The chip maker is keeping the pressure on Intel as the sales momentum for its Ryzen and EPYC processors continues. However, the bigger x86 semiconductor adversary is planning to fight back with new server chips as a growing number of companies turn to arm-based processors for a variety of workloads.
AMD announced that it nearly doubled its revenue in the first quarter of 2021 compared to the same period last year as sales of the chipmaker’s Ryzen and EPYC processors grew rapidly – a sign that the company’s momentum is facing the x86 rival Intel is not giving up.
The stock price of the Santa Clara, California-based company rose approximately 3.8 percent after the release of its financial report for the first quarter on Tuesday after close of trading. The company announced that its revenue for the quarter, which covers January through March, increased 93 percent year-over-year to $ 3.4 billion and exceeded Wall Street expectations by $ 270 million . The net profit of 52 cents per share was 8 cents above the expectations of Wall Street analysts.
[Related: Nvidia Reveals Arm-Based Data Center CPU Against Intel, AMD]
The momentum in the first quarter prompted AMD to increase its forecast for full year revenue growth from 37 percent in the previous quarter to 50 percent.
Lisa Su, CEO and President of AMD, said on the company’s announcement that it has « entered a high-performance computing megacycle with the strongest products and deepest customer relationships » in the chipmaker’s 51-year history.
She said AMD’s client CPU sales, which include high-end Ryzen brand, are « growing significantly faster » than the PC market as demand for new computers remains strong. That rapid growth, which helped AMD’s Computing and Graphics segment increase revenue 46 percent year-over-year, led the company to believe it gained market share for client CPUs over Intel over Intel, according to Su. </ AMD saw strong support in the ultra-thin, gaming, and commercial PC market segments. Selling premium PCs has doubled the company's share of CPU sales in the past two years, added the CEO. In the commercial segment, Su said, the chip manufacturer's Ryzen Pro processors grew by a “strong” double-digit quarter-over-quarter thanks to the “high-volume gains” from Fortune 500 companies in the aerospace, automotive and electronics sectors and mechanical engineering.
On the data center side, AMD set another record for EPYC server CPUs, according to Su. Sales more than doubled compared to the same period of the previous year. Combined with strong sales of semi-custom products for the new Xbox and PlayStation consoles, this resulted in a 286 percent year-over-year sales increase for AMD’s Enterprise, Embedded and Semi-Custom segments.
While the new AMD’s third generation EPYC CPUs « went into production successfully across multiple cloud and enterprise customers, » data center sales in the first quarter were weighted more heavily on the company’s second generation EPYC, which is still meeting the needs of many workloads . This is a different dynamic from first-generation EPYC customers who simply moved to the second generation, she added.
« We would expect by the third quarter that it will cross and [third generation EPYC] Milan might be higher than Rome the [second generation EPYC] Rome, » Su said. « Now, of course, these things change a little as customers walk their ramps, but that’s how we see it. » According to Su, AMD’s improved full-year revenue guidance reflects improved supply and visibility of the company’s products to customers contrary. However, she added that the company continues to struggle with supply bottlenecks, reflected in low inventory levels across the channel as the semiconductor industry struggles with major bottlenecks.
« There’s a lot more we’d like to do to improve the performance of the delivery environment, and that’s why we’re working closely with our partners across the board, » said Su.
AMD has seen momentum in its graphics products, with customer sales up double-digit year-over-year and data center GPU sales also increasing over the same period.
“We’re making great strides on our data center GPU roadmaps and expect sales to rise in the second half of the year as we ramp up our next-generation AMD Instinct GPU to support multiple HPC victories – including Frontier, the first US state of exascale supercomputers, « said Su . As part of the earnings statement, Su asked questions from several analysts about the advancement of companies, both competitors and customers, in using or developing arm-based processors that challenge AMD and Intel for performance and total cost of ownership.
Su said more gamers are expected to enter the chip room as workload optimization becomes more important. She added that the company was very confident about its future roadmap and ability to stay competitive.
« Our focus is on further optimizing the solutions across the data center and PC ecosystem [and] making sure that what we have is very competitive and meets customer requirements, » she said. </ Marc Fertik, vice president of technology solutions at Ace Computers, an Elk Grove Village-based systems manufacturer that sells Intel and AMD-based systems, told CRN that the data center and HPC segments are seeing more interest in AMD-based systems solutions mainly due to the high core count of EPYC and the industry's first support for PCIe 4.0.
Fertik added that he expects Intel’s new third-generation Xeon Scalable processors, codenamed Ice Lake, to degrade AMD’s EPYC dynamics as Intel has feature parity with its improved core count and PCIe 4.0 support AMD will get closer when the semiconductor giant’s server chips become widely available soon.
« Intel is trying to level the playing field again, so once they can prove they are available and we can configure them competitively, it will more of a horse race, « he said. « It hasn’t been a horse race in a year. I think we’ll see it make up for that, and people will be less reluctant to switch [to AMD] once Ice Lake is [available]. »
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