AMD Gives Another Bullish Forecast; Data Center Sales Double

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(Bloomberg) -- Advanced Micro Devices Inc. gave a strong forecast indicating that market share gains, particularly in servers, are helping it make up for a tight supply of chips. Fourth-quarter revenue will be about $4.5 billion, plus or minus $100 million, Santa Clara, California-based AMD said Tuesday in a statement. That compares with an average analyst estimate of $4.25 billion. The chipmaker is on course to exceed an earlier forecast and post a sales gain of 65% for 2021, it said.

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Under Chief Executive Offer Lisa Su, the 52-year-old company is experiencing one of its strongest periods, offering products that are the equal or surpass those of larger rival Intel Corp. AMD’s growth, relative to that of its competitor, indicates the company is gaining market share.

Data center sales in the period ended Sept. 25 more than doubled from a year earlier, AMD said in the statement.

“Data center performed very well and we see strong demand,” Su said on an conference with analysts.

While the company isn’t giving specific targets, AMD’s leader said she expects the demand environment to be strong in 2022. The PC market will be ‘flattish,’ Su said, held back by supply constraints of some components while demand for video-game console chips will go up.

In general, buyers of electronic components have become more selective and are no longer rushing to order as much as they can of everything for immediate delivery, Texas Instruments Inc. executives said Tuesday. The Dallas-based chipmaker’s lackluster revenue forecast for the current period sent its stock down as much 5.3% in extended trading.

AMD’s chips are made by Taiwan Semiconductor Manufacturing Co., which has surpassed Intel in production technology. TSMC also supplies Apple Inc., Qualcomm Inc., Nvidia Corp. and many other technology companies, and the Taiwanese company is struggling to keep up with demand.

AMD supplies graphics chips used in Microsoft Corp.’s Xbox and Sony Corp.’s PlayStation in addition to competing with Intel in processors for personal computers and servers that run the internet. AMD’s Radeon chips compete with Nvidia’s GeForce line in the add-in graphics cards prized by PC gamers. Last week, Intel reported revenue grew 5% in the third quarter. Its PC-related processor business sales declined around 2%. The world’s largest chipmaker’s data center business expanded 10% helped by demand from corporations. Revenue from hyperscalers -- the owners of large data centers that are the backbone of the internet -- dropped.

AMD reported third-quarter net income of $923 million, or 75 cents a share, compared with $390 million, or 32 cents, in the same period a year earlier. Revenue rose 54% to $4.31 billion.

The shares were little changed in extended trading after closing at $122.93 in New York. The stock has gained 34% this year.

(Updates with Texas Instruments’ results in the fifth paragraph.)

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