Moore’s Law formulated in 1965 by Gordon Moore, research director for Fairchild Semiconductor, in an article for Electronics magazine (amended in 1975 in the IEEE International Electron Devices Meeting) states that semi-conductor complexity will double every two years.
But, unlike the laws of nature, this doesn’t just happen. Companies like AMD, Advanced Micro Devices, have been making it happen over the decades – giving the world the computational power required for AI, data centers, gaming graphics and business computing.
“Over the next decade, the demand for advanced semiconductors will only increase as they become even more essential to every aspect of our lives, including new discoveries in medicine, physics, climate research, material science and energy – all powered by high-performance and adaptive computing, which requires the most advanced semiconductor process technologies in the world,” emphasized Lisa Su, CEO of AMD.
AMD was founded by eight renegade colleagues from Fairchild Semiconductor in 1969 one year after Gordon Moore himself had left to found micro-processor giant Intel, AMD’s chief rival. In 1975 AMD created its first micro-processor. In the mid-eighties the AMD by then had partnered with Intel and was battling to keep its head above water while facing a flood of cheaper Japanese semi-conductor imports.
“There are so many things that can be better with technology and so much of our R&D could be better if we were using more advanced technology.”
The company positioned itself in the graphics card business with the acquisition of Canadian ATI Technologies in 2006, creator of the renowned Radeon line of graphics products and core of gaming stalwarts such as the X-Box 360. In 2020, AMD finances were deep enough to support the $50 billion acquisition of Xilinx, a US-based semiconductor company.
Moore’s Law hasn’t been all chips and numbers for Su. The company’s headcount went from 8000 in 2014 when she became CEO to 25,000 in 2023. This radical growth made it important to set down what the company represents for the first time as it absorbed unprecedented numbers of employees.
“Our job in life is to push the limits of high performance and adaptive computing,” said Su recently to investors. “But we do it thinking about teamwork, collaboration, execution excellence, and humility is also part of the AMD culture. We never want to get to a point where we drink our own Kool-Aid too much.”
Su was born in Taiwan in 1969 and migrated with her parents to the United States as a 3-year-old, graduating from Bronx High School and getting her Bachelor’s, Master’s and PhD degrees in electrical engineering from MIT. Afterwards she went through technological roles in Texas Instruments, IBM and Freescale Semiconductor before taking on end-to-end business execution as senior vice-president and general manager at AMD in 2012.
Su transformed the business from one almost solely focused on PCs to one looking toward gaming, data centers and immersive platforms – the cutting edge of computing power.
In Su’s tenure AMD’s stock has gone from around $4 per share to close to $118 at the beginning of June 2023, a whopping 30-fold return on investment for those who bought in on her leadership back in the day. Revenue has grown from $5 billion to almost $25 billion in the same period.
“Ten years ago, when I joined the company, it was one of the few companies that really has all of the intellectual property, the assets, to really be a leader in the field,” said Su recently. “And I have really enjoyed my time building some of the high-performance processors that go into lots of applications across the market.”
In the past people didn’t really understand the importance of under-the-hood technology like semi-conductors. Now the general public is lowly awakening that they lie at the heart of practically all the innovations one can imagine.
“We can view disruptions as being very volatile or we can also view to asking how we can bring out the very best in our companies, in our industries and in our eco-systems to bring out lasting change.”
One of Su’s favorite examples is the world’s fastest super-computer, Frontier, in Oak Ridge National Lab which uses AMD semi-conductors. This massive computing power is being directed toward six areas: health care, national security, energy security, economic security and scientific discovery.
“Frontier uses our high-performance CPUs and GPUs and what we are doing with the computing is solving some of the most important problems for the country, things like climate research and healthcare research,” said Su recently. “That is an example of, yes, we are building very big computers, but we are also solving really important problems.”
Her hugely successful track record is even more noteworthy for the difficult times she has had to navigate. Semi-conductors became a headline topic as a shortage led to disruption in the production of automobiles and electronics. At the time, manufacturing dropped due to hastily cancelled orders and tight, just-in-time logistics.
As it turned out, demand for IT equipment rose dramatically during the pandemic with people turning to laptops, mobile devices and gaming systems as they worked from home.
Now the increasing global segmentation due to the war in Ukraine and rising tensions with China may pose another challenge for Su and the semi-conductor industry.
“I think what the pandemic taught us that people can be really good in times of crisis and, actually, it can motivate important innovation and discovery and change,” said Su. “For semi-conductors it meant that the demand for computing went through the roof. In a few moments, we transitioned from working from the office to working from home, educating and schooling from home. That really changed the trajectory we were on and frankly the industry is better because of it. We built a lot of new resiliency into our supply chains. And the TRIPS and Science Act was passed that really focused on semi-conductor industry investment.”
It is precisely in these volatile times that AMDs stock rocketed from about $14 a share in March 2018 to $158 per share in September 2021. Moving forward from the pandemic, 2022 became a blockbuster year.
“We believe that AI is a huge driver of compute growth. And given our portfolio, it should be a driver of our growth as well.”
“On a full year basis, we grew annual revenue 44% to $23.6 billion,” said Su in a call with investors. “We set annual records for revenue, gross margin and profitability driven largely by a 64% increase in our data center segment revenue and the strong performance of our embedded segment following our Xilinx acquisition.”
In 2023, the company expects growth to be driven by its data center embedded segment which accounted for $10.6 billion in sales in 2022 up from $3.9 billion in 2021.
With the transition from companies running their data centers out of their offices to storing their data in the facilities of cloud service providers, energy use by data centers is predicted to reach 35 gigawatts in 2030, up from 17 gigawatts in 2022, according to a McKinsey study and compound annual growth is estimated by some researchers to reach 11% a year.
The launch of the fourth generation AMDs EPYC-brand server processors, known as Genoa, in November has positioned AMD for solid growth in this segment in 2023.
“I think all of us in the industry have seen some elevated costs, but I think we also see – expect that to normalize too as everyone is sort of optimizing their capex spending.”
“I think on the data center side, we see that power performance, the total cost of ownership, selling the solution is the most important piece of it because the solutions are actually quite different in terms of what you can do between fourth gen EPYC and other solutions,” said Su. “The environment is always competitive, but we feel very good about the overall value proposition that we bring to both cloud and enterprise customers.”
Another major driver of growth will be AI, as it becomes increasingly central to user interaction with digital products. Since being founded in 50s and going through several boom-and-bust cycles, AI seems finally seems to have come to the mainstream in the last six months.
“We expect AI adoption will accelerate significantly over the coming years and are incredibly excited about leveraging our broad portfolio of CPUs, GPUs and adaptive accelerators in combination with our software expertise to deliver differentiated solutions that can address the full spectrum of AI needs in training and inference across cloud, edge and client,” noted Su.
Su is one of the first CEOs to break through the tech industries glass ceiling changing people’s ideas of what a tech executive looks like. Only 28% of computational or mathematical roles are held by women. And according to one business consultancy 52 women are promoted to manager for every 100 men in tech sector.
With Lisa Su generating returns like this, Moore’s law could change more than just semi-conductor development.
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