What is clear from this Q2 2015 earnings is that the PC market is no longer the one that will ensure the survival, in the short to medium term, AMD. The collapse of the consumer market, the increasing success of Phablet and excellent stability of home console do nothing but confirm that AMD must use its know-how to help other companies in the production of chips or Semi Custom.
AMD Should Definitely Strengthen The Division Of Semi Custom
Although the APU for consoles PS4 and XB1 generate profits, not scary, they are still liquid constant coming into the coffers of the company, and this was possible at almost no cost: the cost of R & D of the APU, the costs of tape out and design, production costs have fallen almost entirely on the shoulders or Sony / Microsoft, or TSMC / GlobalFoundries. In fact, AMD has gained in experience.
Aggressive orders for one of these semi-custom chip revenue means having safe for five years or more. For this reason, Lisa Su, CEO of AMD, announced that a third Semi Custom chip is at the starting line, and that will generate profits of approximately 500 million dollars over five years. It is not much, in absolute terms, but would be guaranteed income. Another semi-custom chip, more advanced and probably based on Zen, is also expected for the second half of 2016.
In this second quarter, then, the division ” Enterprise, Embedded and Semi-Custom” has proved the most in form of AMD, with a turnover of 563 million dollars (-8.15% YoY), and a net 27 million dollars (-72.16%).The exponential decrease in earnings was mainly caused by the steep fall in sales of Opteron CPU and the slight decline in sales of consoles from Sony and Microsoft. AMD, however, expects that the second half of the year the situation will improve, thanks to sales of the Christmas period in the gaming industry.
As for the division Computing & Graphics we have been a bloodbath, with sales of just 379 million dollars (-54.22% YoY) and net outflow of 147 million dollars, compared to just 6 million a year ago.
In this 2Q AMD had revenues 942 million dollars (-35% YoY), and has had net losses of 137 million dollars, of which 33 million attributable to the cancellation of 20nm by GloFo.
Overall, AMD has to survive, as we have already had occasion to say several times in recent months, yet for about 12 months, so that we can finally bring to market new x86 CPU-based architecture Zen. For now the home of Sunnyvale cannot help but hope for an improvement in production capacity of GlobalFoundries and success of the new GPU Fiji. We recall, finally, that Zen has just entered the stage of tape out.