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After strong demand for processors used in servers, as well as the contribution of Xilinx’s acquisition of the programmable port manufacturer (FPGA), AMD predicts that its target annual revenue will grow by 60% in 2022.
“Based on AMD’s higher organic growth, as well as the addition of Xilinx with strong demand in multiple end markets, we now expect annual revenue to grow by approximately 60% year-on-year, compared to approximately 31% growth we led at the beginning of this year, “said AMD CEO Lisa Su this week in a conference call with analysts.
The upward outlook makes AMD excellent in the semiconductor industry, where growth is constrained by supply chain problems, the Covid pandemic and war in Ukraine. Intel, AMD’s biggest competitor, forecasts annual sales of $ 76 billion, a 2% increase over 2021.
AMD has made strong profits from Intel’s market share in the computer and server processors, while expanding into new markets such as graphics processors, where Intel is just beginning to offer its own products.
AMD has more than doubled its server server revenue annually in 8 of the last 10 quarters, highlighting the company’s growing demand for Epyc processors with cloud, enterprise and high-performance computing (HPC) customers. Revenue from the cloud has more than doubled annually as hyperscalers such as Alibaba, Amazon, Baidu Cloud, Microsoft Azure and Google have expanded their infrastructure deployments.
AMD completed the acquisition of Xilinx in the first quarter of 2022 and announced plans to acquire Pensando. As a leading provider in the FPGA and adaptive computing solutions industry, Xilinx is “significantly expanding our technology and product portfolio,” Su said.
With Pensando, AMD expects to expand its data center product mix. Pensando will add a data processing module (DPU) and software stack deployed with key customers, including IBM, HPE, Microsoft, Oracle and Goldman Sachs.
In the processor business, AMD acknowledges that demand is showing signs of weakness.
“Although the PC market is experiencing some softness coming from several quarters of near-record unit deliveries, our focus remains on premium, gaming and retail parts of the market, where we see strong growth opportunities and expect to continue to gain total customer share. of revenue, “Su said.
AMD’s success depends on its main chip supplier, the Taiwan Semiconductor Manufacturing Company (TSMC). With TSMC, AMD released its first Epyc processors with 3D-arranged chips in the first quarter of this year. The technology extends AMD’s leadership in performance in technical computing loads by up to 66% compared to the previous generation, according to the company.
AMD customers, including Cisco, Dell, HPE, Lenovo and Supermicro, have launched servers with the new processors. Interest in the next generation of Genoa server processors is strong as AMD expands the chip sample. AMD said it plans to launch Genoa in the second half of 2022 and expects to continue to gain stakes based on expanded customer acceptance in the cloud, enterprise and HPC.
The company is integrating Xilinx’s differentiated artificial intelligence mechanism into its processor product range to enable inference, with the first products expected in 2023.
Concerns about capacity
Some analysts have questioned whether the company can sustain strong growth, given the limitations of the supply chain. TSMC was unable to meet the demand of all its foundry customers.
“We continue to receive very good support from our suppliers,” Su said. “This is one of the reasons we can increase our direction. 16-nm and higher plate delivery is still somewhat limited. We are working with AMD on a larger scale to try to secure more supplies, as well as to continue to increase our overall capacity to keep it very strong over the next few quarters.
With Su at the helm AMD has become reverse history. The strategy is to have the best computers and combine them into products for specific end markets, according to Su.
“Our CPUs, GPUs, FPGAs, adaptive SoCs and then DPUs that we add from Pensando just give us a huge range of options,” she said.
However, analysts doubted whether the business would lose strength.
“There have been some comments from some of the big cloud customers about moderating or delaying investments,” said Timothy Arcuri, an analyst at UBS. “There is some debate about whether this means there will be some delay in buying servers.”
“Our planning extends beyond 2022 to 2023,” Su said. “From what we can see, this is a steady demand.”