AMD reported its data center chip revenues more than doubled in the first quarter on total revenues of $3.45 billion, an improvement of 93% year-over-year.
AMD CEO Lisa Su said the improvement was driven by the “best product portfolio in our history, strong execution and robust market demand.”
The revenue total exceeded analyst expectations as did the 44 cent per share earnings. Net income was $555 million, an improvement over $162 million a year ago. "Demand has been higher than our expectations, industry-wide," Su said. She said there's not a single portion of the supply chain that is particularly weak, but she said AMD continues to ensure there are multiple sources of supplies for backend production needs. Industrywide there has been underinvestment in chip substrate and AMD has invested in substrate supplies that are dedicated to AMD, she added. It has also helped AMD to stay close to major fab TSMC.
"It is a complex supply chain environment," Su said. "All markets are so hot, but I'm happy to be able to say we've made progress. We're not done and there's plenty more we'd like to do."
The data center improvement was part of AMD’s enterprise, embedded and semi-custom segment revenue of $1.35 billion, an improvement of 286% year-over-year. EPYC processors used for data centers and custom products drove the increase. Income from the unit was $277 million, up from a loss a year ago.
While AMD doesn't report EPYC processor sales, Su said in a call with analysts that data center sales more than doubled year-to-year, reaching a "high teens percentage" of total revenues.
"I am very pleased with progress in the data center business," Su said. She said each new EPYC generation has ramped faster than its predecessor. "2021 marks an inflection point for EPYC."
Cloud adoption of EPYC has been particularly strong, she said, with instances of cloud expected to double this year to 400 cloud instances. Microsoft Azure, Oracle Cloud, Tencent Cloud, Amazon Web Services and Google Cloud have announced new and upcoming cloud instances. Meanwhile, Cisco, Dell, HPE , Lenovo and Supermicro have launched new server platforms on EPYC.
AMD’s success in the data center stands in stark contrast to a 20% reduction in that segment reported last week by Intel for the first quarter.
Su said the AMD purchase of Xilinx is expected to close by the end of the year.
AMD’s share price climbed 4% in after hours trading to $88.63 at 5:34 p.m. EDT.
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