Advanced Micro Devices CEO Lisa Su said in an analyst call that her company’s good third-quarter results and other progress shows “We are right where we want to be on our long-term strategic plan.”
AMD reported earnings for the most recent quarter (which ended September 30) that roughly matched Wall Street’s expectations.
The big chip maker announced earnings per share of 18 cents on revenue of $1.8 billion, not quite meeting analysts’ expected EPS of 18 cents on revenue of $1.81 billion. In after-hours trading, AMD’s stock price is down 2.4% to $32.36 a share.
In the analyst call, Su said higher processor sales were offset in part by lower graphics channel sales for Radeon graphics processing units (GPUs).
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“We delivered our highest quarterly revenue since 2005, our highest quarterly gross margin since 2012, and increased net income significantly … all driven by our first full quarter of 7 nanometer Ryzen, Radeon, and Epyc processor sales,” Su said.
She added that demand for Ryzen desktop and notebook processors drove a significant increase in unit shipments and average selling prices (ASP), resulting in the highest client processor quarterly revenue since 2011. She also said the company gained client processor unit share for the eighth straight quarter against rival Intel, thanks to the architectural advantage AMD has with the Zen and Zen 2 chip designs.
AMD has made gains with Ryzen in the consumer sector, and it is also expanding its presence with commercial, financial, retail, education, and healthcare customers. The company’s alliance with Samsung, which is beginning to use Radeon graphics technology in its smartphones, is starting to generate revenue for AMD.
“We are on track to expand our desktop product offerings in November with the launches of the industry’s first 16 core mainstream desktop processor, as well our third-generation Ryzen Threadripper processor family,” Su said. “These products will offer unmatched combinations of core counts [and] performance energy efficiency for the most demanding high-end desktop and content creation applications.”
Above: AMD’s Ryzen 3000 Series
Su said the number of AMD-powered laptops from major computer makers has increased by 50% this year, including multiple premium notebooks, like the first-ever AMD-powered Microsoft Surface laptop.
For mainstream gamers, AMD began shipping the Radeon RX 5500 GPU in the third quarter. Acer, HP, Lenovo, and MSI announced plans to offer the new GPU in their upcoming PCs, and multiple add-in board partners plan to launch RX 5500 cards during the fourth quarter.
Datacenter GPU sales were down sequentially and roughly flat year-over-year, but Su said AMD added multiple cloud and HPC wins in the quarter. AMD also faced a headwind from the looming threat of tariffs against China and, as a result, was not able to ship as many chips as expected.
AMD supplies chips to both Microsoft and Sony for their game consoles, and Su cited softness in the market as those companies wind down sales of the previous generation and prepare to launch new consoles in late 2020.
As for the datacenter, AMD’s second-generation Epyc processors are the highest-performance server CPUs in the industry and have set more than 100 world records, Su said.
The newest Epyc processors feature up to 64 cores and deliver a 25% to 50% total cost of ownership advantage versus competitive offerings, Su said.
In cloud, Amazon AWS, IBM Cloud, Microsoft Azure, OVHcloud, Twitter, and Tencent all announced plans to deploy Epyc processors in their datacenters.
“We are right where we want to be on our long-term strategic plan,” Su said. “We have the strongest product portfolio in our history. We executed our product launches and production ramps very well in the third quarter as our new products drove higher revenue, margin expansion, and increased profitability.”
