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Soid Ahmad
Soid Ahmad
Articles (195)  | Author's Website |

AMD Shows Intent With New Radeon Pro V340

The new GPU is targeting virtualized workloads, which will help the company make great strides in the high-growth VDI market

August 27, 2018 | About:

Chipmaker Advanced Micro Devices (NASDAQ:AMD) announced its new Radeon Pro V340 graphics card for virtual graphics processing unit workloads in Las Vegas on Sunday.

The company is packing two Vega GPUs on a single card with a two-slot design. The new card is geared for acceleration applications, including computer-aided design, virtual desktop and other high-density data center applications. Advanced Micro is using the 14-nanometer process technology for the card, which will allow it to compete with Tesla P40 – Nvidia’s (NASDAQ:NVDA) mainstream solution for GPU virtualization.

The market reacted positively to the new product; the stock was up around 7% on Monday. 

What sets V340 apart?

Although Nvidia has more experience in machine learning and datacenter applications, Advanced Micro's new GPU accelerator is based on Vega architecture, which is manufactured using a 14-nanometer process technology. Nvidia’s Pascal-based data center GPUs are made using a 16-nanometer process technology. This means Advanced Micro Devices has an inherent advantage in terms of performance.

Moreover, the new Radeon Pro V340 supports a denser environment, with 32 one-gigabyte profiles. Put simply, 32 users can connect to the GPU without the need for specialized hardware. Nvidia's Tesla P40, on the other hand, supports 24 users.

Additionally, the power rating for the Pro V340 will be higher compared to the competition as Advanced Micro is packing two GPUs on a single card; Tesla P40 uses a single Pascal GPU. Regardless, Radeon Pro V340 can lead to lower total cost of ownership for data center operators due to denser architecture and more users per card.

In a press release, the company said the card is "the first VDI hardware solution equipped with 32GB of ultra-fast, second-generation high-bandwidth memory" that can support
"complex design and media workloads.” 

“As the flagship of our new Radeon Pro V-series product line, the Radeon Pro V340 graphics card employsadvanced security features and helps to cost effectively deliver and accelerate modern visualization workloads from the datacenter,” Ogi Brkic, general manager of Radeon Pro at AMD, said. 

Given the security fiasco at Intel (NASDAQ:INTC), advanced security features will play in the company’s favor among potential clients.

What’s the outlook?

There are a lot of opportunities ahead for Advanced Micro in machine learning and high-performance computing. First, the industry is expected to grow in the coming years. The global virtual desktop infrastructure market is expected to experience a compound annual growth rate of 27% between 2016 and 2023, according to one report. Moreover, Allied Research forecasts the VDI market will reach $10.15 billion by 2023, growing 16.5% per year between 2016 and 2023. Furthermore, the desktop-as-a-service market, the primary target of Radeon Pro V340, is expected to grow at an astonishing 39% per year between 2017 and 2023.

Althought Nvidia is considered the leader in the datacenter market with a first-movers’ advantage, that does not mean there’s not room for more than one player. Some clients are cost-sensitive, for instance, and will settle for a cheaper solution with adequate performance. Moreover, the industry would not want to give Nvidia excessive pricing power. Therefore, Advance Micro has a good chance of taking a bite out of the growing datacenter market.

Final thoughts

Despite being late to the party, Advanced Micro Devices has finally launched a specialized solution for GPU virtualization; a machine learning 7nm-based Radeon Instinct is set to follow later this year. The bottom line is the company is positioned to benefit from the datacenter market amid growth dynamics of the VDI market, high competitive concentration and adequate GPU virtualization solutions from its Radeon Technologies Group.

Disclosure: I have no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.

About the author:

Soid Ahmad
Soid Ahmad is affiliated with the Association of Chartered Certified Accountants. He graduated from Oxford Brookes University. He also holds a Master's degree in Economics and Finance from HSRW Germany. He has been working as a technology analyst for several years and has an eye for mispriced technology stocks. He is also affiliated with Focus Equity, an independent equity research firm.

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