AMD this week Post Its record quarterly revenue was US$3.85 billion. Due to the huge demand for the company’s Epyc processors for servers, Ryzen processors for client PCs, Radeon GPUs, and semi-custom system-on-chips (SoCs), the company’s sales in the second quarter of 2021 compared to last year Compared with the same period, an increase of 99%) is used in game consoles.
Since the company launched the Ryzen and Epyc processors in 2017, AMD’s revenue has been growing steadily, and in 2018 it began to win server designs from major customers. As revenue increases, AMD’s profitability also grows. In the second quarter of 2021, the company announced a net income of US$710 million (a year-on-year increase of 352%), a gross profit margin of 48%, and an earnings per share of US$0.58. Operating cash was US$952 million, an increase of US$888 million over the previous quarter and an increase of US$243 million a year ago. At the end of the quarter, cash, cash equivalents, and short-term investments were $3.79 billion.
The CPU and GPU for client PCs are still AMD’s main business. The company’s computing and graphics business unit revenue was US$2.25 billion, a year-on-year increase of 65% (YoY) and a quarter-on-quarter increase of 7% (QoQ). The operating income of this department was 526 million U.S. dollars, higher than the 200 million U.S. dollars in the same period last year.
The demand for AMD client Ryzen 4000 and 5000 series processors based on the Zen 2 and Zen 3 microarchitecture is still high, and AMD can hardly meet (or rather cannot meet, because many SKUs are not available). As AMD prioritizes the production of high-end processors sold at high prices, the company’s average selling price (ASP) for CPUs has risen, which is part of the reason why the company set revenue and profit records in the last quarter.
The demand for AMD Radeon RX 6000 series graphics cards is also very high. The company said that its GPU ASP increased year-on-year and quarter-on-quarter, which was also driven by sales of Radeon RX 6700/6800/6900 graphics cards as Instinct GPUs for data centers. Unfortunately, the company made no mention of its GPU unit shipments. Like Nvidia’s RTX 30 series GPUs, all AMD’s RX 6000 series graphics cards are usually sold out (at least in the US)
Server and semi-custom segment
AMD’s enterprise, embedded, and semi-custom business units had revenue of $1.6 billion in the second quarter of 2021, a year-on-year increase of 183% and a quarter-on-quarter increase of 19%. The division’s operating income was 398 million U.S. dollars, compared with 277 million U.S. dollars in the previous quarter and 33 million U.S. dollars a year ago.
AMD said that the sales growth of its EESC division was driven by the company’s continued high demand for its Epyc processors for servers and SoCs for gaming consoles. Given the high ASP and higher output of Epyc CPUs, they may now account for a larger share of EESC’s revenue, as they have won multiple contracts with exascalers, enterprises, and leading server manufacturers. At the same time, Sony’s recently announced sales of PlayStation 5 consoles exceeded 10 million units.
Traditionally, semiconductor companies’ revenues peaked in the third quarter, because manufacturers of almost all types of computers and equipment would buy a large number of chips before the back-to-school season and holidays. As far as AMD is concerned, this means increased demand from PC manufacturers for its Ryzen CPUs, Epyc processors from server manufacturers, console SoCs from Microsoft and Sony, and Radeon GPUs in the channel.
The company now expects it to set another record quarter, with revenue reaching $4.1 billion ± $100 million, an annual growth rate of approximately 46% and a month-on-month growth of approximately 6%.