AMD eyes 50% revenue from high-growth areas in 3 years

The company reported a revenue of $1.16 bn for the quarter ended June 30, a decline from $1.41 bn recorded during the corresponding period last year

Battered by slowing sales of personal computers (PCs) worldwide, Advanced Micro Devices Inc (AMD), a New York Stock Exchange-listed semiconductor design company, is now focusing on cloud-driven growth segments - dense server, professional graphics, low power new client, embedded and semi-custom chips.

"At AMD, probably 95 per cent of our business used to come from the PC segment less than two years ago. Our objective is to get more than 20 per cent of our revenues to flow in from these new high-growth segments by the end of this year, and strategically diverse our portfolio to garner 40-50 per cent in the next two to three years. That's how we are going to transform AMD," said Rory Read, president and chief executive.

The company reported a revenue of $1.16 billion for the quarter ended June 30, a decline from $1.41 billion recorded during the corresponding period last year. It reported a net loss of $65 million for the quarter. The company's computing solutions business (microprocessors) recorded a revenue of $841 million, a decline of 20 per cent over the corresponding previous quarter.

Read, who was in Hyderabad to open AMD's global design centre, said other players and competitors were not worried about these growth areas, including the semi-custom chip space, where AMD was looking at making a clean sweep of the gaming consoles market.

"We have a rich base of intellectual property (IP), which is the foundation of our innovation. What we are trying to do is to take the IP base that we used in the traditional PC and graphics, into these high-growth areas," he said.

With the three-step turnaround strategy that AMD is undergoing, including restructuring its business for the new cloud era, investing in new areas like Android and ARM-based solutions, and then delivering these products to execute the turnaround, AMD will return to profitability and a positive free cash flow in the third quarter of this year, he added.

Quoting information technology research firm IDC's study, Read said AMD was getting close to 30 per cent of the chip market in India, which was a far a different number (eight per cent) two years ago. "We are seeing a lot of customers embracing new technologies, which have been developed by AMD's design centres in India and globally. Our APUs (accelerated processing units) are a key part of the success that AMD is enjoying in India," he said.