AMD's Ryzen processors once again contributed greatly to success in 2021
AMD's Q4 2021 financials have been published, summing up their numerous successes in the final quarter of the year and year as a whole. For anyone invested in the company - either literally for merely as an independent interested party - they make for a satisfying read, particularly as another chapter in the story of their ongoing rejuvenation in the context of the worldwide pandemic.
The headline figure is without doubt the most eye-opening. In the fourth quarter of 2021 AMD's revenue was $4.86bn, up a staggering 49% year on year and reflecting exceptionally strong demand in Computing and Graphics and Enterprise, Embedded and Semi-Custom segments. Perhaps more significantly, gross margin was up 5% to 50% compared with 45% in Q4 2020, indicating that AMD's solutions command a greater premium than previously and that the mix of products sold is more preferential to their bottom line.
Net income of $974m in Q4 2021 was down almost 50% compared with Q4 2020, but that is at least in part due to a tax benefit valued at £1.3bn in the earlier report. By the same token, business expenses also increased in 2021 compared to the same period a year prior.
Q4 2021 Highlights:
Computing and Graphics segment revenue was $2.6 billion, up 32% year-over-year and up 8% quarter-over-quarter.
- Client processor average selling price (ASP) increased year-over-year and quarter-over-quarter due to a richer mix of Ryzen processor sales.
- GPU ASP increased year-over-year primarily driven by Radeon product sales and decreased quarter-over-quarter due to product mix.
Enterprise, Embedded and Semi-Custom segment revenue was $2.2 billion, up 75 percent year-over-year and 17 percent quarter-over-quarter driven by higher EPYC and semi-custom processor sales.
All Other operating loss was $121 million as compared to operating losses of $93 million a year ago and $107 million in the prior quarter.
- Client processor average selling price (ASP) increased year-over-year and quarter-over-quarter due to a richer mix of Ryzen processor sales.
- GPU ASP increased year-over-year primarily driven by Radeon product sales and decreased quarter-over-quarter due to product mix.
Enterprise, Embedded and Semi-Custom segment revenue was $2.2 billion, up 75 percent year-over-year and 17 percent quarter-over-quarter driven by higher EPYC and semi-custom processor sales.
All Other operating loss was $121 million as compared to operating losses of $93 million a year ago and $107 million in the prior quarter.
The year as a whole was another bumper one for AMD, who generated over $16bn in revenue from slightly under $10bn a year ago. Operating income reached $3.6bn from $1.4bn a year prior, driven by a 'richer' mix of Ryzen, Radeon and EPYC processor orders in addition to demand for semi-custom designs (such as the new console processors). Far from being kneecapped by the global pandemic, shortages in supply and increases in demand for an broadly competitively portfolio have benefited the red team greatly.
AMD expect growth to continue in 2022 with revenues exceeding $5bn in Q1 2022 and $21.5bn over the course of the year. With Chinese authorities giving their blessing to the purchase of FGPA chip manufacturer Xilinx it's expected that the acquisition can now be complete in this quarter. Other products announced at CES 2022, including new Radeon graphics solutions for consumer and enterprise markets, are also likely to pad out earnings.
Direct threats to AMD's aspirations remain Intel and Nvidia, particularly the impact the former's new Alder Lake CPUs and Arc GPUs will have on AMD's market CPU and GPU share.
Full financials can be found on the AMD Investor Relations page.
