Carmack predicts “we’ll see a couple more node shrinks” but that’s it for CPU silicon

Notably TSMC, Samsung, and Intel. You can kind of toss Global Foundries in there, though it threw in the towel owing to the difficulties it was having in …

Big John Carmack (or just Big John to his friends) is expecting another couple of process node shrinks for traditional CPU silicon, “but it is going to get an end of the line” after that. Speaking on The Joe Rogan Experience podcast, Carmack covers a whole host of topics, from his early days to his work at Oculus, but also looks to the end of Moore’s Law and the end of the line for silicon processors. And wears a dreadful dad-shirt too. Seriously, John?

Because of the cost of building new fabs – the multi billion dollar cost – there are only a handful of companies left in the high-performance silicon game. Notably TSMC, Samsung, and Intel. You can kind of toss Global Foundries in there, though it threw in the towel owing to the difficulties it was having in getting its 7nm process working. Though that hasn’t stopped it from trying to claim some kind of IP shenanigans regarding that node as it seeks to squeeze some cash out of TSMC, Nvidia, and others.

It kind of depends on what Carmack sees as ‘nodes’ but TSMC has got visibility down to what it is calling its 3nm (or N3) process, by way of an updated 7nm (N7P), 6nm (N6), 5nm (N5), and updated 5nm (N5P) process.

“They will have full confidence that we’ll see a couple more node shrinks,” says Carmack. “so it’ll still make chips cheaper, somewhat faster, more cores on them, but it’s going to get an end of the line.

“But I hold out hope for potential other things, you know. There are directions that maybe you have your carbon nanotube wires, or you’re starting to be able to do some things with photonic processing in different ways. There are possible outs for it, but I don’t know that any of them are a sure enough things to really be counting on at this point.”

We have just heard about the first carbon nanotube processor being built using existing, standard fabrication technology, but so far that’s still only rocking some 14,000 transistors. Considering the Ryzen 9 3900X, AMD’s latest 12-core 7nm processor, comes sporting 9,890,000,000 transistors, it looks like Carmack’s right about not counting on the ‘wonder material’ replacing silicon anytime soon…

With TSMC promising 3nm production by 2022 on the FinFET technology, and Carmack suggesting we could be hitting the wall soon after that, there’s not a lot of time left for that ‘sure thing’ to appear and keep things moving forward in die shrinks and transistor count terms.

Samsung transistor designs

There are still alternatives within silicon that could keep things bounding down to the 1nm level – the gate all around (GAA) tech, for example. This is being touted as offering a path to smaller nodes beyond 3nm, by essentially created multiple tubes or nanowires, rather than fins, to deliver transistors with multiple gates on them.

We might not have to rely on such futuristic materials as carbon nanotubes either, as gallium nitride has also been touted as a possible replacement. Though it has yet to be used effectively in a microprocessor it has been used in tech like powerpacks. It can hold up to far higher temperatures than silicon and can be more efficient too. But the creation of gallium nitride isn’t as mature as silicon, is a lot more expensive as a result, and it’s difficult to get the sort of purity microprocessors would need.

So yeah, basically Carmack is right – of course he is – we’re still a long way from knowing what that ‘sure thing’ will be to replace silicon, but it’s probably already in some lab somewhere.

Think we’ll get beyond 1nm with silicon? Join the conversation on this article’s Facebook and Twitter threads.

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AMD Zen 3 design finalised on 10% faster 7nm+ node

TSMC’s 7nm+ would be able to offer a performance increase inline with AMD’s previous Ryzen refresh of around 10% according to the pure-play …

AMD Zen 2 only just launched and we’re already talking up Zen 3… the cycle never ends. But that’s great for us PC hardware enthusiasts, and AMD has officially announced that the Zen 3 architecture design has been finalised on the 7nm+ process node ready for its expected 2020 launch.

The confirmation comes from AMD’s recent 2nd gen EPYC launch event (via TechPowerUp). The slides suggest there will be no more intermediary steps in its architecture nomenclature, as has previously been the case – such as the shift from Zen to Zen+. It would appear the shift from 7nm to 7nm+ has been deemed worthy of the Zen 3 title. But while that may imply its a more significant step up on Zen 2 than Zen+ was to Zen, there has never been any mention of Zen 2+, so it’s not like anything appears to have changed over at the red camp.

TSMC’s 7nm+ would be able to offer a performance increase inline with AMD’s previous Ryzen refresh of around 10% according to the pure-play foundry. TSMC’s refined 7nm node, N7+, will utilise extreme ultraviolet lithography, or EUV. Using a short 13.5nm wavelength, EUV is intended to speed up semiconductor manufacturing by reducing the necessary masking and processes required by longer wavelengths to create today’s minuscule processors.

A Zen 2 refresh on the new node seems the likely direction for team red, instead leaving the big changes to Zen 4 in 2021. But we can’t say for sure just yet. Over at AMD’s EPYC launch event the company also confirmed the Zen 4 architecture is in design stage, but, seeing as AMD’s confirmed ‘leapfrogging’ design teams in the past, that’s to be expected.


— Yusuke Ohara/大原 雄介 (@YusukeOhara) August 7, 2019

Zen 4 will likely utilise the 6nm process node: a refined variant of the 7nm process node. Yep, process node naming is often gibberish. While TSMC is well on its way to 5nm, the 6nm node may make for a better fit for AMD as it follows all the same design rules as the 7nm node it currently employs with Zen 2.

AMD’s backwards compatibility pledge also ends next year, which will likely see Zen 3 the last to utilise the AM4 socket and Zen 4 the first of a new socket cycle. Maybe it’s time, the AM4 socket has been with us since 2016.

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Highlights of the day: US tariffs hitting supply chain

TSMC and Intel may have to lower their guidances. Intel also faces strong challenges from AMD, who sees growing popularity for its latest 7nm …

The latest US move to slap 10% tariffs on US$300 billion worth of Chinese goods has cast a shadow over the prospect of a significant recovery for the IT supply chain in the second half of 2019. TSMC and Intel may have to lower their guidances. Intel also faces strong challenges from AMD, who sees growing popularity for its latest 7nm offerings.

US new tariffs on Chinese imports may dim TSMC, Intel prospects: The Trump administration’s latest move to slap a 10% tariff on the remaining US$300 billion worth of Chinese imports, including handsets, notebooks and TVs, starting September 1 may significantly dent the sales upturn momentum for terminal markets, which in turn will cloud the prospects for relevant supply players, with even TSMC and Intel very likely to adjust downward their guidance at least for the fourth quarter of the year, according to industry sources.

AMD to see DIY PC market share hit 10-year high of over 30% by end-2019: AMD has seen growing adoption of its new-generation 7nm chips including Ryzen 3000 seies processors and Radeon 5700 series GPUs by makers of PCs, motherboards and graphic cards as mainstream chipsets, and its share of the DIY PC processor platform market is expected to surge to a 10-year high of over 30% by the end of 2019, according to industry sources.

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Advanced Micro Devices: Playing for Scale

In its other niche, graphics processors, AMD must fight Nvidia (NASDAQ:NVDA) the way it once fought Intel on price. Nvidia’s market share in discrete …

Before Advanced Micro Devices (NASDAQ:AMD) released second-quarter earnings on July 30, I fretted.

A strong quarter was expected but already priced in, I wrote. I called AMD’s valuation difficult to justify.

Sure enough the numbers, earnings of $35 million, 3 cents per share, on revenue of $1.53 billion, sent the stock skidding 10%, even before the market re-opened on July 31. AMD share price of about $30.50 per share was due to open August 1.

AMD took its investors on an exciting ride over the last few years, from $2 per share in 2015 to its most recent highs of $34, on the strength of its beating Intel (NASDAQ:INTC) in microprocessors with its Ryzen designs.

But it’s time to take AMD seriously, as a potential long-term holding and not just a trade. How does it measure up?

AMD Stock Still Too Small

AMD has beaten Intel on the most public stages in the market, on desktop PCs, which have recently gotten their mojo back.

But in the cloud, AMD doesn’t offer the scale and pricing Intel does. Alphabet (NASDAQ:GOOGL) is rumored to be looking at AMD EPYC chips for its servers but, so far, that’s just a rumor. At the present time, AMD’s share of the server chip market hovers around 3%. Its desktop and laptop market share averages 15%.

While AMD has boosted its quality against Intel, thanks in part to Taiwan Semiconductor (NYSE:TSM), which can get circuit lines 7 nanometers (nm) apart while Intel is still struggling with 10 nm, it remains too small to deliver orders to the scale companies like Google need. Thus the Intel monopoly remains largely intact.

In its other niche, graphics processors, AMD must fight Nvidia (NASDAQ:NVDA) the way it once fought Intel on price. Nvidia’s market share in discrete processors hovers between 75%-80%. In the broader graphics market Intel still has 66% of the sales, although it was 75% a few years ago. Where AMD is gaining share in graphics, it’s usually at Intel’s expense, not Nvidia’s.

Where AMD has prospered is in the flashy front of the market, on devices bought by individuals, rather than in the meaty heart of the market, in clouds and servers. In gaming, AMD is the value choice, as it was once the value choice against Intel in PCs.

Advanced Micro Devices Is Up Against the Czars

Nvidia really takes AMD down in the cloud.

With a market cap of almost $103 billion, three times that of AMD, and twice its sales, Nvidia can compete here, especially with its $6.9 billion acquisition of Mellanox (NASDAQ:MLNX), which has yet to close. Nvidia is also way ahead in the “sexy” part of the cloud, in deep learning and artificial intelligence software.

Nvidia is much closer to big cloud orders than AMD. Here, chip makers must compete with one another and with the efforts of the Cloud Czars themselves. Nvidia graphics processors still hold a leadership position against Google’s Tensor chips.

Hardware is becoming software, and in this new world the Cloud Czars have everyone outgunned. AMD makes some nice cloud chips but, at its present size, they’ll never be more than niche offerings.

The Bottom Line on AMD Stock

In the 2020s it will take more than great design for a chipmaker to prosper. It will take scale, and a wide product line that includes software.

Despite its weaknesses Intel still has the scale to compete in this new world. Nvidia is acquiring it. It may be too late for AMD to get there before the Cloud Czars take over the chip world.

Dana Blankenhorn is a financial and technology journalist. He is the author of a new environmental story, Bridget O’Flynn and the Bear, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.comor follow him on Twitter at @danablankenhorn. As of this writing he owned shares in NVDA.

Is Advanced Micro Devices Running Out of Steam?

Those statements indicate that AMD is gaining ground against its two biggest rivals, NVIDIA (NASDAQ: NVDA) and Intel (NASDAQ: INTC). NVIDIA’s …

In computing and graphics, the ASP for AMD’s CPUs rose annually with a higher mix of Ryzen chips, which indicates that it’s gaining pricing power as Intel struggles with its supply issues. However, the ASP for CPUs still declined sequentially due to a higher mix of cheaper mobile processors for laptops and convertibles.

A higher mix of pricier data center GPUs lifted the company’s GPU ASP year-over-year, but that figure also fell sequentially as data center GPU sales dipped and it generated more sales from cheaper gaming GPUs.

However, those year-over-year ASP improvements didn’t translate to better operating income growth for the computing and graphics unit, mainly because its overall revenue declined. However, robust demand for Epyc CPUs boosted the EESC unit’s operating income sequentially and annually.

Q2 2019

Operating income

QOQ growth

YOY growth

Computing and graphics

$22 million




$89 million



Source: AMD Q2 earnings report. QOQ = Quarter-over-quarter. YOY = Year-over-year.

AMD reported an adjusted gross margin of 41% for the second quarter, which was unchanged from the first quarter and a four percentage point jump from a year earlier. It expects that figure to rise to 43% in the third quarter as it sells more Ryzen, Radeon, and Epyc chips.

A decent outlook with a premium valuation

AMD expects its revenue to rise 6%-12% annually (and 14%-21% sequentially) in the third quarter, but that missed the consensus forecast for 18% annual growth and triggered the post-earnings sell-off. It expects its full-year revenue to rise by the mid-single digits, which matches analysts’ expectations for 5% growth.

AMD didn’t provide any bottom-line guidance, but analysts expect its adjusted earnings to rise 39% this year. At a stock price around $30, AMD trades at 47 times that estimate, which is a bit rich relative to its growth rate. Intel and NVIDIA are also striking back against AMD with new chips, and it could be tough for the underdog to juggle concurrent battles against the two market leaders. AMD isn’t running out of steam yet, but investors should be aware of the challenges ahead.

More From The Motley Fool

Leo Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends NVIDIA. The Motley Fool owns shares of Intel and has the following options: short September 2019 $50 calls on Intel. The Motley Fool has a disclosure policy.

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