AMD determined to ramp up Radeon RX 6000 GPU production throughout 2021
With all the crypto mining, scalping and the chip shortages affecting multiple industries going on right now, not too many companies are optimistic regarding possible fixed supplies for the foreseeable future. As far as GPUs are concerned, Nvidia stated that the shortages may very well last until 2022, even if it manages to fix the crypto mining issues. AMD, on the other hand, will not even bother with any mining limiters for the Radeon RX 6000 GPU series, but it certainly is aware of the increasing demand and is now determined to ramp up production as per CEO Lisa Su’s reveals from the latest earnings call.
Since AMD relies on TSMC to produce its chips, Team Red most likely prioritized the CPU supply over the GPU one in Q1 2021. The GPU supply thus remained extremely tight, but AMD probably managed to fix the mobile Ryzen 5000 supplies in the meantime, and is now able to direct some of the 7 nm capacity towards GPU production. CEO Lisa Su explains that the GPU ramp up will happen gradually throughout the remainder of 2021:
We expect Radeon 6000 Series GPU sales to grow significantly over the coming quarters as we ramp production.
We see good customer ordering patterns and strong backlog. And then we have also seen that the supply chain has been tight overall for the semiconductor industry. And we've been working very closely with our supply chain partners. And so we also have good visibility to additional supply as we go throughout the year.
And whether you're talking about consoles or you're talking about PC gaming or you're talking about the overall sort of gaming ecosystem, there's a significant demand. And so we believe there's strong demand, and we're continuing to ramp supply to meet that.
Despite something more akin to a paper launch for the high-end RX 6000 GPU series in late 2020 followed by some very problematic first few months of 2021 affected by many supply constraints, Su is still reporting a healthy double digit revenue increase for the gaming GPU sector in Q1 2021:
So the consumer graphics or the gaming graphics business, as you talked about, has actually done well for us. It grew double digits this past quarter. We had a very deliberate strategy here with the launch of RDNA 2.
We started at the top of the stack with our Big Navi product. And then we've now introduced a couple of additional products. And you'll see that both from the channel, sort of adding board cards into more OEM systems and notebook business as well as additional variants. So it's an important market segment for us.
We're happy with the progress. I think gamers really appreciate the product. It's fair to say that the graphics demand is very high across the marketplace. So we've actually put quite a bit of product into the market, but the demand still exceeds supply.
Of course, demand is still way too high, yet AMD wants to combat this by releasing additional products, including mobile RX 6000 GPUs and some entry-level desktop variants. It remains to be seen if AMD is able to also keep prices closer to MSRP with the increasing supply.