AMD Reports Monstrous Q1 2021, With Revenue Up 93 Percent Year on Year

Q1 is typically the weakest quarter for semiconductor companies such as Intel, AMD, and Nvidia, but somebody forgot to tell AMD that this year. The company reported revenue of $3.45 billion for Q1, up 6 percent compared with Q4 2020 and a massive 93 percent compared with Q1 of last year. Operating income grew to $662 million compared with $177 million in Q1 2020 and $570 million in Q4 2020. Quarterly net income rose from $480 million in Q4 2020 to $555 million in Q1 2021 once the impact of a $1.3B income tax benefit on Q4 2020 results is excluded.

Interestingly, Intel and AMD grew their respective share of the PC market by nearly the same amount of revenue. Intel reported Q1 2021 PC group sales of $10.6 billion, up from $9.8 billion in Q1 2020, an increase of $800 million. AMD reported Q1 2021 Compute and Graphics revenue of $2.1 billion, up from $1.438B in Q1 2020, an increase of $662 million. This works out to a 1.46x growth rate for AMD versus 1.08x for Intel, but the two companies split the absolute revenue growth 45/55 in favor of Intel.

AMD’s Enterprise, Embedded, and Semicustom (EESC) unit includes Epyc as well as both consoles. Revenue increased 286 percent year-on-year and 5 percent quarter-on-quarter, but according to AMD, “the quarter-over-quarter increase was driven by higher EPYC processor sales partially offset by lower semi-custom product sales.”

This implies that Microsoft and Sony have reduced their orders for next-generation consoles at least somewhat in line with traditional seasonal expectations. That’s only surprising because news reports have indicated both companies continue to sell every console they can manufacture, with little indication of slumping demand. Microsoft’s Xbox division reported $3.6B in revenue this past quarter, up 50 percent year on year, with game hardware spending specifically up 232 percent. We don’t have figures for Sony yet, but all reports indicate the PlayStation 5 has been outselling the Microsoft Series S|X.

AMD’s huge yearly revenue and profit growth have been driven largely by the Xbox Series S|X and PlayStation 5, but we know that Epyc revenue is steadily growing. A year ago, the company reported $348 million in EESC revenue and attributed virtually all of it to Epyc. Implied growth of that business from Q4 2020 to Q1 2021 is no less than $61 million, and AMD implied its server business was worth as much as $565M in Q2 2020 (a then-record). It seems likely that Epyc now earns AMD somewhere between $500 million and $600 million per quarter, leaving Xbox, PS5, Radeon, and AMD’s other embedded businesses to account for between $750 million and $850 million worth of revenue.

Just for fun, I took a look at how AMD was doing six months after the launch of the Xbox One and PS4. Total quarterly revenue was $1.4B, on $663 million worth of CPU sales and $734 million worth of GPUs and console SoCs. AMD’s Q1 revenue is 2.46x higher in Q1 2021 than it was in Q1 2014. AMD is guiding towards $3.6 billion in sales for Q2 2021, up 86 percent over Q2 2020 and 4 percent quarter-on-quarter.

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