“We continue to partner closely with TSMC to ensure that we can satisfy our customer demand”
Chipmaker AMD raised its full-year guidance late Tuesday as the company’s remarkable resurgence continued under the leadership of CEO Dr Lisa Su. AMD now expects 2020 revenue to grow by approximately 32% rather than 25%, compared to 2019 — a rise of some $440 million compared to previous analyst expectations.
Net income meanwhile more than quadrupled year-on-year for the quarter, hitting $157 million compared to $35 million a year ago. The numbers are modest compared to primary CPU rival Intel, but they come as Intel has stumbled in its pursuit of chips based on its own 7nm processes. AMD — which is fabless and reliant on Taiwan’s TSMC for production — is pulling ahead in terms of performance with its 7nm line.
AMD’s performance has seen a 60% year-over-year increase in the number of CIOs that are thinking about using AMD’s EPYC chips in their on-premises data centres as a result. That’s according to a June survey by JP Morgan.
The company sees opportunities for enterprise server growth, but AMD (which saw record notebook wins) is focussing on clinching “the top cloud customers first” on the data centre side, as CEO Su put it on an earnings call.
She added: “We are pleased with the momentum in our Server business and expect to continue gaining share as additional second-gen EPYC platforms and cloud deployments ramp to volume in the second half of the year… we’ll continue to build out that infrastructure in both cloud as well as enterprise.”
AMD Outlook 2020: What About Capacity?
One lingering concern for customers has been capacity. AMD competes with others for time and space on TSMC’s node. Su told analysts on an earnings call that 7nm production capacity was tight:” I’ve said before and I’ll say again, 7-nanometer is tight, and we continue to partner closely with TSMC to ensure that we can satisfy our customer demand. When you ask about the full-year raise, the full-year raise is because demand has gone up from our initial expectations, and some of that is due to the market, and some of that is due to the strength of our product traction.”
She added: “We are increasing capacity to meet those needs, but it is tight. And I would say that as we continue to increase capacity, we see opportunity there.”
Among the company’s cloud and OEM successes in Q2:
- Google announced new Confidential Virtual Machines for Google Compute Engine powered exclusively by AMD EPYC processors.
- AWS added its sixth AMD EPYC processor-powered cloud instance family, the new Amazon EC2 C5a instances .
- Oracle and AMD announced that AMD EPYC processors are powering the new Oracle Cloud Infrastructure Compute E3 platform.
- Dell Technologies, HPE, IBM Cloud, Nutanix, Supermicro, VMware and others announced new offerings powered by the new AMD EPYC 7Fx2, with Dell also announcing its first hyperconverged infrastructure system, the VxRail E Series, based on AMD EPYC processors.
CFO Devindar Kumar added: “While there continues to be global economic uncertainty due to COVID-19, we have significant opportunities ahead of us with strong product demand across multiple markets. We are in a good position to accelerate our financial momentum, expand gross margins and generate significant cash.”
The earnings call comes days after Intel’s CEO Bob Swan embarked on a major organisational shake-up in the wake of news its own 7nm efforts were being delayed. The move saw hardware chief Murthy Renduchintala leave the company.
Intel has now embarked on an “accelerated global search to identify a permanent world-class leader” for its design engineering segment.”
Despite the colossal gulf between AMD and Intel in revenues (Intel’s Q2 revenues were $19.7 billion, versus AMD’s $1.93 billion), AMD’s share price has now outstripped Intel’s as investors eye potential for it to seize more revenue share.
See also: If Moore’s Law’s Dead, What Now for Silicon Valley? The CEOs of Arm, Micron, Xilinx Have their Say