[Chipformation] AMD's Value Soars Amid ChatGPT Craze

Price Surges Over 30% in Two Months

[Asia Economy Reporter Park Sun-mi] As global interest in ChatGPT heats up, AMD, which possesses the capability to design high-performance semiconductors (chips) used to power artificial intelligence (AI), is seeing its stock price surge.

AMD, listed on the U.S. Nasdaq market, had a closing price of $64.77 at the end of last year, but it has jumped to around $85 this month. It has surged more than 30% in just two months. Its market capitalization stands at $136.5 billion, surpassing competitor Intel's $116.8 billion.

The recent sharp rise in AMD's stock price is largely due to the influence of ChatGPT, the AI chatbot that is captivating the world. AI operation requires high-performance processors capable of massive computations. This perfectly aligns with AMD’s business areas of central processing units (CPU) and graphics processing units (GPU). AMD competes with Intel in the PC CPU and server semiconductor markets, and with Nvidia in the GPU market. AMD’s flagship products include the Ryzen CPU and Radeon GPU series.

Recently, AMD released the world’s first Instinct MI300 chip, which combines CPU and GPU. It supports efficient AI performance and high-performance computing (HPC) workloads (tasks that a computer system must process within a given time). Compared to the previous model MI250, its performance is eight times higher and battery efficiency is five times better, making it ideal for high-performance supercomputers.

When AMD was founded in 1969, it handled both semiconductor design and manufacturing, but now it focuses solely on design. In particular, it is concentrating on chip design that implements high-performance products leading the industry by pushing beyond the limits of possibility. AMD aims to provide evolved mobile, gaming, and AI solutions and drive innovation across various fields including AI, hybrid work, gaming, healthcare, aerospace, and sustainability.

Lisa Su, CEO of AMD

Despite a sluggish IT demand environment, AMD’s performance in the fourth quarter of last year exceeded market expectations. The weakness in the PC business due to recession concerns was offset by expansion in data centers and AI product lines, resulting in fourth-quarter revenue of $5.599 billion, a 16% increase from the same period last year, surpassing experts’ forecasts. Although operating profit decreased by 5% to $1.262 billion, it was considered a strong performance compared to Intel, which turned to losses.

Behind AMD’s growth is CEO Lisa Su, who has led the company for nearly a decade. She is recognized as a woman who broke the thick glass ceiling of Silicon Valley. Becoming AMD’s first female CEO in 2014, she revived AMD from the brink of bankruptcy. AMD has now grown into a formidable competitor to CPU leader Intel and GPU leader Nvidia. This is considered AMD’s prime time.

Last month, at CES 2023, the world’s largest electronics and IT exhibition held in Las Vegas, USA, she delivered the keynote speech, stating, "AI, which we use every day, is an important mega-trend in future technology," and added, "To provide AI capabilities to all devices, multiple computing engines are needed, and we are the only company in the world that has all the necessary engines."