AMD launched its second generation 7 nm EPYC Rome server CPU on Wednesday amid market speculation that it could become a giant killer. (Or at least act like one.)
In the server market, Intel is and has been the giant for many years with more than 90% market share for server processors. Even so, prior to AMD’s Rome announcement, Intel was concerned enough about Rome that it highlighted its recent customer wins on Monday for Intel’s Xeon processor family.
On July 30, AMD CEO Lisa Su said in an earnings call that Rome will ramp faster than AMD’s first-generation EPYC Naples server CPU. She said Rome has four times more enterprise and cloud customers engaged in deployments. Along with other products, she said, AMD is “well positioned to drive significant growth in the second half of the year."
At an event in San Francisco on Wednesday, AMD said 120 servers were designed with Rome, including servers by HPE.
Analysts consider Rome to be AMD’s big chance to give Intel fits. With a 7 nm chip, AMD is effectively ahead of Intel in process technology space. Intel’s closest competition is a 10nm CPU that won’t ship for a year or more, analysts including Puja Tayal said in a Market Realist article.
“Competition is certainly bubbling up in the server CPU industry,” said Vladimir Galabov, a principle analyst at IHS Markit in an email to FierceElectronics. AMD’s market position is strengthened from endorsements by hyperscale cloud vendors. AWS, Google and Microsoft have all adopted EPYC-based servers.
“This is significant given the scale of these end-users,” he said.
“Moving to 7nm has helped AMD double the core count from 32 to 64 cores per CPU and has allowed AMD to double the floating point performance, which allows better calculations of floating numbers,” Galabov said. “AMD already had a leading performance with floating number calculations but that will likely widen their lead over Intel.”
In a benchmark of Rome on 64 cores head-to-head with the Intel Xeon Platinum 8280, Rome came out a winner on many tests including video encoding and compression and also programming and compilation. The results were posted anonymously on OpenBenchmarking, then removed, but not before Tom’s Hardware grabbed the results.
As of second quarter 2019, about 6% of all servers ran AMD x86 CPUs, up from about 1% at the beginning of 2017, according to IHS Markit. The total server market was 11.4 million servers shipped in 2018, and each server runs on average 1.8 CPUs. For the second quarter of 2019, Galabov estimated up to 2.5 million servers will have shipped across all markets globally for cloud, telco and enterprise.
It will take a long time to displace Intel as market leader. “To be honest with you, I doubt it is possible in the foreseeable future,” Galabov said. By the end of 2019, AMD could reach 10% share of server CPUs, which would be significant because they would have moved from 1% to 10% of server CPUs in two years.
Intel is also being squeezed by Arm-based CPUs from Marvell, Ampere and AWS. IHS Markit believes Arm-based CPUs will make up 3% to 4% of the server CPU market within the next five years. Intel is at risk of dropping from a 99% share of server CPUs in 2016 to as little as 80% within five years if both AMD and Arm-based CPU vendors are successful.
But Intel has a long lead partly because so many software workloads are optimized for Intel CPUs. Also, Intel is growing its software engineering workforce and undertaking a strategy of software optimization and CPU-customization.
“AMD and Arm-based vendors will have to ramp up their partnerships with the software vendor ecosystem to win in the market,” Galabov said.
AMD stock closed out the day Wednesday up 1.14%, reaching $29.19. The climb followed concern earlier in the week that Su would leave AMD to be second in command at IBM. But she tweeted that there was no truth to the rumor she is departing adding, "I love AMD and the best is yet to come!"