- Phillip Apps
As required by management, this year I will give an introduction on some companies in the assigned sector. The second company I will introduce here is AMD Inc., which has their stock traded in US, Mexico and Germany.
AMD Inc. is global semiconductor company primarily offering x86 microprocessors, chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs.
They also provide products such as server and embedded processors, semi-custom System-on-Chip (SoC) products, development services and technology for game consoles. The company also license portions of their intellectual property (IP) portfolio.
The trademarks they used include AMD, the AMD Arrow logo, ATI, and the ATI logo, Athlon, EPYC, Radeon, Ryzen.
In the first quarter, 2020, the revenue was $1.8 billion (USD), which increase 40% compared to the prior year period. The increase was primarily due to 73% increase in Computing and Graphics segment’s revenue, which offset the 21% decrease in Enterprise, Embedded and Semi-Custom segment.
The increase in Computing and Graphics segment net revenue was primarily due to higher sales of Ryzen™ processors and Radeon™ products. The decrease in Enterprise, Embedded and Semi-Custom net revenue was primarily due to lower semi-custom revenue, partially offset by higher EPYC™ server processor revenue.
Risk and Challenge
1. The highly competitive environment in the Computing and Graphics segment, especially from Intel Corp., which is the market leader.
2. AMD Inc. relies on third parties to manufacture their products, so the company may be affected if those parties cannot supply in timely basis.
3. R&D progress is the main factor of the company competitiveness; any delay or failure means lag behind with the market competitor will greatly affect performance.
4. The outbreak of COVID-19 cause significant effect on global economy, hence the demand on company’s products and services.
Closing price(12/5/2020): USD$53.76
Current ratio: 1.95x
Company quarterly report, 1st Quar, 2020
I, Tsui Man Fai, am a licensed person under the Securities and Futures Commission. Until the date this commentary was published, neither I and/or my affiliates are the beneficiary of the securities mentioned herein or are entitled to any financial interests in relation thereto.