The Santa Clara, California-based Advanced Micro Devices announced Tuesday its second-quarter earnings of 2020 and reported revenue growth of 26 percent worth $1.93 billion year-over-year driven by Ryzen and EPYC processor sales.
“We delivered strong second-quarter results, led by record notebook and server processor sales as Ryzen and EPYC revenue more than doubled from a year ago,” said Dr. Lisa Su, AMD president and CEO.
Despite some macroeconomic uncertainty, we are raising our full-year revenue outlook as we enter our next phase of growth driven by the acceleration of our business in multiple markets.”
AMD posts Revenue Growth
The company said that revenue was up 8 percent quarter-over-quarter primarily driven by higher enterprise, embedded and semi-custom segment revenue. The latter represents chips for game consoles. The pandemic may have hit some segments, but the work from home mandate means that more people are investing in upgrading their computers and are indulging their gaming habits.
Net income for AMD was $157 million compared to net income of $35 million a year ago and $162 million in the prior quarter.
Diluted earnings per share was $0.13 compared to diluted earnings per share of $0.03 a year ago and $0.14 in the prior quarter.
AMD is witnessing an upswing in its business with its nearest rival, Intel, facing problems in delivering its products on time. AMD has gone ahead in its innovations with a well-defined Zen 2 processor architecture and a cost-efficient 7-nanometer manufacturing process with its partners.
AMD has also come up with a set of graphic chips in competition to market leader Nvidia. It is channeling ahead full speed with the designing of its next-generation processor architecture, Zen 3, too.
With Intel having manufacturing delays, AMD is moving ahead with its partnership with the Taiwan manufacturing company, TSMC. Intel’s latest technology, the 10 nanometer, was announced for 2017 production but it got delayed and has only now moved into mass production. The latest iteration of nanometer 7 is nowhere under production. This is bad news for Intel, but for AMD, it is added business opportunities.
In a press statement, AMD said that for the third quarter of 2020, it expects revenue to be approximately $2.55 billion, plus or minus $100 million, an increase of approximately 42 percent year-over-year and 32 percent sequentially. The year-over-year and sequential increases are expected to be primarily driven by Ryzen and EPYC processor sales and next-generation semi-custom products. AMD expects non-GAAP gross margin to be approximately 44 percent in the third quarter of 2020. Gross margin is expected to increase year-over-year primarily driven by Ryzen and EPYC processor sales.
AMD now expects 2020 revenue to grow by approximately 32 percent compared to 2019 driven by strength in PC, gaming and data center products. Non-GAAP gross margin is expected to be approximately 45 percent.
In after-hours trading, AMD’s stock price rose 7% to $72.34 a share.
AMD is in Advanced Talks to Buy Xilinx For Over $30 Billion
If the AMD chipmaker gains Xilinx, it would spring AMD an arsenal of products to contest with Intel’s reprogrammable chip solutions in the data center, amongst other markets. ‘We‘re exclusively positioned, unlike supreme companies in the data center space, the IT solution space, to cover the whole scale of segments within IT,’ a Xilinx rep told CRN earlier this year.
AMD is allegedly close to attainment a deal to obtain programmable chipmaker Xilinx for more than $30 billion — a move that could contribute the company another arsenal of products to compete with rivals Intel and Nvidia.
The Wall Street Journal reported 8th Oct, 2020 Thursday night that the two companies are in progressive discussions, and a deal could be touched as early as next week. However, the newspaper cautioned, talks could unravel since they have already stalled once.
The report of the deal comes less than a month after AMD’s other rival, Nvidia, proclaimed that it plans to acquire British chip designer Arm for $40 billion.
AMD Acquisition of Xilink
The company is hunting the data center market with a lineup of Alveo accelerator cards, which Xilinx says provide “adaptable” great performance for applications ranging from storage and data analytics to machine learning and streaming video.
“We‘re exclusively positioned, unlike most companies in the data center space, the IT solution space, to cover the whole gamut of segments within IT,” Aaron Behman, director of video product marketing for Xilinx’s Data Center Group, told CRN earlier this year.
If AMD acquired Xilinx— whose market value is $26 billion market value, The Wall Street Journal renowned — it would give the chipmaker an arsenal of products to contest with Intel’s FPGA solutions that were extended through the rival’s $16.7 billion acquisition of Altera in 2015. But AMD would also achievement another way to compete with Nvidia since Xilinx has situated its Alveo accelerator cards as worthy competition for Nvidia’s data center GPUs.
Santa Clara, Calif.-based AMD has been assembly bigger strides in the data center, most freshly with its second-generation EPYC processors that have endorsed the company to claim double-digit share in the x86 server market against Intel. The AMD company is also planning new data center GPUs based on a new CDNA architecture.
“We sensation that customers are actual open across cloud, OEM, enterprise. It‘s on us to perform, and we ponder about that every day,” AMD CEO Lisa Su said in the company’s furthermost recent earnings call. ”But in terms of where the roadmap is, what are we demanding to achieve, where the customers are, there’s a pull from customers to participate us across a number of workloads.”