AMD Continues to Boost its R&D Investments – Spending is Up 23%

AMD Continues to Boost R&D Investments - Spending is Up 23%

AMD Continues to Boost its R&D Investments – Spending is Up 23%

AMD has just released its Q2 2020 earnings, and it has revealed solid growth for the company this quarter and higher growth expectations through the remainder of 2020. 

Right now, AMD expects its full-year 2020 revenues to be 32% higher than 2019, giving the company more money to play around and more money to invest in research and development. 

In Q2 2020, AMD has increased its R&D spending by around 23.3% year-over-year (YoY), representing an increase of $87 million. That’s a lot of money, and this increase in spending is a clear sign that AMD’s prepared to continue aiming higher within the CPU and GPU markets. 

Research and Development is the lifeblood of every technology company, and while Ryzen and RDNA were created on shoestring budgets, AMD knows that it needs to invest where it counts if it wants its success to continue. AMD is diversifying, and that diversification will require increased spending. This year, AMD plans to split its graphics roadmap into gaming-focuses and datacenter-focused segments, creating RDNA 2 and CDNA. With this shift, AMD plans to become more competitive within both of these markets, delivering its customers more value while increasing the company’s total GPU sales. 

Given the perceived weakness of Intel following its recently announced 7nm delays, AMD must continue innovating to maintain x86 as the instruction set architecture (ISA) of choice within the datacenter and PC markets. AMD cannot afford to slow down its development efforts. 


   
R&D Budget (Millions) 2018 2019 Increase (QoQ) Increase (YoY)
Q1 $343 $373 0.5% 8.7%
Q2 $357 $373 4.5%
Q3 $363 $406 8.8% 11.8%
Q4 $371 $395 -2.7% 6.4%
R&D Budget (Millions) 2019 2020 Increase (QoQ) Increase (YoY)
Q1 $373 $442 11.8% 18.5%
Q2 $373 $460 4.0% 23.3%

 

AMD’s main concern right now is to ensure that its success continues in the coming quarters, which means that the company cannot allow its R&D efforts to fall behind. AMD needs a strong hardware roadmap to continue competing with both Intel and Nvidia, both of which have the ability to outspend AMD. Strong IP and continuous generational improvements will help AMD to continue its positive growth, but as its CPUs and GPUs become more complex, more and more effort will be required to continue pushing the performance envelope. 

AMD Continues to Boost its R&D Investments - Spending is Up 23%  

AMD’s original Zen architecture released in Q1 2017 and that quarter saw AMD spend $271 million on R&D. In Q2 2020, AMD has spent $460 million, representing an increase in spending of almost 70%. That’s how far AMD has come since the release of Ryzen. 

You can join the discussion on AMD’s increased R&D spending on the OC3D Forums.