AMD Optimistic About Future Despite Tough Q2
CEO Rory Read says the chip maker will return to profitability in the third quarter as AMD pursues new growth areas.Advanced Micro Devices executives, despite a second quarter that saw revenues fall and a net loss of $74 million, are upbeat about the second half of the year. In a conference call with analyst and journalists July 18 to talk about the second-quarter financial numbers, CEO Rory Read said the company’s efforts to expand into new growth areas were taking hold, and that he expected AMD will return to profitability in the current quarter. With the company now past a painful restructuring, officials are focusing on new products and strategies that already are beginning to bear fruit, Read said. AMD in the second quarter rolled out a range of new accelerated processing units (APUs) aimed at the traditional PC market as well as emerging form factors, including ultrathins and tablets. The company’s growing semi-custom chip business grabbed significant wins in the gaming console market, including Microsoft’s upcoming Xbox One and Sony’s PlayStation 4. Last year Nintendo said it would use AMD chips in its Wii U device. In the data center, AMD is rolling out x86-based Opterons for traditional servers as well as the burgeoning dense microserver market, where the chip maker also can leverage its SeaMicro technology. In addition, starting in 2014, AMD also will make chips based on designs from ARM, giving OEMs a range of choices.
For AMD, these new growth markets—from dense servers and ultra low-power clients to professional graphics and embedded systems—will account for 40 to 50 percent of the company’s revenue in the next two to three years, according to Read. That will lessen AMD’s reliance on the traditional PC market, which continues to see sales fall worldwide as customers spend more of their money on tablets and smartphones.