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AMD again set a record for quarterly revenue, but the deficit does not promise to win
27.01.2021 [03:13],
Ilya Gavrichenkov

AMD posted fourth-quarter and full-year financial results with unprecedented agility. Revenue increased in all columns of the report: the company strengthened its position both in the direction of customer products and in the segment of corporate, embedded and semi-custom solutions. As a result, AMD was able to report that its total quarterly revenue exceeded $ 3 billion for the first time.

AMD revenues for the fourth quarter of 2021 were $ 3.24 billion, which exceeds the result of the third quarter by 16%, and the result of the fourth quarter of 2021 is an impressive 53%. At the same time, AMD’s annual revenue for the entire 2021 reached $ 9.76 billion, improving the indicator of 2021 by 45%. Excluding expenses, the result was a quarterly profit of $ 1.78 billion, and for the full year the company was in profit of $ 2.49 billion, which in both cases means hundreds of percent growth in both quarterly terms and year-on-year.

The main contributor to AMD revenues in the last quarter was the segment of client processors and graphics products. Quarterly revenue in this area is $ 1.96 billion, which indicates an increase of 18% both in comparison with the third quarter and the fourth quarter of 2021. The growth driver in this segment is the outstanding sales of Ryzen processors. However, the increase in the share of mobile offerings in AMD’s sales has led to a slight decrease in the selling price of the average processor compared to a year ago. But the Zen 3 architecture began to smooth out this negative trend for the company, and in a quarterly comparison, the average realized price returned to growth.

In the server, embedded and semi-custom segment, where AMD includes not only EPYC processors, but also chips for game consoles, revenue for the fourth quarter reached $ 1.28 billion, which indicates 13% growth since last quarter. But if we compare this figure with revenue in the fourth quarter of 2021, then the growth will be 176%, which, as you might guess, is due to the release of a new generation of Microsoft and Sony game consoles. However, AMD also mentions new deals for the supply of EPYC processors, for example, for Alibaba, AWS and Oracle.

Naturally, during the quarterly report, the topic of deficit could not be ignored. According to the head of the company, Lisa Su (Lisa Su), underdelivery affects primarily products for gaming applications (CPU, GPU and console chips) and budget solutions. Demand here clearly exceeds supply, but the situation will not improve until TSMC has additional production capacity, which will have to wait at least until the middle of the year.

For the first quarter of 2021, AMD predicts that revenue will remain at the taken level of $ 3.2 billion, and for the entire coming year the company plans to earn more than in 2021 by 37%. Four factors should help AMD achieve these targets. First, the widespread adoption of the Ryzen 5000 mobile processors, which are already being used by laptop manufacturers twice as much as their predecessors at the time of their launch. Second, increased sales of Radeon RX 6000 series graphics solutions with the new RDNA 2 architecture, which will be replenished in the first half of the year. Third, the upcoming release of Milan-generation EPYC processors in March. Finally, an increase in sales of semi-custom chips for game consoles in the first half of the year is predicted to be a somewhat unusual trend.

After the publication of the quarterly report, the share price of AMD remained practically unchanged, as the results were fully in line with the expectations of investors. Intel shares also showed little reaction.

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