AMD Plans 70% Price Hike for Instinct MI350 AI Chips

AMD is reportedly considering a significant price increase for its Instinct MI350 series AI chips. The average selling price of these chips is set to rise from 15,000 USD to 25,000 USD, marking a 70% increase. This news has sparked a notable reaction in the market, with AMD's stock price responding positively to the announcement. The potential price hike reflects the growing demand and strategic importance of AI chips in various industries, positioning AMD to capitalize on this burgeoning market. The decision to raise prices could be driven by several factors, including increased production costs, supply chain disruptions, and the high demand for advanced AI capabilities. This move underscores AMD's confidence in the market's willingness to pay a premium for cutting-edge technology.

The price increase is likely to have broader implications for the semiconductor industry, as competitors may need to adjust their pricing strategies in response. Additionally, it highlights the ongoing trend of rising costs in the tech sector, which could impact the affordability of AI solutions for businesses and consumers alike. The market's positive reaction to the news suggests that investors are optimistic about AMD's ability to maintain its competitive edge in the AI chip market. The company's strategic pricing decisions and continued innovation in AI technology are expected to drive future growth and profitability.

AMD's Instinct MI350 series AI chips, launched at the Advancing AI conference in June, include the MI350X and the flagship MI355X. These chips are based on the new CDNA 4 architecture and feature up to 1850 billion transistors, manufactured using TSMC's 3-nanometer process. The primary difference between the two models lies in their cooling methods: the MI350X uses air cooling, while the MI355X employs more advanced liquid cooling. The new chips support the latest FP6 and FP4 AI data types and are equipped with high-capacity HBM3e memory. AMD claims that a single MI350 GPU can run large models with up to 5200 billion parameters, demonstrating its powerful capabilities in AI training and inference. The MI350 series achieves a peak performance of 20 PFLOPS in FP4/FP6 precision, which is four times that of the previous generation MI300X, and its inference performance has improved by 35 times. When running the DeepSeek R1 model, the MI350 series outperforms NVIDIA's B200 in inference throughput, showcasing its strong competitive edge.

Analysts have expressed optimism about the competitive capabilities of AMD's MI350 series AI chips. They believe that these chips have the potential to compete effectively with NVIDIA's Blackwell series. The positive market reaction to the price increase indicates strong demand for AMD's AI products, suggesting that the company's quarterly revenue data may show significant growth. The upcoming financial report, scheduled for release on August 5, will be closely watched by investors, particularly in terms of the shipment speed and coverage of the MI355X data center GPU, which began shipping in June. Analysts expect the MI355X to be priced around 30,000 USD, and AMD has expressed confidence in resuming year-over-year growth in GPU revenue during the third quarter of the 2025 fiscal year. Analysts currently project that AMD's GPU revenue for the third quarter of the 2025 fiscal year will be approximately 16.5 billion USD, reflecting a slight year-over-year increase. This projection takes into account the near 8 billion USD negative impact on AMD's 2025 second half-year revenue due to the export ban on the MI308X chip to China. As a result, analysts and investors are increasingly focusing on whether the MI308X chip will regain export approval to the China market in the second half of 2025.