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Another record quarter: AMD scratches its billion dollar profit for the first time

Cloud data centers in particular gave AMD a strong third quarter of 2021: The company had sales of 4.31 billion US dollars in the three months – an increase of 54 percent compared to the previous year and a growth of 12 percent compared to the previous quarter. AMD achieved the fifth record quarter in a row and scratched for the first time in the company’s history at a billion dollar profit – at 923 million US dollars this was finally.

The “Enterprise, Embedded and Semi-Custom” division did particularly well: Sales rose 69 percent to 1.9 billion US dollars. According to AMD boss Lisa Su the production of the third Epyc processor generation (7003, Milan) increased “significantly” and led to a doubling of sales to data centers within one year.

The Computing and Graphics business grew 44 percent year over year to $ 2.4 billion. These include AMD Ryzen and Athlon processors for desktop PCs and notebooks, Radeon graphics cards, but also Instinct GPU accelerators for data centers and servers. According to the manufacturer, all categories increased.

If you add up all the products for data centers and servers, i.e. Epyc CPUs and Instinct GPUs, these account for around a quarter of the company’s turnover – and the trend is rising. Said Su, “We continue to believe that data centers are the most strategic part of our business.”

AMD’s sales trend with five record quarters in a row.

(Image: AMD)

AMD also invests the increasing sales in its own research and development (R&D). R&D spending was higher than ever at $ 765 million in the third quarter of 2021. In the previous quarter it was 659 million US dollars, in 2020 around 500 million per quarter and in 2019 around 400 million per quarter.

In the fourth quarter of 2021, AMD expects another record turnover of 4.4 billion to 4.6 billion US dollars. The company has once again revised its annual forecast upwards: Instead of 60 percent, annual sales should grow by 65 percent. That would correspond to around 16 billion US dollars. In particular, the server and semi-custom products should continue to grow. Although the most important semi-custom processors for the Microsoft Xbox Series X / S and Sony’s Playstation 5 have a comparatively low margin, AMD expects the gross margin to increase from 48 to 49.5 percent.

After the business figures were announced, the AMD share fell by just under 1 percent, but remains at a high level at well over 100 euros.


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