AMD reported Q1 revenue that was up yearly and sequentially, and it seems to be making good inroads in the data center market segment.
AMD reported 2021 first quarter revenue of $3.45 billion, nearly doubling the $1.78 billion it tallied a year ago in Q1 of 2020. On a sequential basis, revenue was up 6% from the immediately preceding quarter. CEO Lisa Su said that demand remained strong across all market segments, driving sales of most of the company’s product line, but especially its Ryzen CPU, Epyc processor, and Radeon GPU products.
Should that be the case, the company most likely to be losing market share to AMD is Intel.
Su and CFO Devinder Kumar held court during the company’s quarterly conference. In prepared comments and during in the subsequent Q&A session with analysts, the two execs were parsimonious with specific details but were optimistic about the market and AMD’s prospects moving forward.
AMD had been projecting annual growth of about 37% for 2021 over 2020, but the company announced it is raising its growth estimate to 50%. Su said that given consistent sales growth — including an especially strong first quarter, coupled with increased visibility with customers, the company’s confidence is growing.
Perhaps because of the supply chain problems that the semiconductor industry has been experiencing (“…the supply chain has been tight overall,” she said), customers are being clearer about their needs, she said. Ordering is firming up, and schedules are being confirmed.
Su was characteristically short on specifics about markets, but she did note that the data center segment in particular looks good moving into Q2. It certainly looked pretty good in Q1. The company’s Enterprise, Embedded and Semi-Custom segment is essentially its data center operation; revenue in that segment was $1.35 billion, up 286 percent year-over-year and 5 percent from the immediately preceding fourth quarter. Su said AMD is doing business with Microsoft Azure, Oracle, Amazon, Tencent and other major data center operators.
The company is attacking the data center market with its Epyc line of processors. Su said the second generation version, called Rome, and the third generation version, called Milan, are going to co-exist through 2021, but sales of Milan will likely overtake Rome sometime in the third quarter.
The fourth generation part, nicknamed Genoa, is expected later in 2021 or in 2022; Genoa went unmentioned during the conference call.
Su also said that AMD is also doing well in higher-end notebook computers, as well as in gaming. Gaming is still a small business for AMD, albeit one with a lot of potential for growth.
Su was questioned by multiple analysts about the company’s rivals, sometimes fastidiously referenced only with oblique references, but sometimes mentioned by name: Intel, Nvidia, and Arm. Arm is invoked to stand in for the many companies —including Nvidia — that build competing products using Arm processor cores (AMD itself uses Arm-based processors). Su deftly sidestepped the questions, saying that AMD always expected its markets to be highly competitive, pointing to the company’s growing success, and repeatedly emphasizing the company’s roadmap of future innovation.
Additional Q1 financial results include net income of $555 million (GAAP), up from $162 million in the first quarter a year ago, but down from the $1.7 billion net in the immediately preceding Q4 2020. Note that AMD’s Q4 included a tax benefit of $1.3 billion.
For the second quarter of 2021, AMD expects revenue to be approximately $3.6 billion, plus or minus $100 million, an increase of approximately 86 percent year-over-year and 4 percent quarter-over-quarter. “The year-over-year increase is expected to be driven by growth in all businesses,” according to the company. “The quarter-over-quarter increase is expected to be primarily driven by growth in data center and gaming.”
This article was originally published on EE Times.