AMD prepares For Zen - clearing inventory

AMD's Zen-based CPUs and its corresponding high-end X370 chipsets will make their arrivals at CES 2017 in January. To achieve a smooth transition, AMD has begun adjusting product prices in order to accelerate inventory digestion reports digitimes.

However, since Zen-based products are unlikely to start mass shipments until after February, they are unlikely to start contributing profits until the second quarter 2017, according to sources from the upstream supply chain.

Sources from motherboard players also noted that AMD's performance has started to improve since early 2016. In addition to stable income from its semi-custom solutions, CEO Lisa Su has also been pushing for more profits in China by licensing its patents, selling its testing and packaging plants, and forming joint ventures.

AMD's Polaris-based GPUs have also helped the company to raise its market share in the discrete graphics card market. AMD's market share rose 4.8pp sequentially to reach 34.2% in the second quarter, according to the sources citing Mercury Research.

However, since Polaris-based GPUs focus mainly on providing a high price-performance ratio, AMD's gross margins from the GPU sector are still far weaker than Nvidia's and the situation is unlikely to improve until AMD's next-generation Vega-based GPUs to hit the market in 2017.

Zen-based processors will be manufactured on Globalfoundries' 14nm FinFET process, featuring an eight-core-16-thread design. AMD will initially release Zen-based high-performance desktop processors (Summit Ridge), while one for notebooks is scheduled to launch at the end of second-quarter 2017.

The high-end X370 chipsets will be launched at CES 2017, while mainstream B350 and low-end A320 will be unveiled later. X370-based motherboards will begin shipments in December.

ASMedia, which is designing and manufacturing chipsets for AMD's processors, is also expected to see rising revenues with the releases of the new CPUs.