AMD makes record profit in the first quarter of 2021

A return with competitive products and Intel’s manufacturing difficulties remains a perfect storm in AMD’s favor. For the full year 2020, AMD tripled its profit compared to 2019 and there is currently nothing to indicate that the upward trend in the short or long term will reverse. AMD is now reporting records for the first quarter of the year.

AMD’s quarterly report Q1 2021

* Approximately 1,300 million a lump sum that was added for tax technical reasons

Common for companies operating on the consumer side is a first quarter that performs significantly lower than the fourth and third, as companies generate high revenues during the Christmas trade. This defies AMD with a first quarter that is close to the fourth. On an annual basis, the company’s revenues almost doubled by 93 percent and the net profit takes a real step up by 242 percent, to USD 555 million.

The segment Computing and Graphics, which includes processors and graphics cards, remains the largest at AMD. That portion pulled in $ 2,100 million with an operating profit of $ 485 million, up from 1,438 million and 262 million, respectively, on an annual basis. It is also possible to compare with the fourth quarter’s 1,960 million on the revenue side and an operating profit of 420 million.

AMD does not break down which products on the consumer side are making the strongest progress, but by all accounts they all perform well. What is mentioned above all is that the average sales price (ASP) for the company’s Ryzen processors in both desktops and laptops is rising, which means that more and more products are sold in the higher price ranges. This is in contrast to Intel, which is talking about a declining ASP on the processor side.

The fact that there is a shortage of circuits has not escaped anyone and among enthusiasts it mainly affects graphics cards, which are practically impossible to get hold of. Also in this segment, AMD is talking about a continued increase in ASP, probably largely due to the Radeon RX 6000 series. Lisa Su also makes a quick point that supply will improve during the second quarter of the year, but with the high demand in mind and the graphics cards disappearing from the virtual store shelves in seconds, it probably does not significantly affect the situation.

For Enterprise, Embedded and Semi-Custom, which includes the Epyc server processors and system circuits for the gaming consoles from Sony and Microsoft, AMD is achieving great success. Here, the company generated revenues of SEK 1,345 million and operating profit of SEK 277 million, compared with SEK 348 million and a loss of SEK 26 million in the first quarter of 2020. During the fourth quarter, the corresponding figures were SEK 1,284 million and SEK 243 million.

On the server side, sales of Epyc processors have more than doubled on an annual basis, and compared to the previous quarter, AMD is talking about a “double-digit” increase (in percent). A large part can also be attributed to the launches of Playstation 5, Xbox Series X / S from Sony and Microsoft, respectively, whose system circuits are designed by AMD, which is also a supplier of said solutions.

For the second quarter, AMD forecasts revenue of 3.6 billion, plus-minus 100 million, and an increase of 86 percent compared to the second quarter of 2020. AMD also expects a gross margin of about 47 percent, which would take AMD closer to its long-term 50- percentage target.

Quarterly reports from AMD in 2020: