AMD’s fourth quarter earnings report Tuesday was most notable not for its positive results, though it had plenty of those, but for the company’s optimism about the chip shortage and its ongoing effects.
Intel’s most recent earnings report came with downbeat comments about the lingering chip shortage and related supply chain constraints at around the same time the U.S. Commerce Secretary Gina Raimondo also weighed in with a downer assessment.
But this week, AMD CEO and President Lisa Su sounded more optimistic about how her company has continued to manage supply without leaving customers wanting. “We've been working on the supply chain really for the last four or five quarters knowing the growth that we have from a product standpoint and the visibility that we have from customers,” she said, according to the Seeking Alpha earnings transcript. She added “...We’ve made significant investments in wafer capacity as well as substrate capacity and back-end capacity. We feel very good about our progress in the supply chain to meet the 2022 guidance. And our goal is, frankly, to have enough supply to satisfy the demand out there.”
About that guidance, AMD said it expects to record $21.5 billion in revenue for the full year of 2022, a figure which seemed to catch analysts by surprise, as it’s roughly 30% higher than consensus expectations. For the first quarter of 2022, it sees revenue hitting $5 billion. This all comes after the fourth quarter revenue posting of $4.83 billion which represented a 49% year-over-year increase and also beat analyst estimates by about $300 million. The company also reported $16.4 billion in revenue for the full year of 2021, up 68% year-over-year. Both the quarterly and full-year numbers broke records for AMD revenue.
The revenue surge was driven by higher revenue in AMD’s computing and graphics, enterprise, embedded and semi-custom segments, Su said.
Getting back to those supply chain issues, Su said the company has not seen pricing increases, which have occurred up and down the semiconductor supply chain, prove to be a tailwind on its revenue. She credited AMD’s cooperative relationships with its suppliers and customers for helping the company avoid this problem.
Su said, according to the Seeking Alpha transcript, that “the industry has seen some price increases across the supply chain. And that's as to be expected given the amount of capacity that we're all putting on to satisfy the strong demand. So we're always in this for the long-term and working with our supply chain partners as well as our customers to ensure that we find a way to kind of share the additional costs. But our focus is on ensuring that we have the supply to meet the high demand.”
Xilinx acquisition
One area in which the AMD earnings report disappointed was its very brief discussion of the company’s $35 billion acquisition of Xilinx, which recently cleared a major regulatory hurdle in China. Su said AMD still needs the U.S. Federal Trade Commission to approve a refiled Hart-Scott-Rodino Antitrust Improvements Act document before the deal can close, but that it is expected to close in the current quarter.
RELATED: AMD-Xilinx deal gets conditional approval from China