Chip maker AMD brushes off industry woes as revenue surges 71% to top $5bn for first time

US chip maker Advanced Micro Devices has reported a record first-quarter performance after revenue topped $5 billion for the first time, brushing off industry challenges and analyst estimates.

Revenue grew by 71 per cent a year to about $5.9bn during the period and increased by 22 per cent from the fourth quarter of last year, the California-based company said.

Gross profit jumped 78 per cent to more than $2.8bn.

Earnings per share were $1.13, beating the estimated $0.91 and up 117 per cent on an annual basis.

The results include the first six weeks of revenue from Xilinx, another US chip maker that AMD acquired in February for $35bn.

AMD said revenue would have increased by only 55 per cent without the deal.

The company’s shares were trading about 3 per cent higher at $93.87 per share at 6.35pm UAE time yesterday.

AMD executives now expect second-quarter revenue to surpass $6.5bn, well above analysts’ estimates of about $6.38bn.

“The first quarter marked a significant inflection point in our journey to scale and transform AMD as we delivered record revenue and closed our strategic acquisition of Xilinx,” said chairwoman and chief executive Lisa Su.

“Demand remains strong for our leadership products, with our increased full-year guidance reflecting higher AMD organic growth.”

Ms Su said each of AMD’s businesses grew by a “significant” double-digit percentage year over year.

The global semiconductor industry was beset by supply disruptions last year as consumer demand increased after the onset of the Covid-19 pandemic in 2020.

However, the sector is poised for a big rebound this year, with sales expected to cross $600bn for the first time, according to Allianz unit Euler Hermes.

Sales had already hit a record high of $553bn last year.

The current semiconductor shortage is unlikely to be resolved in the near future, the World Economic Forum said, citing logistical and time challenges.

The first-quarter results reflected AMD’s continued strong performance after a robust 2021, in which it captured more than a quarter of the CPU market, its best performance so far, according to Mercury Research.

Only rival Intel holds a bigger market share.

While the PC market is experiencing “some softness”, AMD will focus on the premium, gaming and commercial segments of the market, where the company sees “strong growth opportunities”, said Ms Su.

Operating income in the first quarter was up 44 per cent annually to $951 million while net income rose by 42 per cent to $786m.

However, both figures were down by about a fifth from the previous quarter.