Advanced Micro Devices (NASDAQ:AMD) has been hot on the heels of NVIDIA (NASDAQ:NVDA) in the graphics card market in recent years, giving the market leader a run for its money every now and then. But AMD may now finally have the ammunition necessary to blow a hole in NVIDIA’s GPU (graphics processing unit) moat thanks to its newly launched RX 6000 series graphics cards.
NVIDIA’s new headache
NVIDIA recently released its latest graphics cards, which is based on the new Ampere architecture and brings serious performance gains without bumping up prices as compared to its predecessors. But AMD looks all set to give NVIDIA sleepless nights with its new range of graphics cards based on the RDNA2 architecture, promising double the performance and a 54% increase in performance-per-watt (power efficiency) compared to the previous-generation RDNA cards.
AMD is now taking aim at the premium end of the GPU market, which has been the territory of NVIDIA thus far. Priced at $999, AMD’s flagship Radeon RX 6900 XT closely matches NVIDIA’s flagship offering — the RTX 3090 — in terms of performance, according to AMD’s internal benchmarks. For instance, the RX 6900 XT clocks an average of 150.1 frames per second when running the popular Doom Eternal title at the highest settings in 4K resolution, compared to the RTX 3090’s 151.6 frames per second.
But the RTX 3090 carries a much higher starting price tag of $1,499, so AMD is claiming to give gamers much better value for money. The RTX 3080 founders’ edition card and the AMD Radeon 6800 XT graphics card are also closely matched in terms of performance while running the same gaming title at 4K resolution. However, the RX 6800 XT is cheaper at $649, compared to the RTX 3080’s starting sticker price of $699.
Meanwhile, AMD claims that its new graphics cards are better than NVIDIA’s while running Doom Eternal at quad high definition (QHD) at the highest settings. AMD has carried out internal tests across several games, such as Call of Duty: Modern Warfare, Shadow of the Tomb Raider, and Forza Horizon 4, among others — and it claims to either better NVIDIA’s offerings or closely match them in performance terms depending on the settings.
Of course, it would be a good idea to take the benchmarks with a grain of salt, as they are conducted by AMD’s internal labs and not by a reliable third party. But they do indicate that AMD may have stepped up its game in the GPU market with its new cards, paving the way for a potential increase in its market share.
AMD may be about to level up
AMD made impressive gains in the GPU space in the first quarter of 2020, when its market share reached nearly 31%, compared to 22.7% in the year-ago period (with the rest being held by NVIDIA, according to Jon Peddie Research). But NVIDIA made a solid comeback in the second quarter of the year as AMD’s share dropped to 22% from nearly a third of the market a year ago.
NVIDIA’s comeback was driven by the company’s pricing power. It reduced the price of its older GPUs in preparation for the launch of the new Ampere cards, which helped the company gain more customers in the second quarter. Additionally, the launch of the RTX 30 series cards at aggressive price points meant that customers were buying them hand over fist in the third quarter.
The third-quarter GPU market share numbers aren’t out yet, but NVIDIA may have moved more units than AMD during that period considering how quickly the RTX 30 series cards were going out of stock. Now that AMD claims to have plugged the performance gap with NVIDIA and is offering its latest cards at lower prices than its rival, it could regain its mojo and cut the latter’s GPU lead in the forthcoming quarters.