AMD posted third-quarter results on October 29th, with a quarterly revenue of USD 6.8 billion and net income to USD 771 million, while data center revenue surged 122% year-over-year. With new products such as MI300X hitting the market, the world’s second largest data center GPU provider also raises its AI chip sales forecast for this year to USD 5 billion, up from an earlier estimate of USD 4.5 billion, according to a report by CNBC.

For the fourth quarter of 2024, according to the company’s press release, AMD expects revenue to be approximately USD 7.5 billion, plus or minus USD 300 million. At the mid-point of the revenue range, this represents year-over-year growth of approximately 22% and sequential growth of approximately 10%. Non-GAAP gross margin is expected to be approximately 54%.

Fourth Quarter Forecast Falls to Impress; Concerns Raised on Capacity Constraints

However, the fourth-quarter forecast is slightly below market expectations, which raises concerns about whether the growth of the AI sector might be slowing down. According to Bloomberg, analysts had an average estimate of USD 7.55 billion.

AMD CEO Lisa Su reiterated that the company still sees robust momentum in AI, as interest from customers and partners in the MI325X is strong, a report by CNBC notes. AMD plans to begin production shipments of the MI325X this quarter, according to Su.

In October, AMD introduced the MI325X, and projected that the AI GPU market could reach USD 500 billion by 2028.

Nonetheless, Su also said that the environment will “continue to be tight”, but AMD has also planned for significant growth going into 2025, according to Bloomberg. She stated that the company feels good “about our overall supply-chain capability,” Bloomberg indicates.

AMD’s major foundry partner, TSMC, indicated in July that constraints on AI chip production will persist into 2025, which may imply a significant hurdle for clients like AMD, as it not only has to compete with NVIDIA on product performance, but also on the race of securing capacity.

Strong Data Center Revenue with 122% YoY Increase, while Gaming/ Embedded on the Decline

For the third quarter of 2024, AMD delivered a quarterly revenue of USD 6.8 billion, gross margin of 50%, operating income of USD 724 million, net income of USD 771 million and diluted earnings per share of USD 0.47. On a non-GAAP basis, gross margin was 54%, operating income was USD 1.7 billion, net income was USD 1.5 billion and diluted earnings per share was USD 0.92.

AMD’s AI chips are included in its data center segment, which saw annual sales more than double, reaching USD 3.5 billion. Overall, data center revenue rose 122% year-over-year. Su attributed the strong results to higher sales of EPYC and Instinct data center products and robust demand for the Ryzen PC processors, according to AMD’s press release.

The company also sees robust growth in its client segment, as revenue was USD 1.9 billion, up 29% year-over-year and 26% sequentially primarily driven by strong demand for “Zen 5” AMD Ryzen processors.

However, the gaming segment revenue was USD 462 million, down 69% year-over-year and 29% sequentially primarily due to a decrease in semi-custom revenue. According to CNBC, this could be attributed to reduced “semi-custom revenue” from custom chips used in consoles like the Sony PlayStation 5.

Embedded segment revenue was also declining, down 25% year-over-year to USD 927 million, as customers normalized their inventory levels. On a sequential basis, revenue increased 8% as demand improved in several end markets.

Read more

• [News] AMD Unveils its Latest AI Accelerators MI325X and MI355X, with TSMC Emerges as the Major Beneficiary
• [News] Intel Shifts to TSMC for Chip Production: A Looming Threat for AMD?

(Photo credit: AMD)

With the rapid adoption of AI applications, the demand for high-performance, reliable storage products is growing, drawing unprecedented attention to enterprise SSDs. The global SSD market is currently dominated by five major manufacturers, but as AI gains traction, Chinese enterprise SSD supply chain players are rising quickly through technical breakthroughs.

The enterprise SSD supply chain encompasses three main segments: NAND Flash memory, controller chips, and finished products. NAND Flash serves as the core storage medium and vehicle, available in formats like SLC (Single-Level Cell), MLC (Multi-Level Cell), TLC (Triple-Level Cell), and QLC (Quad-Level Cell).

The controller chip manages data read and write operations, with PCIe technology now the mainstream interface, while SATA and SAS also serve niche markets. The final product stage includes the design, production, and sales of enterprise SSDs.

Due to their significant control over NAND Flash memory, major flash manufacturers hold a dominant position in the enterprise SSD market. According to recent data from global market research firm TrendForce, the top five global enterprise SSD brands by revenue for Q2 this year are Samsung, SK Group (including SK Hynix and Solidigm), Micron Technology, Kioxia, and Western Digital. Collectively, these companies achieved revenues of $5.738 billion, reflecting a quarter-on-quarter growth of 52.7%.

At the same time, Chinese enterprise SSD manufacturers have seen notable growth in recent years, driven by technological innovation and market experience. Notable players in different segments of the enterprise SSD supply chain include Yangtze Memory, DapuStor, DERA, Union Memory, Zettastone, XITC, Memblaze, Unis Flash Memory, and HippStor.

The AI wave is driving massive demand for data storage and processing, which in turn imposes high requirements on the storage market for performance, cost-effectiveness, power efficiency, and reliability.

Domestic enterprise SSD manufacturers are racing to advance in these areas. For instance, in the field of flash memory, they are focusing on QLC technology, which can store more data within the same physical space compared to SLC, MLC, and TLC, thus meeting the high-capacity needs of big data and cloud storage applications.

In controller chip technology, the focus is on the PCIe 5.0 standard. Released by PCI-SIG in 2019, PCIe 5.0 doubles the data transfer speed of PCIe 4.0, enabling faster processing of large data volumes and boosting overall performance, which opens up significant growth potential for enterprise SSDs.

In China’s highly competitive enterprise SSD market, standing out requires more than simply obtaining high-quality NAND Flash and controller chips. Companies must integrate and optimize these components through innovative technology to ensure product performance and reliability, creating a competitive edge that differentiates their offerings from similar products.

 
(Photo credit: Yangtze Memory)

Crude oil prices have sharply declined, marking the largest single-day drop in nearly two years as Israel’s recent strikes on Iran avoided impacting any oil extraction facilities, thereby reducing the political risk premium associated with the Middle East.

Last Saturday, Israel launched airstrikes on Iranian military targets in retaliation for nearly 200 missiles fired by Iran three weeks ago. However, at the request of U.S. President Joe Biden, Saturday’s strikes spared any OPEC+ member oil extraction facilities from damage.

According to an early October report by the U.S. Energy Information Administration (EIA), the recent decline in oil prices led to a downward revision in EIA’s 2025 daily oil supply growth forecast to about 2 million barrels per day (previously 2.4 million). Nevertheless, with OPEC+ extending production increases through late 2024 and non-OPEC nations also increasing output into 2025, global daily oil supply for 2024 and 2025 is still expected to reach 102.5 million and 104.5 million barrels, respectively.

On the demand side, with slower Chinese oil imports and a global manufacturing downturn, the EIA adjusted down its demand forecasts for both China and OECD countries. Global daily oil demand is now expected to reach 103.1 million barrels in 2024 and 104.3 million barrels in 2025.

Additionally, projected net daily demand growth has been revised downward for Q1 2024 and Q2 2025, to approximately 600,000 and 500,000 barrels, respectively, down from earlier forecasts of 1.2 million and 900,000 barrels.

Overall, with Middle Eastern political risk premium decreasing, crude oil prices are now trending towards a fundamentally weaker outlook for the mid-to-long term. As of October 28, WTI crude futures dropped to $67.38 per barrel, while Brent crude also fell to $71.42 per barrel.

Read more at Datatrack

According to a report from Economic Daily News, while the industry is still focusing on the launch of Apple’s new products featuring self-developed M4 chips, Apple is reportedly making significant investments in the development of its next-generation M5 chips, to strengthen its position in the AI PC competition with more powerful ARM architecture processors.

Notably, the report highlighted that Apple will continue to adopt TSMC’s 3nm process, increasing orders for TSMC’s advanced processes. According to the report, it is expected that the next-generation M5 chip will be launched as early as the second half of next year to the end of the year.

In the current wave of AI PC competition, tech giants in the x86 camp, such as Intel and AMD, have launched new processors to vie for market share. Meanwhile, Apple, the market leader in the Arm camp, is accelerating its efforts to expand its presence and continue to develop next-generation self-developed chips, as indicated by the report.

According to the report, citing industry sources, Apple’s upcoming M5 chip is expected to deliver enhanced AI performance and computing power, potentially triggering a new wave of iPhone purchases. The report indicated that this will generate substantial chip foundry orders for TSMC. Plus, it will also benefit Apple’s end-product partners, such as Foxconn and Quanta.

Regarding Apple’s decision not to use TSMC’s 2nm process for the M5, the report, citing industry sources, noted that this is primarily due to the high costs. However, compared to the M4, the M5 features significant advancements, as it will utilize TSMC’s 3D chip-stacking technology, known as SoIC. This approach allows for better thermal management and reduced leakage compared to traditional 2D designs, as the report pointed out.

Apart from using TSMC’s 3nm process for chip development, the report noted, citing industry sources, that Apple has actively placed orders for TSMC’s 2nm process and the first batch of production capacity of the A16 process.

According to the report, The 2nm process is expected to be introduced as early as next year in the APs for Apple’s iPhone 17 Pro and 17 Pro Max models. As for the rumored ultra-thin iPhone 17 Air model, its AP may continue to use the 3nm process family.

Regarding clients for the 2nm process, the report noted, citing comments from TSMC’s chairman C.C. Wei during a previous earnings call, that inquiries for the 2nm process are outpacing those for the 3nm process. Additionally, the A16 process is considered highly attractive for AI server applications.

Wei noted that high-performance computing (HPC) applications are increasingly moving toward chiplet designs; however, this shift will not impact the adoption of the 2nm process. According to the report, current customer demand for the 2nm process exceeds that of the 3nm process, and production capacity is expected to be higher, as the report indicated.

According to an industrial source cited by MoneyDJ, TSMC started the mass production of 3nm in 2022, while the 2nm is expected to enter volume production in 2025, indicating that the generation cycle for a node has been expanded to three years.

Thus, supported by TSMC’s major clients, the contribution from 3nm will continue to rise next year and remain a key revenue driver in 2026, while the 2nm process is expected to replicate or even surpass the success of 3nm, MoneyDJ notes. According to previous market speculations, tech giants such as Apple, NVIDIA and AMD are believed to be the first batch of TSMC’s 2nm customers.

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• [News] TSMC Says 2nm More Sought after than 3nm; A16 Attractive for AI Server Clients
• [News] TSMC’s 2nm Wafers Reportedly Set to Double in Price, Benefitting IP/ Material Companies

(Photo credit: Apple)

According to a report from Globes, amid significant layoffs at Intel, many former employees from the company in Israel have made the move to NVIDIA, including veteran staff who have worked at Intel for a decade or more.

The report noted that updates on LinkedIn indicate that at least 30 employees left Intel in 2024 to join NVIDIA’s offices in Yokneam and Tel Aviv. This group includes core processor development engineers, hardware architecture professionals, electric power management staff, and chip design software developers.

Currently, NVIDIA is undergoing a major expansion in Israel, having hired hundreds of employees from other companies and recent college graduates since the beginning of the year, as the report mentioned.

According to the report, NVIDIA is estimated to have hired between 60 and 90 former Intel employees in recent months. With Intel’s ongoing wave of voluntary retirements and layoffs, NVIDIA is likely to hire a dozen more, potentially bringing the total to around 100.

The report indicated that, according to Levels.fyi, NVIDIA offers higher salaries and better compensation packages—approximately 33% higher on average than at Intel. Notably, the biggest difference between Intel and NVIDIA lies in their share options. The report pointed out that, according to Levels.fyi, the annual value of the share option package for a hardware engineer at Intel starts at NIS 19,300 (around USD 5,187), while at NVIDIA it begins at NIS 56,200 (approximately USD 15,105).

Intel announced in August that it would reduce 15% of its workforce, estimated to be between 15,000 and 17,000 employees, while 7,500 have already opted for voluntary retirement, which includes 19 additional monthly salary payments, according to the report.

Regarding Intel’s situation in Israel, the report indicated that after thousands of employees were laid off in the U.S., several hundred employees at Intel’s development centers in Haifa, Petah Tikva, and Jerusalem are reportedly set to be laid off this week.

The report highlighted that most of Intel’s layoffs in Israel are occurring in the development centers, rather than at the production facility in Kiryat Gat. This is due to the construction of the new Fab 38 plant, which, once completed, will need more production staff.

According to the report, most of former Intel employees who joined NVIDIA this year made the move in recent months, with a noticeable increase in departures occurring this month. As for other former Intel employees in Israel, many have joined other major tech companies, including Apple, Amazon, and Mobileye, which is a subsidiary of Intel. The report also noted that a smaller number have transitioned to Microsoft, Google, and the Chinese company Huawei, which has a development center in Haifa.

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• [News] Intel Employees Prepare for Layoff Notices as Cuts Enter Peak Phase This Week

(Photo credit: NVIDIA)