AMD To Strongly Benefit From New AI And Gaming Chips From Nvidia And AMD (NASDAQ:AMD)


Advanced Micro Devices’ (AMD) investors know well that Zen 2 CPU core has brought the Company to the pole position of the x86 world – in servers, desktops, and laptops. AMD has been gaining market share rapidly since the introduction of Zen 2 family products. In addition to raw performance, one of the significant advantages of Zen 2 family products is a less known feature called PCIe 4.0.

PCI Express, or PCIe, is the technology that facilitates moving information between various components of PCs, workstations, and servers. PCIe specification, which was first introduced in 2003, has been stagnant at 3.0 level from 2010 to 2017 until PCIe 4.0 specification was ratified. As can be seen from the table below (image from Wikipedia article), PCIe 4.0 doubles the rate at which data can be moved between various components of PCs and servers.

As these standards go, there is typically a lag between when a specification becomes ratified and when products based on that specification proliferate the market. For a new standard like PCIe 4.0 to take off, a critical mass of suppliers in the PC ecosystem must start supplying devices based on the standard. Intel (INTC) typically leads the charge but has fallen behind when it comes to PCIe 4.0. Given Intel’s tardiness, even though PCIe 4.0 was ratified in 2017, most servers and PCs currently shipping are based on the older 3.0 specification. Intel’s delay gave AMD the opportunity to lead the march to PCIe 4 with a family of CPUs and GPUs with the new specification.

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In servers, where humongous amount of data is transferred between various systems, PCIe 4.0 delivers considerable value immediately. The need to move large amounts of data at high speeds is especially acute in AI applications