Chip Maker AMD Raises Sales Outlook as Intel Battle Heats Up
July 28 2020 - 5:18PM
Dow Jones News
By Asa Fitch
Chip maker Advanced Micro Devices Inc. reported higher
second-quarter earnings and lifted its full-year sales forecast,
driven by growing demand for a new generation of high-performing
processors that are helping the company take market share from
rival Intel Corp.
Santa Clara, Calif.-based AMD on Tuesday posted a $157 million
profit for the quarter, up from $35 million a year earlier. It
generated $1.93 billion in revenue, the company said, up 26% from a
year earlier and above what AMD had projected in April. Sales also
topped Wall Street's forecast.
Like many of its chip-industry peers, AMD's business has held up
relatively well during the coronavirus pandemic amid strong demand
for computers and internet services, with millions of people
working from home.
Despite some lingering uncertainty, the company raised its
full-year revenue-growth outlook to 32%. Chief Executive Lisa Su
said the company was entering its "next phase of growth." The
company had previously forecast sales would rise 20% to 30% this
year.
AMD's latest central processing units, or CPUs, have enjoyed
strong demand, with their performance equaling or beating that of
rival offerings from Intel -- by far the market leader -- in widely
tracked benchmarks.
AMD also has benefited from recent engineering struggles at
Intel, which on Monday announced a shakeup of its development team.
Days earlier, Intel said its development of cutting-edge
7-nanometer chip technology was delayed by a year from its initial
schedule, sending its shares plummeting and AMD's climbing.
AMD's shares rose more than 8% in after-hours trading, after
rising 14% since Intel's announcement.
Unlike Intel, AMD doesn't have its own factories. Instead, it
outsources manufacturing to companies such as GlobalFoundries and
Taiwan Semiconductor Manufacturing Co., the world's largest and
most advanced contract chip maker.
AMD's market share in personal-computer central processing units
was 17.5% in the first quarter, according to Mercury Research, more
than doubling in about five years. The company has also made
inroads, albeit smaller ones, in the market for CPUs that go into
the servers used in big data centers powering most internet
services.
Write to Asa Fitch at asa.fitch@wsj.com
(END) Dow Jones Newswires
July 28, 2020 17:03 ET (21:03 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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