Business Breakdowns
Episode 73 AMD: How Chips Are Changing
Business Breakdowns

Episode 73: AMD: How Chips Are Changing

Business Breakdowns

Episode 73

AMD: How Chips Are Changing

Jay Goldberg is a semiconductor industry consultant at D2D Advisory and a Partner at Snowcloud Capital. We cover the rise of custom silicon, AMD's competition with Intel and Nvidia, and whether chip-making is a good business.

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[00:02:27] - [First question] - Where to start when it comes to understanding semiconductors 

[00:04:21] - Why semiconductors were created in the first place  

[00:04:57] - Key milestones and players in the semiconductor industry 

[00:07:35] - What are the factors that determine who wins and loses

[00:08:37] - The semiconductor industry map today writ large

[00:12:05] - How the changing geopolitical landscape affects power in this sector 

[00:14:15] - Why we can’t just throw unlimited money at this problem to solve it 

[00:15:30] - Whether or not chip businesses are actually defensible and good businesses

[00:17:37] - Differences between CPUs and GPUs and how everything we do uses them

[00:22:56] - AMD’s history with CPUs and GPUs and how they’ve evolved over time

[00:26:55] - Why there is such a high barrier to enter and disrupt the chip design market

[00:31:54] - A future where we transition to specific and specialized use-case chips 

[00:35:36] - Companies like Google and Apple building their own in-house chips

[00:38:55] - Other industries where this dynamic exists outside of semiconductors

[00:41:57] - The scope and economics of AMD today 

[00:44:26] - What’s important to know about AMD and Intel’s capital allocation strategies

[00:47:28] - What he’d focus on if he was the capital allocator for a big chip company

[00:48:55] - One major lesson that this industry has taught him about investing

[00:50:28] - Major lessons about AMD and the world writ large that isn’t addressed yet

AMD: How Chips Are Changing

Introduction

Patrick
Today, we're breaking down a global semiconductor company known as AMD. AMD isn't the biggest and it hasn't always been the best chip-maker in the world, but as cyclical and structural changes take place in the semiconductor industry, AMD serves as a great proxy for what's going on and why. To break down the details both behind the company and the industry, I'm joined by Jay Goldberg, a semiconductor industry consultant and partner at Snowcloud Capital. We explore the rise of custom silicon, AMD's competition with Intel and Nvidia, and whether chip-making is a good business at all. Please enjoy this breakdown of AMD.

The US Semiconductor Industry and Geopolitical Power Shifts

Patrick
So Jay, I know a lot of the story that we're going to tell today about a single business, AMD, is really also the story of the US semiconductor industry large, and we'll blend those two stories together, being sure to touch on what makes AMD specifically interesting and the lessons it can teach us, but I also want to make sure that we set the stage in the right way. You mentioned something very simple before we hit record, which was the story of riches to rags to riches, and maybe back to rags, in the US semiconductor industry. What do you think the right place to start this story is as we think about educating everyone out there on US semiconductors and the key things that have mattered historically?

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