AMD Hires New Head of Core Computing and Gaming Business

Aug. 16, 2019
AMD Hires New Head of Core Computing and Gaming Business

AMD named a new executive vice president to lead its computing, graphics and semi-custom businesses as the Santa Clara, California-based company aims to swipe more market share from Intel and Nvidia with its Ryzen CPUs and Radeon GPUs. Rick Bergman, a former senior member of AMD's management team, returned to head up AMD's biggest business, which sells chips for high-performance personal computers and gaming consoles.

Bergman, who was chief executive officer of Synaptics from October 2011 to March 2019, replaced Sandeep Chennakeshu, who plans to depart AMD at the end of August. Bergman rejoined AMD, where he served as senior vice president of the products group from 2009 to 2011 and headed up AMD's graphics products group as general manager from 2006 to 2009. Before he joined AMD, Bergman was senior vice president of ATI's PC unit.

"2019 continues to be an exciting year for AMD as we deliver our new 7-nanometer product portfolio,” Lisa Su, AMD's chief executive officer, said in a statement last week. The company has been bolstering its personal computer business with other high-profile hires in recent years. It appointed Dell's Frank Azor as chief architect of gaming solutions last month. He has also been tapped to lead AMD's push into the emerging cloud gaming business.

The Silicon Valley-based company has struggled to threaten Intel's dominance in personal computers, where it has had trouble gaining more than 20% market share. AMD has also lagged behind Nvidia in the market for high-performance gaming GPUs. For decades, AMD could only challenge Intel's Core CPUs and Nvidia's GeForce GPUs by slashing prices. But since Su took over, AMD has been trying to improve its image with potential customers.

AMD is also taking advantage of delays in Intel's production of computer chips using its 10-nanometer process node. AMD's latest Ryzen CPUs are based on the 7-nanometer node from TSMC, which has the most advanced chip production technology today. Intel is tapping the 10-nanometer node—which is roughly as advanced as TSMC's 7-nanometer node—in its Cascade Lake CPUs, which will start shipping in PCs before the end of 2019.

The company’s forecast has been clouded by slumping sales of its semi-custom chips powering consoles such as Sony's Playstation. AMD has been forced to prune its forecast for sales growth from a percentage in the high-single digits to the mid-single digits in 2019. But the company predicts its core computing, graphics and data center sales will grow 20% in 2019 as its latest Ryzen CPUs, Radeon GPUs and EPYC CPUs roll out to customers.

AMD's Ryzen CPUs, used in high-performance personal and gaming computers, are challenging Intel's Core CPUs, which are currently hold nearly 90% market share. AMD's latest line of computer chips—code named Matisse—is based on its second generation Zen core, which boasts 15% better overall performance. AMD started selling Ryzen CPUs carrying up to 16 cores at the end of the second quarter as an alternative to Intel's flagship CPUs.

Strong sales of the company's Ryzen CPUs pushed its market share in personal computers to roughly 15% at the end of the first quarter, up from around 10% at the end of the first quarter last year, according to Mercury Research. Intel is also struggling to meet the booming demand for computer chips used in personal computers. That caused it to cede market share to AMD in the second quarter, said Intel's chief financial officer, George Davis.

AMD is also trying to storm Nvidia's stronghold in high-performance gaming GPUs. AMD's latest line of graphics processors, Radeon RX 5700, is targeting Nvidia's mid-range GeForce GPUs, which are based on 12-nanometer chip production from TSMC. The Radeon GPUs are using the new RDNA architecture—more commonly called Navi—which pumps out 25% more instructions per clock, or IPC, and 50% more performance per watt.

AMD is putting pressure on Nvidia in the mid-range market for gaming GPUs. Led by CEO Jensen Huang, Nvidia conceded customers to AMD in the first quarter of 2019, with its market share shrinking by 3.9% to 77.3% and AMD's growing from 18.8% to 22.7%, according to Jon Peddie Research. Nvidia aimed to get out ahead of AMD last month with the rollout of its Super RTX GPUs, which boost performance by up to 25% at the same prices.

AMD, the second largest vendor of discrete graphics processors behind Nvidia, is also pushing Radeon GPUs into new markets. AMD has started supplying custom GPU IP based on the RDNA architecture to Samsung for use in smartphones and other gadgets. Samsung has agreed to pay out $100 million as part of the licensing deal in 2019. Most smartphones use GPUs from Qualcomm and Arm, while Apple builds custom GPUs for the iPhones.

The goal for AMD is to maintain its momentum. AMD's shares have soared more than 70% in 2019 ahead of anticipated market share gains propelled by the latest Ryzen CPUs and Radeon GPUs. Patrick Moorhead, principal analyst at Moor Insights and Strategy, predicts AMD's sales to grow 40% in the second half versus the first half of 2019. Intel's shares have slipped 3% as it struggles with the loss of its manufacturing lead.

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