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Advanced Micro Devices Storms CES With 7nm Chips, Radeon VII

AMD came out swinging in its CES 2019 keynote

Source: AMD

The Consumer Electronics Show is still underway in Las Vegas, and on Wednesday evening, it was Advanced Micro Devices (NASDAQ:AMD) on stage for a keynote address. The company wowed the audience with its next generation computer processors and graphics cards. And it shocked many with the announcement of the Radeon VII, a new flagship graphics card that it says can outperform Nvidia’s (NASDAQ:NVDA) high-end RTX 2080. 

CES 2019 attendees were impressed with AMD’s presentation, but the market seems more guarded. After a day that saw AMD stock up and down in anticipation of what the company would reveal, it closed down 2.7% and has continued on a downward trend in pre-market trading.

Taking Aim at Intel

We’ve known for a while that AMD is preparing 7nm chips for its computers. The advanced chip technology makes for CPUs that pack far more transistors in the same space than the previous generation. That gives AMD the option of offering CPUs that deliver the same performance while consuming less power, or boosting performance by 25% while keeping energy consumption the same.

AMD showed off new Ryzen computer CPUs and EPYC server CPUs, both of which offer a serious challenge to Intel (NASDAQ:INTC). Still struggling with the larger 10nm manufacturing process, Intel’s chips are falling behind what AMD can offer. Onstage at CES 2019, an AMD Ryzen III CPU was shown going head-to-head against an Intel Core i9, consuming 30% less power than the Intel chip. That means less energy used and less cooling required, both important considerations for computer buyers.

AMD has been gaining market share on Intel in the past year, with speculation the company may have grabbed as much as 30% of the desktop CPU market in Q4. The new generation of 7nm Ryzen chips has the potential to boost gains even further. 

Radeon VII 

Intel isn’t the only company facing a challenge from AMD’s 7nm chips. Nvidia is the market leader for graphics cards, and it’s having to deal with Nvidia’s surge as well. 

On the CES 2019 stage, AMD showed off its new Radeon graphics cards, which also use 7nm technology. And the company surprised many with the announcement of the new Radeon VII, billed as the “world’s first 7nm gaming GPU”. In the past, AMD has more or less ceded the high-end graphics card market to Nvidia. However, the Radeon VII is aimed directly at Nvidia’s flagship RTX 2080. The company claims it will match Nvidia’s performance on most AAA PC game titles and claims the Radeon VII can top the RTX 2080 at 4K resolution and maximum setting on some games, including Battlefield 5. 

However, as Ars Technica points out, the Radeon VII lacks the raytracing capability of the RTX 2080, so Nvidia still holds an advantage with games that support that feature. 

At $699, the Radeon VII is priced the same as the base RTX 2080 and to sweeten the deal, AMD is bundling three AAA PC game titles with the new graphics card at launch.

In another boost to AMD’s prospects, it was announced that Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google is using AMD graphics cards to power its high profile Project Stream video game streaming service.

CES 2019 is a big stage and AMD used the exposure to its advantage. The company has seen phenomenal success over the past several years as it launched increasingly competitive products. AMD stock gained over 185% from 2017 through the fall of 2018 (hitting levels not seen since 2006), before sliding over the past few months. With its 7nm computer CPUs and graphics cards ready to go, AMD is poised to spend 2019 building on its gains and taking even more market share from rivals Intel and Nvidia.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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