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AMD is now following More's Law: More chips, more money, more pressure on Intel, more competition in the x86 space

Chipzooky's fortunes are Ryzen Epyc-ly

AMD on Tuesday said it had made it through a healthy second quarter of 2020 during which its Ryzen and Epyc microprocessor lines doubled their revenues.

Just after rival Intel admitted this month it is stuck in 7nm hell and has ousted its beleaguered engineering supremo, AMD published encouraging financial figures for the three months to June 27. Here's the summary:

  • Revenues of $1.93bn were up 26 per cent from the year-ago quarter, and beat the $1.86bn Wall Street had estimated.
  • Net income of $157m was well up from the $35m profit AMD turned in Q2 2019.
  • GAAP earnings per share of $0.13 just about topped analyst forecasts of $0.01. It's non-GAAP EPS of $0.18 also beat by a cent.
  • Gross margin of 44 per cent up three percentage points, year on year.
  • Compute and Graphics (end-user CPUs and GPUs) logged revenues of $1.37bn, an increase of 45 per cent year over year and in line with Wall Street's expectations. While desktop revenues were down for both units, AMD said that huge laptop sales during the work-from-home pandemic more than made up for it.
  • Enterprise, Embedded, and Semi-Custom group logged revenues of $565m, down four per cent. Don't blame Epyc, however, as the server business soared, we're told. AMD noted this is the first time its data-center revenues accounted for more than 20 per cent of its total revenues. AMD's embedded division has not exactly been a pillar of the chip giant, we note, and its semi-custom wing, designs silicon for video-game consoles, ebbs and flows with the computer games world's system launches.
  • AMD said that, combined, the server-class Epyc and PC-aimed Ryzen processors lines more than doubled their revenues from the year-ago quarter.
  • Unlike many other tech companies, AMD is not holding off on guidance for the coming months. In Q3, CEO Lisa Su and co expect to see revenues clock in around $2.55bn, a roughly 42 per cent increase. For the full year, AMD now expects revenues to rise 32 per cent.
  • Third-generation desktop 7nm Zen microprocessors, fabricated by TSMC, are due to ship this year, plus third-generation Eypc Milan and CDNA GPU server parts. GPUs using the RDNA 2 architecture, to feature in the Sony PlayStation 5 and Microsoft Xbox Series X consoles, are also due to arrive this year.
  • AMD is also seeming still on track to hit the market next year with a line of 5nm Zen 4 chips courtesy of TSMC.

In discussing the returns with analysts on a conference call, CEO Dr Lisa Su declined to say much about Intel's struggles, though did suggest that AMD sees itself with an advantage when it comes to winning over PC and server manufacturers: a roadmap that doesn't change every other month... unlike Intel's, cough, cough.

"We have said you can count on us for a consistent roadmap," said Su. "We feel customers are very open across cloud, OEM, and enterprise."

Su also touched on the possibility that AMD could find itself with another competitor in the desktop and server markets as Apple puts its weight behind Arm-compatible processors and potentially creates a larger ecosystem for the architecture.

"I still believe this is not about Arm vs x86," Su said. "It is about what performance do you offer, what capabilities do you offer, what the overall ecosystem is. And in that sense we still feel confident."

Analysts were also confident, as AMD shares surged to the tune of 10 per cent at $74.36 in after-hours trading. ®

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