Data center operators pursue multiple GPU suppliers to reduce dependency on Nvidia's supply constraints.

Data center manufacturers are increasingly diversifying their AI GPU suppliers, with Advanced Micro Devices (AMD) positioned to capture significant market share through its Instinct MI300 series, offering an alternative to Nvidia's H100 GPU. AMD is set to hold the AMD Data Center and AI Technology Premiere on June 13, where CEO Lisa Su will detail the company's AI platform deployment and outlook. The most anticipated product is AMD's Instinct MI300 data center accelerated processing unit (APU), which can compete directly with Nvidia's H100, and industry players expect Su will announce a fourth-quarter mass production timetable.

The MI300 uses TSMC's 5nm process and is designed for high-energy-efficient AI training performance and high-performance computing (HPC) workloads. It employs a 3D chiplet design, combining CDNA 3 GPU, Zen 4 CPU, and HBM chiplet. With the help of TSMC, AMD has significantly improved the performance, yield, and time-to-market of its server platform since 2019. Market acceptance of AMD's server platform continues to grow, with its market share going from zero to nearly 20%, while Intel faces manufacturing delays and supply chain challenges.

Nvidia's A100 and H100 GPUs dominate the global AI GPU market, but supply chain players believe the company will face challenges on its road to dominance. According to supply chain players, Nvidia leads the field in terms of software, hardware, ecosystem strength, price, specifications, and supply. However, upstream and downstream suppliers are weary of seeing one company dominate the market, which would leave little room for price or supply negotiations. Many major companies are already working with AMD, which notes that its EPYC server processors and Instinct MI300 APUs are already being used in supercomputers, with AMD offering competitive pricing.

The supply of Nvidia's A100 and H100 GPUs will remain short through the end of 2023, mainly due to insufficient CoWoS capacity, though TSMC is accelerating its capacity expansion. TSMC estimates its capacity will double in 2024, positioning the company as the biggest beneficiary of the competition between Nvidia and AMD, with the supply chain expected to usher in another wave of growth. To comply with US restrictions on chip supply to China, Nvidia and AMD offer downgraded versions of their AI GPUs for Chinese customers, such as Baidu, Tencent, and Alibaba.