The successful series of the chip manufacturer AMD is not yet coming to an end. The literally revived company continues to benefit significantly from the new processor series. But also from the recently released updates in the graphics segment.
When AMD management opened books and presented first-quarter results. The sales totalled $ 1.79 billion. This is a huge increase of 40 per cent over the previous year. Profits of $ 162 million were also significantly higher than $ 16 million in the previous year.
However, the figures were significantly weaker than in the immediately preceding quarter at the end of 2019. Of course, this is partly due to the fact that the first quarter is always somewhat weaker – in the end, the consequences of the Christmas business. Which also affect the components. The Providers such as AMD continue to have an impact. But even if this was not explicitly mentioned in the balance sheet, the onset of the coronavirus crisis also had a certain impact.
It will be a difficult year
According to AMD boss Lisa Su, the supply chain in China was affected by the emerging problems quite early on. However, the problems are likely to continue in the second quarter. As a business in the most important sales markets is not doing very well. However, it is currently not possible to estimate in detail how severe the difficulties will be.
However, AMD management also emphasized that the bottom line was that profits were depressed due to the fact that spending on research and development increased further. The investments at this point should, of course, pay off in the future in the form of new, good products. In this respect, one is also optimistic that, despite the crisis, sales growth of 25 per cent can be achieved over the financial year. As weak demand from private users is expected in the second half of the year, in particular, this is an ambitious goal.
AMD is stronger than ever and growing fast
AMD chip maker considers himself so well positioned with the latest products and chips that are still under development that you can expect very strong growth rates over the years.
CEO Lisa Su said that according to a report by Bloomberg, a 20% increase in sales can be expected for at least the next four years. And at the same time, profitability should also grow steadily. Since development, production and marketing costs are proportionally reduced with increasing sales. AMD plans anyway that particularly profitable products will only really grow.
For the first quarter of this year, the company initially set itself a sales target of $ 1.8 billion plus-minus $ 50 million. However, at the moment, it should be assumed that the results will usually be in the lower forecast range. Since weak sales from China can be reported due to the coronavirus epidemic.
Epyc processors are already quite popular and should help AMD annual sales exceed the 2019 figure by 28-30 per cent.