How capacity constrained will AMD be for the next 4 years?

[Topweasel]

AMD has been held back through sometimes illegal tactics since basically they started making clones and at nearly every major point during their development as a company. So yes even in 2006, AMD was limited by the fact they weren't already larger because of the things Intel had done. That said they hadn't hit capacity during their most successful time period though part of that was on the illegal tactics Intel was using at the time to Limit OEM's adoption of AMD products. They don't and won't have the capacity to supplant Intel anywhere. But this is a cart/horse discussion. AMD and even TSMC can't hunt out capacity or deal with capacity as an issue till AMD sells enough products for it to be an issue. But TSMC is the same company that can produce GPU's for AMD and Nvidia sell billions a quarter. With 7nm and 5nm being some of the grandeur endeavors in both capacity and expense. Considering there is only currently one other user of the process (and an offshoot at that). I am not sure there is a legit worry even if AMD has a bonafide sales hit on its hands.

 

[Ajay]

Not at all, I'd say.

https://twitter.com/x/status/1145012516616957952

Well, at least yields are good. Nothing about AMD wafer allocation or potential.

 

[Vattila]

As others have pointed out, AMD CEO Lisa Su has explicitly stated that she does not see capacity as a limiter for their market share targets.

And, as I see it, TSMC will expand capacity pretty fast if need be. Make no mistake about it, TSMC is hungry to play a bigger part in HPC.

Market share will take time, giving AMD and manufacturing partners time to adapt. The notebook segment is the biggest part of the PC market, and AMD will need a few months yet to introduce 7nm Zen 2 APUs and make a big play there. In the desktop space, commercial bread-and-butter PCs are still the biggest part of this segment, and is the part of the market that is most resistant to changing platforms and vendors (due to long-term contracts, standardised platforms with long cycles, services, management technologies and maintenance). Both of these segments are well served by AMD's 12nm APUs, which have good performance-per-watt in the optimal frequency range, with market-leading graphics in a low-cost and small-footprint SoC. While 7nm Zen 2 will make a splash in the enthusiast and gaming desktop space, this is a small part of the PC market in volume terms.

In any case, AMD's priority will be the high-margin x86 server segment, which is also much smaller than the client PC segment. Much of the server space is resistant to change, favouring the incumbents, so it will take time to grow here, which Lisa Su acknowledges in her cautious outlook (4-6 quarters from 2018-Q4 to reach double-digit market share).

Hence, I don't think manufacturing capacity will limit AMD's growth much.

 

[Nothingness]

Don't forget Mediatek, Huawei, and Qualcomm.

And Xiinx. I don't know if their volume is high but they have pretty large chips which might mean a non negligible amount of wafers.

 

[lopri]

Seeing A12, which is manufactured by TSMC, is 83 mm^2, and seeing how many iPhones Apple sells, I do not think there is a capacity issue for Zen 2 chiplets which are believed to be ~80 mm^2 a piece. If anything the margin should be higher for TSMC with Mattise than with A12.

 

[lopri]

Because the bolded part looks to me like AMD themselves were acknowledging that they didn't have the production capacity to take over the market leadership, even if Intel's dirty deals hadn't prevented them from having any opportunity to do so.

Both can be right. Because Intel threatened to cut the supply of all of its chips to the OEMs, AMD could not meaningfully compete in the segment of the market where it was competitive. For example, the OEMs could not use AMD's products in, say, entry-level desktops, without risking the loss of Intel's mobile products. The OEMs had to all-in on Intel products or had to rely on non-Intel parts for everything they made. AMD lacked such capacity, but it does not mean it could not supply chips for where they made sense in a subset of the market.

In short, AMD was capacity-constrained but that constraint was an artificially one created by Intel's monopolistic behavior.