Lisa Su, president and CEO of Advanced Micro Devices (AMD), owns a third-generation Ryzen desktop processor while speaking during a keynote session at the 2019 Consumer Electronics Show (CES) in Las Vegas, January 9, 2019.
David Paul Morris | Bloomberg | Getty Images
AMD shares were fixed in extended transactions after the company announced revenue and earnings that exceeded Wall Street’s already high expectations for the chip maker.
Here’s how AMD met Wall Street expectations:
- EPS: USD 0.52, adjusted compared to USD 0.47 according to the Consensus estimates
- Income: $ 3.24 billion, compared to $ 3.03 billion, according to Refinitive consensus estimates
AMD also provided a strong forecast for the current quarter of $ 3.1 billion to $ 3.3 billion, saying it expects revenue to grow by 37% in 2021. AMD’s revenues in 2020 increased by 45% year-on-year.
The biggest highlight for AMD this quarter was its business segment, which grew 176% year-over-year and grew 13% from $ 1.28 billion last quarter. This division sells server chips, as well as processors and graphics processors for game consoles such as Sony PS5 and Microsoft Xbox One.
AMD attributed the increase in its semi-custom sales to what it calls the console chip business, and said there was strong demand for the current generation of Sony and Microsoft consoles. He also said that his revenue from the server increased sequentially.
AMD’s sales processors and PC graphics chips, which it calls Computing & Graphics, have grown 18 percent year-over-year to $ 1.96 billion. This was driven by an increase in processor sales, AMD said.
AMD launched new processors and graphics chips last fall, which were constantly sold. He said that the revenue of the desktop processor has increased annually, suggesting that its Ryzen processors are in fierce competition with Intel for market share.
At the beginning of trading on Tuesday, AMD shares have increased by 85% in the last year. This is partly due to investor enthusiasm for semiconductors, but also because, in the last year, AMD has gained a technological advantage over its main competitor, Intel. Intel has been flat in extended transactions.
AMD outsources its production to partners, including TSMC in Taiwan, while Intel is still committed to producing the best chips. This allowed AMD to access more advanced chip production on a so-called 5-nanometer process, making chips denser and more efficient.
In October, AMD announced plans to buy Xilinix in a $ 35 billion deal, which is expected to close by the end of this year. Xilinix focuses on specialized chips that can effectively handle tasks such as video compression compared to AMD general-purpose processors. The acquisition is expected to give AMD more firepower to compete with Intel in the data center chip market.