AMD Adds New Embedded Products To Its Portfolio: Embedded and Semi-Custom To Account For A Larger Portion Of AMD’s Revenue By 2020

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Advanced Micro Devices

Earlier this week, AMD (NYSE:AMD) extended its embedded portfolio with the 3rd Generation AMD Embedded G-Series SoC and the Embedded G-Series LX SoC. The new offerings  expand developers’ ability to scale x86 platforms with improved performance, power and price. Additionally, the company introduced two new higher performing 3rd Generation AMD Embedded G-Series SoCs, codenamed “Prairie Falcon” and “Brown Falcon, which provide pin compatibility for G-Series processors with the Embedded R-Series SoC. AMD believes that the new lineup will attract a wide range of customers including firms that manufacture smart TVs, IP set-top boxes, casinos, communication networks and industrial control among others. (Read AMD Press Release)

As part of its multi-year effort to transition its business model by diversifying its revenue base, AMD has focused on increasing the revenue contribution from fast growing segments, including semi-custom and ultra-low power processors, professional graphics processors, as well as processors for dense server and embedded solutions. AMD continues to align larger portions of its R&D investments to take advantage of the long-term growth opportunities in the Embedded and Semi-Custom segment, which now accounts for over 50% of the company’s total revenue compared to less than 10% in 2012. We expect the revenue contribution of AMD’s Embedded and Semi-Custom business to increase further over our review period.

AMD

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The year 2015 was a challenging one for AMD. In addition to weak macroeconomic conditions and declining PC sales, AMD was hit by significant market share loss to Intel (NASDAQ:INTC) in APUs (i.e., Accelerated Processing Units) and Nvidia (NASDAQ:NVDA) in GPUs (Graphics Processing Units). However, the company is confident that its long term technology investments and sharpened focus have created a strong foundation for future growth. It expects revenue to grow in fiscal 2016.

Our price estimate of $2.25 for AMD is at an approximate 10% premium to the current market price.

See our complete analysis for AMD

Have more questions about AMD? See the links below:

>> Embedded & Semi-Custom, PC and Server Processors & Graphics: What’s AMD’s Revenue and EBITDA Breakdown?

>> By What Percentage Did AMD’s Revenue & EBITDA Grow In The Last 3 Years?

>> What’s AMD’s Fundamental Value Based On Expected 2015 Results?

>> How Important Is the PC Market For AMD’s Business?

>> How Has AMD’s Revenue And EBITDA Composition Changed Between 2012 And 2015?

>> AMD’s Revenue & EBITDA Growth in The Next 5 Years: Trefis Estimate

>> AMD’s Potential Valuation In 2020

>> How Much Revenue Can AMD Earn From Its Server Business BY 2020?

>> How Much Revenue Can AMD Add By Increasing Its GPU Market Share?: Trefis Estimate

>> How Is AMD’s Revenue & EBITDA Composition Expected To Change In The Future?

>> AMD: The Year 2015 In Review

>> What’s AMD’s Fundamental Value Based On Expected 2016 Results?

>> What Happens To AMD’s Valuation If Embedded & Semicustom Revenue Declines To $2 Billion In 2016?

>> Where is AMD’s 2016 Revenue Growth Expected To Come From?

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