture of its cards which uses the 7nm process which gives more compactness and power than the 12nm Turing graphic card technology employed by NVIDIA. The advantage of a smaller frame is that they are more tightly packed giving the card higher processing capacity.
NVIDIA is working on a strategy to regain lost ground. The company’s Ampere architecture is rumored to be based on the 7nm process of manufacture. The new cards are expected to hit the market in Q4 of 2020. The Ampere cards are expected to be more powerful in ray tracing performance which would drastically close the technological gap between AMD and NVIDIA.
NVIDIA Pricing as Critical Factor for AMD Growth
The pricing of the Ampere may be the determinant of how well it performs in the market. This is especially so considering that NVIDIA is known to sell the more expensive GPUs.
Meanwhile, AMD is developing its RDNA2 architecture which the company promised could deliver a 50% improvement on existing cards. Its ray tracing technology would place AMD at par with NVIDIA which has utilized the technology for 2 years.
On June 8, AMD announced that its EPYC server technology would has been approved by NVIDIA to power the latter’s DGX A100 which was preferred over Intel Corporation (NASDAQ: INTC) Xeon line. Despite its gains in business, AMD stock has traded sideways since its Q1 earnings were announced.
At the time of writing, AMD stock is 1.12% down, trading at $52.90 which is quite close to its all-time high of $55.
