Nvidia’s stock price has nearly doubled since the beginning of the year due to the artificial intelligence (AI) craze. Therefore, the U.S. semiconductor company surpassed US$1 trillion (about 1,275 trillion won) in market capitalization at the close of trading on June 13 (local time), becoming the seventh U.S. company in history to exceed US$1 trillion in market capitalization. Nvidia holds a market share of more than 90 percent in the graphics processing unit (GPU) market for AI.
On the same day that Nvidia crossed the US$1 trillion mark in market cap, another semiconductor company unveiled a new product. It was AMD’s new GPU. AMD ranks second in the world in the CPU market after Intel. AMD took the wraps off the Instinct MI300X, a generative AI accelerator that the company calls “the world’s most advanced GPU.” It was AMD’s declaration of a war with Nvidia, which dominates the GPU market. AMD is the only company in the world that can make both high-performance CPUs and high-performance GPUs at the same time.
At one point, AMD held a 30 percent share of the PC CPU market, nipping at the heels of Intel, but AMD’s ambitious AMD FX Processor flopped, pushing AMD to the cliff of bankruptcy.
It was current AMD Chairwoman and CEO Lisa Su who saved AMD from the brink of the bankruptcy cliff. She realized that AMD could not go head to head with the two giants, Intel and Nvidia, and made AMD focus on CPUs for the PC market first. Ryzen, the company’s flagship CPU in 2017, took the market by storm. The AMD CPU outperformed Intel’s Core i* processors but was cheaper, enjoying immense popularity in the CPU market.
Now, Su is targeting Nvidia’s GPU market. Having previously toppled the Intel empire in the CPU market with affordable pricing and superior performance, she is likely to use the same strategy in the GPU market.
The timing is perfect for AMD, as Nvidia’s GPU prices have skyrocketed in the AI craze. While AMD has yet to disclose the price of the new MI300X GPU, many industry observers predict that the MI300X GPU will be sold at the same price as Nvidia’s H100 or slightly lower.
AMD’s MI300X chip can be used in larger AI models as it can address up to 192 GB of memory. That beats Nvidia’s H100’s 120 GB capacity. “The MI300X chip is designed for AI models and offers 2.4 times the memory density of the NVIDIA H100 and more than 1.6x the bandwidth,” Su said.
AMD’s challenge to Nvidia is being welcomed by companies that have grown tired of Nvidia’s monopoly. Nvidia’s GPU products are reportedly in such short supply that even those who order now will have to wait at least six months for actual delivery. Amazon Web Services (AWS), the world’s number one cloud service provider, recently announced that it was considering using AMD’s new MI300X chips for its cloud services.
A possibility is growing that No. 2 GPU player AMD will team up with No. 2 foundry player Samsung Electronics, analysts say. Most of Nvidia’s GPUs are made by No. 1 foundry player TSMC. The problem is that TSMC’s line are already full due to meeting orders for GPUs from Nvidia amid the AI craze. Accordingly, Samsung Electronics may handle AMD’s GPU foundry orders.
AMD reportedly had a meeting with Samsung Electronics’ foundry division to produce 4 nm process chips. Aside from TSMC, Samsung is the only company in the world that has front-end process technology to reliably produce AI semiconductors. For Samsung, a successful outcome with a major global customer like AMD using its latest process can accelerate its pursuit of TSMC in earnest.
In April, the two companies expanded their strategic partnership in the area of next-generation high-performance low-power graphics design intellectual properties. Samsung Electronics is also likely to supply high-bandwidth memory (HBM), which is an integral part of high-performance GPUs.
AMD is also helping Samsung Electronics develop the mobile application processor (AP) Exynos. That is to say, AMD is transferring GPU technology to Samsung Electronics for the latter’s development of the Exynos. The Korean tech giant’s goal of reviving its own APs matches AMD’s interest in regaining a competitive edge, which it lost in the mobile GPU world after AMD had sold ATI to Qualcomm.
Industry insiders believe that a joint front will be maintained for some time between AMD attempting to take the top spot in the GPU market and Samsung Electronics aiming for the top of the foundry world.