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AMD Posts Solid Q3 Thanks To Strong Mobile Demand

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News Posted: Fri, Oct 28 2011 1:20 PM
AMD's warning earlier this quarter was taken by many as a sign that the company's performance might slump significantly, which makes yesterday's results a pleasant surprise. The company's Q3 revenue was up seven percent, slightly above adjusted expectations. Mobile products continue to be the primary factors behind increased revenue, with mobile processor revenue up 35 percent quarter-on-quarter and 20 percent year-on-year.

The company's new CEO, Rory P. Read, noted that "Over 90% of our mobile units were Fusion APUs... we believe AMD's worldwide share of the $200 to $600 retail price bid is now over 28%. These bands make up 45% of the retail notebook volume across the planet, and we believe AMD gained consumer notebook share in the key emerging markets year-over-year, particularly in China, where our microprocessor revenue grew 23% quarter-on-quarter.

We also set another record for Brazos shipment in the quarter, up 36% quarter-to-quarter, and our mobile AMD processor unit sales in total are now up over 50% in the last 2 quarters alone."

Note: Read's rapid-fire percentages obscure more modest estimates. If his numbers are accurate, it means AMD has a 12.6 percent share of the total mobile market. That's still solid growth, but it doesn't sound nearly as impressive as the way he said it. 

Server revenue, according to Read, is up 27 percent sequentially based on new orders from supercomputer partners, HP, and Dell. We're leery of making too much of Bulldozer's server uptick. After the chip's weak desktop debut, servers could prove to be a better fit—but that's far from certain. Large caches alone don't make for a great server processor, and many of the voices protesting that BD is actually a server part and not meant for desktops appear to have forgotten that the original Athlon 64 was, first and foremost, a server processor.



Current estimates peg AMD's server market share at ~5.5 percent, down from a high of nearly 30 percent at the end of 2007. Given how small the company's share of the server market is, a 27 percent revenue increase doesn't translate to a whole lot of hard cash, even allowing for the higher margins on server products.

GPU sales revenue was up 10 percent quarter-on-quarter and four percent year-on-year. AMD doesn't include APU sales in GPU revenue, so growth in this segment is being driven despite simultaneous growth in APU sales and their replacement of low-end integrated GPUs. GPU operating income was $12 million, compared to $149 million for the Computing Solutions division.

32nm supply currently isn't where AMD would like it to be, and the company indicates it's trading off on 45nm supply as a result due to common equipment being used for both lines. The company expects its current gross margin of about 45 percent to hold steady in Q4, but said almost nothing about its desktop business other than to note decreased revenue in Q3. The company CEO didn't even mention the Bulldozer launch in his prepared statement.

The company COO, Thomas Seifert, confirmed that Trinity is on tap for an early launch next year but said little else regarding what improvements AMD will deliver with the second-generation Bulldozer core. More 32nm Llano parts are expected to become available as GlobalFoundries resolves its yield and capacity issues.
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omegadraco replied on Fri, Oct 28 2011 10:16 PM

Very nice. I am glad that they did well in Q3... Hopefully they also do well for Q4 even with the slightly disappointing BullDozer release.

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Rory Read is known for growth so I think AMD will benefit from him as CEO. Some say his speech is not the best but he sure knows how to grow a company.

Lenovo was at the top of the PC growth when he left.

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AKwyn replied on Sat, Oct 29 2011 12:29 AM

ThunderBird:

Rory Read is known for growth so I think AMD will benefit from him as CEO. Some say his speech is not the best but he sure knows how to grow a company.

Lenovo was at the top of the PC growth when he left.

That post says everything that I wanted to say... He'll do good under AMD, maybe grow a little bit with an improved Bulldozer and the release of the Radeon HD 7 series.

 

"The future starts with you; now start posting more!"

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pwrntspd replied on Sun, Oct 30 2011 4:29 PM

While this is great news, i think AMD still has a long road ahead of it. Its good that AMD has found a market that it competes well in, its APU's are great processors, i would just like to see a more solid lineup across the board. Either way, change is coming to AMD and hopefully Both of you are correct and Mr. Read can help grow AMD.

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We'll see how well 'Bulldozer' did at Q4's end. Even if the 'enthusiast' community largely panned it, they may still move a lot of chips if the marketing is done right.

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