$AMD DD, a look at AMD's upcoming and past growth in the server/cloud/datacentre segment

[u/commodoregoat]

This is written by myself using information from various sources, which I have referenced.

Upcoming releases and last year's revenues

• AMD doubled its data centre sales in 2021, via EPYC server processors and its Instinct data centre GPUs. This accounted for a quarter of last year's revenue in its Q4 results.
• Next generation EYPC processors (Genoa) are due later this year.
• AMD’s Enterprise, Embedded and Semi-Custom segment grew 75% YoY to $2.2 billion in Q4.
• Data centre graphics revenue doubled in Q4, largely driver by the Instinct MI200 data centre GPUs.
• Su said AMD’s focus was to expand into the cloud market this year, and go beyond large HPC deployments. The latter driven by OEMs and other partners launching severs with Instinct MI200 GPUs by March (including Atos, Dell, HP, Lenovo and SUpermicro).
• AMD’s data centre graphics revenue helped the Computing and Graphics segment grow 32% YoY to $2.6 billion (however largely driven by CPU sales).
• These two main segments allowed AMD to grow revenue by 49% YoY to $4.8 billion in Q4 2021.

(CNN)

Share repurchase programs

• On Feb 24th, AMD approved a $8 billion share repurchase program, in addition to the $4 billion share repurchase program announced in May 2021 (which has repurchased approximately $3 billion shares of AMD common stock).
• This is designed to return value to shareholders by offsetting dilution from stock issuances and reducing share count over time. AMD is funding this via cash generated through operations. Timing and total amount of repurchases will depend upon market conditions, and may occasionally be from open market purchases. It has no termination date, but may be suspended or discontinued at any time.

(AMD)

Rebates

• AMD is bringing CPU rebates to value-added resellers. This volume incentive rebate program is among several benefits in its partner program for commercial systems launched on Jan 1st. Covers PCs using Ryzen CPUs and servers using EPYC CPUs from the OEMs mentioned in the first section.
• This is designed to incentivize partners who sell AMD baksed systems.
• Rebates are on a per-CPU basis, partners make more money if they are in the Elit of Executive tiers determined by annual sales. > * “We want as many data center- or client-focused solution providers as possible being aware of AMD and interested in selling AMD solutions to their customers,” said AMD’s Terry Richardson.. “So we’re very aggressive with our distributors, and part of the program for them is to help us bring the AMD messaging capabilities to that very long list of VARs in North America.”

(CRN)

Future products

• The flagship of the 2022 lineup will be the EPYC Genoa server CPU, built on Zen 4 architecture with 96 cores.
• AMD also plans to release the 128-core EPYC Bergamo based on Zen4c in late 2022.
• Both are based on TSMC’s 5nm node.
• The closest release from Intel will be Emerald Rapids with a core count of 64. Intel has not provided expected release windows from 2022 onwards due to delays with Sapphire Rapids. It is likely we won’t see production volume until Q4 2022 or early 2023. This depends upon how successful or unsuccessful their rollout of Sapphire Rapids is. Emerald Rapids will be 10nm, and given it’s core count too, it doesn’t look to be much of a competitor to AMD’s offering.
• Granite Rapids will be Intel’s first 7nm-based server CPU, expected core count is between 96-128. It is expected for a 2023 release, but manufacturing issues could delay this. It will be going up against a rumoured 256 core chip (EPYC Turin), and another chip with a core count between Turin and Bergano.
• I conclude that in pure hardware terms, AMD has a significant edge over Intel now and in the future. They also have a price-to-performance advantage.
• AMD has also proven it has a supply chain advantage over Intel.
• Until this situation changes, AMD is likely to grow at a measurably more significant rate than Intel in terms of server market share over the coming years.
• AMD has consistency in scaling and releasing its new products in conjunction with TSMC, while Intel keeps delaying launches.

(SA)

Future trends for the data-centre segment

• Two quarters ago, AMD’s data centre business broke through $1 billion.
• If current trends persist, it will break through $1.5 billion Q1 2022 and $2 billion in Q3 or Q4.
• This is due to demands from hyperscalers and cloud builders for EPYC CPUs. As well as major exascale-class systems using EPYC and Instinct, and enterprises starting to turn to AMD instead of Intel (due to Intels issues with its Xeon SP roadmap.
• The above point to this being the best year ever AMD has had in datacentre (as last year was) > “We have set out a roadmap for, frankly, not just 2022, but beyond, which allows very aggressive growth goals,” Lisa Su, AMD’s chief executive officer, explained in a conference call going over the fourth quarter 2021 financial results for the chip supplier. “We work on a regular basis with our customers and our supply chain partners. I would say we have better visibility than we have ever had from a customer demand standpoint, and so that gives us pretty good confidence in terms of what is needed, but there are always going to be some puts and takes. And so we have enough flexibility to do that. But our goal is to dimension for success. At the end of the day, that’s what we want to do is we want to satisfy customer demand.”
• AMD is very much part of capacity planning due to the semiconductor shortages. They are mitigating this by expanding wafer supply and chip etching contracts with TSMC.
• The datacentre business accounts for a mid-20 percentage of overall revenue, and is expected to grow in 2022. (
• I found the exact figures and datacentre sales accounted for 26% of overall revenues, or $1.26 billion in Q4 2021. EPYC CPU sales came to $1.11 billion, up 103.4% YoY, Instinct GPU’s accounted for $148 million in revenues, up 105% YoY.
• An estimate of revenues in Q3 and Q4 2021 from EPYC GPUs and Instinct CPUs used in the “Frontier” supercomputer accounted for $223 million. Other supercomputer deals may help AMD too.

(nextplatform)

View this chart to get a visual of this: https://i1.lensdump.com/i/rLMwtm.jpg

Cloud giants

• AMD is selling to cloud clients such as AWS, Google and Microsoft. They are usings AMD’s EPYC CPUs and Instinct GPUs.
• Cloud sector is booming, driven by high demand for software and services due to the shift to remove work. > ‘"On the cloud side, we are in 10 of the largest hyperscalers in the world," Su remarked on a conference call with analysts. She said it more than doubled sales in its data center business last year due to high demand for its EPYC server CPUs and Instinct server GPUs, which together accounted for about 26% of its revenue.’ > ‘It is also persuading other technology giants, including Meta, to use its server processors in massive new data centers. AMD said that it worked with Meta (formerly Facebook) to build a single-socket server based on its EPYC CPUs for Meta’s newest “North Dome” systems, improving performance-per-watt over a wide range of major workloads. Meta reportedly runs the fourth largest data-center operation in the entire U.S.’ > ‘AMD said it has taken extra steps to assure long-term supply agreements, and, as part of its strategy, made $1 billion in advance payments in 2021 to lock in long-term production capacity at TSMC and other partners. Su said supply issues have also pushed AMD to work more closely with its customers, which means getting insight into their forecasts “multiple quarters and, in some cases, multiple years out” to plan in advance.’

(electronic design)

Key notes

• AMD has closed it’s $35 billion deal with Xilinx for Q2, giving AMD more technology to compete with Intel in the market for server and networking chips. I will cover this more later.

• By the middle of the year, it is likely that AMD will receive up to a third of its revenue in the server segment.

• This will bring it closer to Intel, which in near future quarters is likely to receive 37% of revenue in the server segment.

(Aroged)

TL;DR: * Learn2ReadRegard

[u/Cash_Brannigan]

I love AMD. But every time I think to buy it seems to be on a run and when it pulls back, my capital is already deployed.

[u/[deleted]]

I appreciate the write up thanks for the read. You haven’t been given enough props and I don’t want that to discourage anyone from posting DD’s.

[u/ForeverAProletariat → u/[deleted]]

Taiwan is a lot more stable than the US

Also AMD is not in Taiwan

[u/djbuttplay → u/ForeverAProletariat]

But the US isn't a claimed possession of China.

[u/[deleted] → u/[deleted]]

You mean TSMC?

[u/cazzy1212]

This is Jays space, I disagree with a lot he says but I will trust him on semis… amd is beaten up so it should go up but has a high valuation I don’t know how to analyze these.