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Senior Research Analyst
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For around five years the PC market was bound by incremental increases in performance — a focus on flagship and high-end solutions with exaggerated prices when compared to performance. What was really pushing the market was the adoption of new features, supported by the latest generations, such as PCIe 3.0, NVMe, and DDR4. The lack of competition did not make the situation any better. But this all changed two years ago when AMD introduced its Zen architecture. Here is why we believe it positively disrupted the market.
An Explosion of Threads
Chip manufacturers were able to push performance when Moore’s Law was achievable and the number of transistors in a chip was almost doubling every two years. With technology nodes getting smaller, however, squeezing out 20% extra performance over the previous generation became increasingly difficult for a number of factors.
AMD was able to bypass these limitations with a new design — the Zen microarchitecture — combining multicore with multidie to reach up to 16 threads on the Ryzen desktop platform and 32 threads on the Ryzen Threadripper enthusiast platform. AMD then doubled this already large number of cores in the 2018 release of its second-gen Ryzen Threadripper, to reach an unprecedented 64 threads per single socket.
As a result, the change in the status quo on the hardware side made the game design houses adapt to the new reality, supported by DX12 and Vulkan APIs, to take advantage of multithreaded performance. Productivity software houses, especially those dedicated to digital content creation, which rely heavily on precision and abiding to the laws of physics in CPU rendering, were also benefiting from this, and professional users in turn are now able to save precious time and money.
Another disruptive effect was moving the long considered mainstream 4 core/4 thread processors down to entry-level and making 6 cores/6 threads the new mainstream for gaming and general use. Competitors were also pushed to adopt the same trend, after holding back for a long time — and gamers finally got what they were asking for.
High-End Datacenter Designs for the Desktop
AMD realized there was an opportunity for its datacenter and consumer products between Ryzen and EPYC. The evolution of digital transformation created a new hybrid breed of users, defined by AMD as “prosumers” — designers, engineers, and content creators looking for a clever investment to get the best out of two worlds: productivity and gaming. This would include, for example, a professional photographer who needs to edit and render a wedding video and photos as fast as possible, to handle more jobs in the queue, but who plays competitive games and streams sessions on YouTube and Twitch at night.
Those end users were left out in the cold between gaming products that do not have enough power to cover their professional needs and workstation components that are not designed for gaming and are often too expensive to justify the investment, considering the independent, solo nature of their jobs. To satisfy those users, AMD introduced the industry’s first 16-core HEDT processor, the AMD Ryzen Threadripper featuring more PCI Express lanes, support for larger amounts of RAM, and larger cache memory. It is also worth mentioning that all of AMD’s Ryzen CPUs have full support for error-correcting code memory (ECC RAM), which is essential for high-precision computing and calculations. Those features pushed the mainstream PC builds to handle professional workloads, multitasking, AR/VR development, and online streaming, along with an excellent gaming and entertainment experience.
The Price Rebellion
The sweet spot of affordable high performance came with the introduction of the Polaris graphic architecture with the Radeon RX480 in 2016, followed by the Zen architecture in 2017 with a line of CPUs including the Ryzen 1500X, meeting and exceeding VR requirements and high-quality gaming at 1080p and 1440p, at launch prices below $250.
IDC’s Worldwide Quarterly PC Monitor Tracker shows that 1080p monitors accounted for 61.1% and 64.4% of all shipments in 2017 and 2018 respectively, while 1440p was 3.4% and 4.8%. Addressing the majority with products that would offer them quality at these resolutions for the right price was a clever play, paying dividends with growing market share.
AMD’s value does not come from prices alone, but also in useful free applications, such as AMD StoreMI; in effective and good-looking cooling solutions bundled with most of the processors; in good embedded graphics within APUs that are suitable for multimedia users and casual esports gamers; and in having all Ryzen CPUs unlocked and overclocking ready for experienced users to squeeze more performance out of them. It is worth mentioning as well that the value-oriented motherboards based on the B350 and B450 chipsets generally support the high-end processors and overclocking also, which adds up to the overall saving.
AMD’s disruptive innovation comes from combining the old multi-die approach with new designs, and the company continues to do so with its 7nm Zen 2 architecture, such as moving the memory controller to the CPU chip and doubling the amount of L3 cache in gen 3 over the previous two generations. And the company is doing so very quickly — three generations over the course of three years — to overcome the traditional incremental increase in performance. The same is happening on the consumer graphics side with the recently introduced Radeon RX 5700 series, based on the new Navi architecture.
Finally, the company is addressing the wide consumer base, which is cost-per-performance oriented, and not just pushing to increase the high-end enthusiast segment share. This approach has proved to be effective — the company has returned to profitability and increased its overall market shares, while its stock prices have reached levels not seen in more than a decade.
If you want to learn more about this topic or have any questions, please contact Malini Paul, Liam Hall or Mohamed Hefny, or head over to https://uk.idc.com and drop your details in the form on the top right.