AMD lost money on EPYC in 2018

Posted on Wednesday, January 30 2019 @ 11:17 CET by Thomas De Maesschalck
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One of the interesting tidbits from AMD's Q4 2018 earnings call is that the company didn't make any money on sales of EPYC server processors in 2018. While answering a question from analyst Stacy Rasgon, AMD CFO Devinder Kumar said the goal is on ramping the server business, but he couldn't predict whether this division would be profitable for the full year. At the moment, AMD still has an extremely small marketshare in the server market. It will be interesting to see how the rollout of the 7nm EPYC 2 processors will impact AMD's bottom line.
Stacy Rasgon
For my follow-up, I had a question just in general EESC. So its revenues are flat year-over-year. The server revenues are up a bunch and still losing money. And I get it there's some incremental investments and everything. But I guess how do we think about the profitability of that segment? How big does EPYC or Rome in the server business maybe to get before it sustainably profitable, especially semi custom has going to continue to decline 20% in 2019?

Devinder Kumar
I think the key, Stacy, is going to be ramping the server business in 2019. You are right that year-over-year we look at it, it's lost little bit of money. But fundamentally, it's investing in the go-to-market programs and launching the new products, investing in the ongoing engineering work that's needed to make sure that customers bring up the product on time. And semi custom, given the fact that is in the seventh year of the cycle, we expect it to be down from 2018 to 2019. But we do expect to go ahead and ramp of our server business and that will definitely benefit the EESC profitability in 2019.

Stacy Rasgon
Do you think it's profitable for the full year?

Devinder Kumar
Too early to tell, I don't predict profitability at the segment level. But we'll see how it evolves over the year.


About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.



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