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Chip designer AMD’s latest financial report for the quarter ending in December 2023 simultaneously reflected a downturn in the chip market and the first signs of a recovery. AMD’s annual revenue dropped by 4% during the year, and its GAAP and non GAAP profits tanked by more than a third as revenue for chips primarily used in personal computing gadgets like laptops and PCs dropped by 25% in 2023 over 2022.
At the same time, the firm’s earnings presentation shared key facts about its focus on artificial intelligence, which had created some hype heading into today’s release. AMD’s fourth quarter revenue sat at $6.1 billion during Q4 2023, marking single and double digit growths of 6% and 10% sequentially and annually, respectively.
While client computing revenue dropped by 25% in 2025, its revenue jumped by 62% annually on the back of sales of the latest Ryzen 7000 processors. AMD also shared that it now commands 90% of the market for A.I. enabled personal computers, sharing that its Ryzen CPUs are “now powering more than 90% of Al-enabled PCs currently in market”.
AMD Says A.I. Chips Are In Volume Production; Reports 38% Annual Surge In Q4 2023 Data Center Revenue
AMD’s Data Center segment remained the star of the show in yet another earnings release, as it maintained its track for fourth quarter revenue growth in 2023 as well. During Q4 2022, Data Center sat at $1.6 billion before dropping to $1.2 billion in Q1 2023. For the fourth quarter, it and embedded computing accounted for more than half of AMD’s revenue during 2023.
AMD gained server CPU revenue share during Q4 2023 due to “significant double digit percentage growth in fourth gen EPYC processor revenue and demand for third gen EPYC processors” explained AMD’s chief executive officer, Dr. Lisa Su.
AMD’s investor presentation accompanied her comments, and carefully placed details in the slide deck saw AMD beef up its credentials in the A.I. market. NVIDIA’s GPUs dominate the market for A.I., but AMD has the advantage of offering both CPUs and GPUs.
This was also on the firm’s CEO’s mind as she revealed that EPYC CPUs, typically used by data center customers, also “power headnotes and large training and inference clusters.“
The ability to make a complete system on a chip (SoC) also allows AMD to flex its chip design muscles. Subsequently, the firm shared that its Ryzen CPUs now power “more than 90% of Al-enabled PCs currently in market.“
One key area eliciting focus before today’s fourth quarter earnings release and earnings call was the status of AMD’s Instinct products for the A.I. industry. These are marketed under the Instinct branding, and during the call, Dr. Su commented:
Turning to our broader Data Center portfolio, our Data Center GPU business accelerated significantly in the quarter, with revenue exceeding our $400 million expectation driven by a faster ramp for MI300X with A.I. customers. We launched our MI300 accelerator family in December, with strong partner and ecosystem support from multiple large cloud providers, all the major OEMs, and many leading A.I. developers.
MI300X GPUs deliver leadership generative A.I. performance by combining our high performance CDNA 3 architecture with industry leading memory bandwidth and capacity. Customer response to MI300 has been overwhelmingly positive, and we are aggressively ramping production to support the dozens of cloud, enterprise, and supercomputing customers deploying Instinct accelerators.
She went on to add that AMD is working with dozens of cloud, enterprise and supercomputing customers who have deployed Instinct accelerators. These include Microsoft, Oracle and Meta, among others.
These and other factors have made AMD revise its revenue guidance for Data Center GPU revenue during the current quarter. Dr. Su shared that AMD’s previous guidance for the subsegment had penciled in no sequential growth and overall $2.4 billion+ in sales for the full year. The $2.4 billion figure is the value of the GPUs that AMD estimates that it can sell to compete with NVIDIA in the A.I. market, and the firm is now confident that during Q1 2024, Data Center GPU revenue should grow sequentially and surpass $3.5 billion by the end of this year.
While client computing revenue grew sequentially during Q4 2023, AMD is cautious about growth during the first quarter of this year as supply catches up with demand. However, Dr. Su was optimistic that growth in A.I. PC shipments could kick off personal computing during the latter half.
Overall, AMD expects the A.I. accelerator market to grow to $400 billion by 2027 and strong growth in its Data Center and Client business divisions in 2024. A.I. is a “once in a generation” shift that will spread from data centers to PCs, outlined the AMD executive, adding that Microsoft is also running GPT-4 on MI300X in its production environment as well as “roll out Azure private previews of new MI300 instances aligned with the MI300X launch.“