Advanced Micro Devices (AMD), which makes microprocessors, motherboard chipsets, embedded processors and graphics processors for computers and games, has raised its revenue for the year after second-quarter revenue rose to US$1.93 billion from US$1.53 billion in the same quarter a year ago.
AMD, which is based in Santa Clara, California, also announced it now expects 2020 revenue to grow about 32% from 2019, which would equal annual sales of roughly US$8.88 billion.
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Asked why the financial outlook was raised, AMD President and CEO Lisa Su said “demand has gone up from our initial expectations” and that the company sees better-than-expected PC sales in the second half of the year, along with continued data-centre growth and a ramp in gaming console sales.
“We do believe that the market is a little bit better than we thought 90 days ago, but we also believe that our product traction is strong, and we’re seeing that with our customer demand, so those are the reasons for the guidance,” Su said on a conference call.
Intel on Thursday last week said that its 7-nanometer products are six months behind schedule due to slower-than-expected progress with the company’s next-generation manufacturing process, which is 12 months behind. However, Su said AMD had no such concerns.
“When we talk to our customers, it’s about ensuring that they understand we have a consistent roadmap that is pushing the leading edge of performance and ensuring that we deliver the performance improvements that we promised,” she said.
Su said the company plans to start shipping next-generation, 7-nanometer Zen 3 processors, including its EPYC Milan CPUs, as well as next-generation GPUs based on its RDNA 2 architecture for gaming and CDNA architecture for data centres in the second half of the year.
During its Financial Analyst Day in March, the business said its 5nm Zen 4 architecture is on track for launch in 2021 with fourth-generation EPYC Genoa processors.
Su said the company reached its goal of achieving double-digit market share in servers against Intel as the chipmaker‘s revenue for EPYC processors more than doubled in the second quarter, thanks to “broad, high-volume adoption”. The company’s server products overall represent more than 20% of its $1.93 billion revenue this quarter, she added, though it was weighted heavily toward EPYC versus AMD’s Radeon data centre GPUs, which will receive a refresh with the upcoming CDNA parts.
“Our strategy around machine learning is partnered deeply with a couple of large cloud vendors who can invest in software with us, and we see that as a multi-year opportunity,” Su said of AMD’s data centre GPU business.
Su said Ryzen processor sales more than doubled in the quarter from the same period last year, largely thanks to significant growth of the new Ryzen 4000 mobile processors, which presented the company’s fastest product ramp in that category.
Su said while AMD’s “growing nicely in commercial PCs,” the chipmaker is still underrepresented in the segment, which will continue to be a major focus.
“But it’s not a big revenue contributor here in 2020, (though) we see growth opportunity as we go into 2021 and beyond.”
Shares of AMD rose more than 10% in after-hours trading. Twelve months ago, AMD shares were US$33.48. The latest price was US$67.61.