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 quarter ended September 30 that roughly matched Wall Street’s expectations for the maker of processors and graphics chips.
The big chip maker announced earnings per share was 18 cents on revenue of $1.8 billion. 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 an analyst call, Su said that higher processor sales were offset in part by lower graphics channel sales for Radeon graphics processing units (GPUs).
“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 said 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 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 consumer, and it is also expanding its presence in commercial, financial, retail, education, and healthcare customers. AMD also has an alliance with Samsung, which is beginning to use Radeon graphics technology in its smartphones. That 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, performance energy efficiency for the most demanding high-end desktop and
content creation applications.”
Above: AMD’s Ryzen 3000 Series
Image Credit: AMD
Su said the number of AMD-powered laptops from major computer makers has increased by 50 percent 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.
Data center 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 head wind from the looming spectre of tariffs against China. It was not able to ship as many chips as expected, as a result.
AMD supplies chips to both Microsoft and Sony for their game consoles, and Su said there was softness in that market as those companies wind down sales of the previous generation and prepare to launch new consoles in late 2020.
As for the data center, 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 data centers.
“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.”