Gross margin
AMD is now returning to profits. For fiscal 3Q16, the company expects its non-GAAP (generally accepted accounting principles) gross margin to remain stable at around 31%. That?s sequentially flat but higher than 22.5% reported in fiscal 3Q15.
The improvement in gross margin is a result of a higher mix of semi-custom SoCs (system-on-chip) and the move to Samsung?s (SSNLF) more cost-effective 14 nm (nanometer) FinFET (Fin Field Effect Transistor) technology.
AMD?s business segments at a glance
In the previous part of the series, we saw that in fiscal 2Q16, Advanced Micro Devices (AMD) returned to profits and reported revenue growth. The company expects this momentum to continue in fiscal 3Q16, driven by strong demand for GPUs (graphics processing units) and APUs (application processing units).
What?s the Secret behind Advanced Micro Devices? Profits?
EESC?s financial performance
The EESC segment is mainly comprised of SoCs (system on chip) for game consoles. It also includes ARM (Advanced RISC Machines)-based and x86-based server processors and embedded processors.
In fiscal 2Q16, the EESC segment?s revenue rose 5% YoY (year-over-year) to $592 million. It accounted for 57.6% of the company?s revenue. The revenue was largely driven by strong sales of Sony?s (SNE) PlayStation 4. The segment?s operating profit doubled from $27 million in fiscal 2Q15 to $84 million in fiscal 2Q16.
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