AMD expects to become a chipmaker with $40 billion in annual sales over the next three years. In 2021, AMD posted record revenue of $16.4 billion. Let it sink in.
In the company’s first financial report in two years on Thursday, AMD CEO Lisa Su explained how the company plans to reach the goal of $40 billion in revenue by 2025: largely thanks to data center chips. Company-wide, AMD is targeting a $300 billion slice of the overall chip market, and it believes $125 billion of that goal will go to chips that power servers, AI, infrastructure network and graphics.
“So what happened in the data centers? said Su. “First, we’ve seen a huge increase in demand for cloud and everything that’s happening in the data center. We have seen a tremendous increase in AI and demand for AI workloads. We have added [total market size] when we think of networking and telecommunications and other opportunities. »
Behind the message hides a seemingly undeniable reality. The world needs more computing power, and the demand for silicon will only intensify as tools like AI become commonplace. In the Santa Clara, Calif., boardroom crowded with Wall Street sales analysts seated in white leather chairs, AMD executives argued that the company would ride this computing wave.
“We are still underrepresented in the market,” Su said of the data center processor market. According to Mercury Research, in the first quarter of 2022, AMD held 11.6% of the x86 data center chip market, up from 8.9% last year.
AMD gave a big show of its upcoming data center chips, talking about the performance gains resulting from the company’s (in its own eyes) superior designs. Its partnership with TSMC is part of that success, and AMD needs to develop its latest designs with the manufacturer to ensure it can take advantage of the latest manufacturing techniques to get the most out of every piece of silicon.
Part of AMD’s data center and AI plans includes its acquisition of Xilinx for $35 billion. The addition of the programmable chip maker has generated billions of dollars in new sales and new markets in cars, wireless technology and embedded chips used by the military and healthcare. But Xilinx also brought technology that will help broaden AMD’s efforts in the data center.
AMD was once a second-class citizen next to Intel, and that seems dead. Gone are the days of the disastrous deployment of server chips in Barcelona and the tumultuous period that followed his critical decision to retire from the chipmaking business, which ultimately served him well. If the company succeeds in achieving its projections, it will have cemented Su’s decade-long effort to transform the company.