AMD benefited from stay-at-home model

Short for Advanced Micro Devices, AMD is a global semiconductor company with divisions that compete directly with Intel. While its processors are not part of the Apple lineup, Apple uses AMD’s graphics cards. The company was founded a year after Intel and is also headquartered in Santa Clara, Calif.

In its second-quarter fiscal 2021 results, the company reported revenues of $3.9 billion, up from $1.9 billion the prior year with net income of $710 million, from $157 million in 2020. The growth in the bottom line is due to revenue gains coupled with an increase in the gross profit margin to 48 per cent, from 44 per cent the prior year.

Mourad El-Gamal, an associate professor in the department of electrical and computer engineering at McGill University, researches integrated circuits and systems and is the co-founder of a company specializing in sensors and semiconductors.

“AMD used to have its own manufacturing facilities (before it) adopted the fabless model. (Under this model), they do the design then send it to be manufactured at whatever facility they can get access to, which is usually the top tier in the industry,” said El-Gamal.

AMD also benefited from the stay-at-home model early on in the pandemic, whereby families were purchasing additional electronic devices for themselves and their kids. “At the same time, the demand for cars went down so car manufacturers started shutting down operations and lowering forecasts. The chip manufacturers started converting production lines to serve the consumer business,” El-Gamal said, which also benefited AMD as it had access to increased supply.

In terms of trends in the semiconductor industry, El Gamal said, “the industry is (moving) toward supporting more computing (such as) quantum computing, chips for AI and more powerful processors for computers and servers.”