How Can AMD’s Embedded and Semi-Custom Revenues Grow In The Next 5 Years?

We expect AMD‘s (NYSE:AMD) Embedded & Semi-Custom Revenue to grow at a CAGR of approximately 10% to $3.5 billion over our review period. At present, the segment accounts for about 53% of the company’s overall revenues and we expect this figure to increase to 58% by 2021. This is essentially because we believe that the key driver of revenue growth for this segment going forward will be the increasing use of AMD’s embedded processors in products that require high-to-moderate levels of performance, where key features include low cost, mobility, low power, and small form factor. The company also offers semi-custom System-on-Chip (SoC) products, the demand for which is driven by game console companies. All major game consoles — including Sony’s PlayStation 4, Nintendo’s Wii U and Microsoft’s Xbox One — are powered by AMD’s semi-custom SoCs. Embedded & Semi-Custom segment revenue has significantly increased in the last few years, from an estimated $409 million in 2012 to more than $2 billion in 2015. AMD’s embedded products range from low-power x86 architecture-based processors to high-performance, enterprise class, harsh environment-capable x86 architecture-based products.

NOTE: 

*We calculate AMD’s Embedded & Semi-Custom Revenue using the following formula –

Embedded & Semi-Custom Revenue = AMD’s Enterprise, Embedded and Semi-Custom Revenue (Reported) – AMD’s Server Revenue

See our complete analysis for AMD here

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