AMD reported its best-ever quarterly revenue at $5.9 billion in Q1 2022, a 71% YoY increase driven by the cloud computing, automotive, gaming and data center segments. This revenue includes six weeks of performance of Xilinx, whose acquisition was successfully completed by the company during the quarter. Xilinx is an FPGA and networking compute solution provider. Excluding Xilinx, AMD’s Q1 2022 revenue was $5.3 billion, a 54.7% YoY increase. We give below some of the key takeaways from AMD’s Q1 2022 earnings statement:
- The gross margin was at 48%, up 190 bps YoY.
- Revenue for the Computing and Graphics segment was $2.8 billion, up 33% YoY.
- Revenue for the Enterprise, Embedded and Semi-custom segment was $2.5 billion, up 88% YoY.
- The company intends to acquire Pensando, a distributed services platform provider.
- Wafer shortage for 16nm and below will remain constrained till H2 2022.
Client Compute revenues
The company launched seven new CPUs for desktop processors and first desktop processors with 3D chiplet architecture. In the notebook segment, the company extended the mobile processors to cater to customers across the spectrum, including gaming and creators, with features like better battery life and compute synergies.
Desktop GPUs grew significantly owing to mobile GPU launches, but data center GPUs, including the new launch of Instinct MI210 accelerators, remained flat.
- The revenues across the client compute PC market will see a correction in the next quarter, driven by inflationary pressures and dampened demand.
- The company will focus more on premium, high-margin segments as the PC market softens in the next quarter.
- GPU demand will also remain muted due to lowered prices and improved supply in the market. Weakening crypto markets will also contribute to the growth pace of the product portfolio.
Enterprise, Embedded and Semi-custom segment
Gaming console, automotive and data center units were the growth drivers for this segment, including a new launch by Valve in the gaming console space. The company also launched its first processors for the cloud and HPC markets, featuring 3D-stacked chiplets architecture.
- The Data Center Compute segment will continue to drive growth as hyperscalars continue to expand cloud infrastructure and enterprises upgrade their IT infrastructure.
- In networking and communication, due to enhanced synergies with the Xilinx portfolio, the company’s FPGA-as-a-Service and Smart NICs will help in penetration and diversification of the market to mainly telecom and fintech players.
- The company will focus more on AI workload-based GPUs and expanding its software stack.