Advanced Micro Devices, Inc. (NASDAQ:AMD) Q3 2020 Earnings Conference Call - Final Transcript

Oct 27, 2020 • 05:00 pm ET


Advanced Micro Devices, Inc. (NASDAQ:AMD) Q3 2020 Earnings Conference Call - Final Transcript


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Dr. Lisa Su

commercial, the number of AMD-based business notebooks for major OEMs has doubled year-over-year and we are building significant momentum based on the superior performance and battery life of our Ryzen Pro processors. Our progress in the third quarter was highlighted by winning multiple large-scale deployments with Fortune 1,000, automotive, banking and pharmaceutical companies.

Earlier this month, we announced our upcoming Ryzen desktop processors would be the first to feature our newest Zen 3 core. I'm incredibly proud of what our CPU team has achieved with Zen 3. We have significantly enhanced nearly every aspect of the core to deliver a 19% increase in Instructions Per Clock compared to Zen 2. As a result, our Ryzen 5000 desktop processors deliver absolute performance leadership across gaming, productivity and creative workloads and are positioned to drive the biggest shift in the PC landscape since we launched the original Ryzen processor in 2017.

In Graphics, revenue declined year-over-year, and increased sequentially as we prepare to launch our next generation Radeon GPUs this quarter. Mobile GPU sales grew by a double-digit percentage year over year, led by solid demand for our Radeon Pro 5000 M series powering Apple's MacBook Pro. We are very excited about our RDNA 2 graphics architecture launching later this week that delivers significant generational increases in both performance and performance per watt. Our next generation Radeon RX 6000 graphics cards powered by RDNA 2 are by far the most powerful gaming GPUs we have ever built and will return AMD to the high end of the graphics market.

Data center GPU revenue increased sequentially and year-over-year based on new cloud-based visual computing wins. Our Radeon Instinct accelerators continue gaining momentum in the HPC market. Recently announced wins include Australia's most powerful supercomputer, as well as the new LUMI supercomputer in Finland that is expected to deliver over 550 petaflops of peak performance.

Turning to our Enterprise, Embedded and Semi-Custom segment, revenue of $1.13 billion increased 116% year-over-year, driven by strong growth in both Semi-Custom and Server processor sales. In Semi-Custom, we ramped production and shipments of our next generation game console SoCs to support the November launches of the PlayStation 5 and Xbox Series X and Series S consoles. We now expect Semi-Custom shipments and revenue to increase sequentially in the fourth quarter based on strong demand.

Turning to Server, we set a record for quarterly Server processor revenue as sales grew a double-digit percentage sequentially and more than doubled year-over-year, driven by growing cloud and enterprise adoption. In cloud, the largest hyperscale customers expanded their second-gen EPYC processor deployments across both their internal infrastructures and publicly-available instances.

In the third quarter, Microsoft Azure expanded their AMD offerings to 18 regions and nine availability zones and launched new data analytic services powered by second-gen EPYC processors that deliver 30% better performance than competitive offerings. Amazon rolled out multiple new high-performance AMD instances and Google announced general availability of their cloud confidential virtual machines powered exclusively by second-gen EPYC processors.

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