2019 has been a memorable year for Advanced Micro Devices (NASDAQ:AMD). The American chipmaker has continued to gain ground on rivals Intel (NASDAQ:INTC) and Nvidia (NASDAQ:NVDA) in CPUs and graphics cards, respectively. And I mean that AMD has gained ground in a huge way — the company’s value has more than doubled this year.
AMD is planning a big update to its video game drivers this month, and a major feature has leaked. Radeon Boost — which marketing material claims will “turbocharge your game” — will arrive as part of AMD’s Radeon Software Adrenalin 2020 Edition download later this month. The driver release looks to end 2019 with a bang for AMD.
The one thing that could ruin the party has nothing to do with its competition. China is once again playing spoiler. A report claims that the country’s planned retaliation against the American government’s treatment of Huawei will take effect starting in 2020. Advanced Micro Devices is one of the companies in the crosshairs.
Radeon Software Adrenalin 2020 Edition
Lately, AMD has been giving Nvidia a run for its money in the market to sell add-on graphics cards for computers. Both companies were hit hard last year when the bottom fell out of the crypto currency market, and crypto miners stopped buying graphics cards to power their rigs. However, AMD kept up the pressure on Nvidia with new Radeon RX graphics cards. In the second quarter, the company was able to gain nearly 10% of market share from Nvidia. With that move, AMD captured nearly one third of the market. Nvidia clawed some of the that gain back in the last quarter, but AMD has still cut into Nvidia’s lead compared to this time last year.
However, AMD isn’t done for 2019. The company has another big release up its sleeve, but this time it’s software.
AMD’s Radeon Software Adrenalin 2020 Edition looks to be part of that driver launch. And the marketing images that were accidentally posted (they were screen-capped before AMD could delete them), include a feature called Radeon Boost that promises to “turbocharge your gaming.”
Radeon Boost has quickly become the subject of speculation. TechRadar notes there have been rumors that ray tracing support could be coming. Based on AMD’s past acquisition of a company called HiAlgo, there is speculation that Radeon Boost could be dynamic resolution-boosting technology. This could make the company’s more affordable graphics cards even more compelling. Such technology would boost game resolution when the player is still, and then boost frame rate when players are in motion.
Whatever Radeon Boost turns out to be, the release of Radeon Software Adrenalin 2020 Edition later this month will cap a very successful year for AMD.
China Dampens 2020 Projections
Looking ahead, there’s a potential financial iceberg with AMD’s name on it: the trade war with China. Gizmodo reports that the Chinese government is responding to U.S. actions against Huawei, through a “3-5-2” policy that takes effect starting in 2020. Under that initiative, the Chinese government is replacing all foreign equipment in its offices. The government has a goal of replacing 30% in 2020, 50% in 2021 and the final 20% in 2022.
As InvestorPlace’s Luke Lango points out, 30% of AMD’s revenue comes from China. And that market has seen big (60%) growth. Under the Chinese government’s “3-5-2” policy, sales of computer CPUs and graphics cards are going to take a big hit, and that is going to impact AMD’s bottom line.
Of course the Chinese measures will also hit AMD’s competition, but that’s small consolation for investors. In the meantime, wait to see just what that Radeon Software Adrenalin 2020 Edition download entails.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
