AMD plans to introduce processors next year that incorporate an artificial intelligence engine from the company’s recently acquired Xilinx FPGA business unit, which helped the chip designer generate strong sales growth in the first quarter. , as well as the company’s traditional PC and server businesses.
CEO Lisa Su unveiled plans for new AI-powered processors at her company’s conference. first quarter results call on Tuesday, where she said the resulting microprocessors “will enable cutting-edge inference capabilities” as part of broader plans to capitalize on AMD’s $49 billion Xilinx acquisition.
AI engines are already being used in Xilinx’s FPGA-based products for embedded and edge applications, including image recognition for cars, according to Victor Peng, former CEO of Xilinx who now leads the AI group. adaptive and embedded computing from AMD.
Peng said AMD is working on developing “unified” software that will help developers take advantage of new AI capabilities for inference and training in data centers and at the edge.
Overall, Su said, Xilinx will allow AMD to have a “much broader set of offerings” in the AI hardware space that goes beyond the company’s current capabilities with CPUs and the GPUs.
“We now have the industry’s best portfolio of high-performance, adaptive computing engines, and we see multiple opportunities to leverage our expanded technology portfolio to deliver even better products,” she said.
Su said the addition of Xilinx’s FPGA-based product portfolio will also allow the company to sell more chips and generate higher sales with AMD’s larger customers who have diverse computing needs.
As part of AMD’s growing software efforts, Su said the company is exploring the possibility of charging money for new types of software in the future. Rivals Intel and Nvidia are already making money from software, and they both have expressed big ambitions in this area.
“You should see us investing a lot more in software,” Su said. “And then, in terms of monetization and such, I think we can talk more about that by thinking about the overall solution space that we’ll be offering across all of these compute engines.”
Su and Peng teased that AMD would share more details about its long-term plans for Xilinx, its pending acquisition. network chip vendor Pensandoand software, at an event for financial analysts on June 9.
Investors see early promise in an AMD-Xilinx combo
AMD’s latest quarter marked the first period in which the US giant recorded revenue from Xilinx, which became part of the company in mid-February. On the face of it, investors were impressed and sent AMD’s stock price up more than 6% in after-hours trading on Tuesday.
On the call, Su boasted that the chip designer’s expanding portfolio gives AMD “many levers for growth” amid a “significantly larger” total addressable market. She added that Xilinx specifically offers the company “multiple sources of long-term, high-margin revenue.”
The company’s first-quarter revenue rose 71% year-over-year to $5.9 billion, and it expects sales to increase to around $6.5 billion in the second quarter, which would mark an increase of approximately 69% compared to the same period last year.
This sales trajectory prompted AMD to raise its full-year revenue forecast to $26.3 billion in 2022. This nearly doubled the company’s previous forecast for annual sales growth to 60%. .
Absent standard accounting practices, AMD’s gross margin was 53% in the first quarter, and the company expects it to reach around 54% in the second quarter. The company expects that margin to remain at that level through the end of the year, up from the roughly 51% it had previously anticipated.
Su said AMD has raised its revenue forecast in anticipation of continued strong demand for Xilinx products as well as the company’s chips for servers and game consoles. She added that improved sourcing capacity with third-party foundries, primarily TSMC, also contributed to the situation.
“We’ve invested heavily over 18 months to secure supply and capacity, and we’re seeing it come online,” she said.
Breakdown by business sector
While Intel reported a dip In its PC business last week, AMD saw the opposite, posting a 33% year-over-year increase to $2.8 billion in first-quarter revenue for its computing and graphics segment. Sales of its Ryzen processors and Radeon GPUs grew by double digits during this period, which Su said helped AMD increase processor revenue share for an eighth straight quarter.
Su said AMD was able to continue growing in the PC microprocessor market due to its focus on high-end, gaming and commercial segments. This was reflected in the company’s average transformer selling price being higher sequentially and year over year.
AMD’s Enterprise, Embedded, and Semi-Custom segment saw much higher growth, with first-quarter revenue up 88% year-over-year to $2.5 billion . This is due to its Epyc server processor and automotive chip businesses more than doubling, as well as “significant” double-digit percentage growth for AMD’s custom chips for game consoles.
Regarding the company’s server GPU efforts, Su said sales were steady as AMD launched its new Instinct MI210 accelerators, which are currently registered in the computing and graphics segment.
With AMD’s server processors and GPUs combined, they made up somewhere in the low 20% range of the chipmaker’s total first-quarter revenue, according to Su.
As for Xilinx, AMD generated $559 million from the business, which was only part of the business for about the last six weeks of the first quarter. Looking at Xilinx’s revenue for the entire quarter, the company generated over $1 billion in revenue, up 22% year over year.
If you’ve ever thought AMD could be a little more transparent about the revenue it generates from its server chips, we have good news.
Starting in the second quarter, AMD will begin reporting revenue across four segments: data center, gaming, client, and embedded. Su said the company will share more details about the opportunities AMD sees in each segment at the next analyst event.
“We are incredibly excited about the data center opportunity,” Su said. ®