Could Next Gen Consoles Boost AMD’s Semi-custom Business?
For the past few months, one of the major questions for AMD was whether it was looking to next generation consoles to dramatically increase its revenue generated from semi-custom chipsets. Well, the semi-custom shipments are currently the only AMD business that is turning a net profit; however, we know that the company’s margins and net profit per console sale would decrease over time.
That being said, rumors surrounding console refreshes have been making rounds for a while. Which prompted speculation that those refreshes would lead to a boost in AMD’s console business. That business will however take some time to ramp, at least the “next few years” to reach a steady state, according to CEO Lisa Su.
At AMD’s quarterly earnings call conference, Su said the company expects the semi-custom revenue to keep growing annually:
Based on our current visibility, we expect semi-custom shipments and revenue to grow on an annual basis based on strong demand for game consoles and the ramp of our previously announced new business in the second half of the year.
Su however, did reveal that they had already won three gaming semi-custom SOC designs, with at least one of those to begin ramping in the second half of this year, while all of those SOCs launching by 2017. As for who is nabbing those game-related SOCs, we have our smart money on the PlayStation 4 Neo, Nintendo NX, and (almost certainly) the next gen Xbox One.
With these three design wins, AMD is expecting a lifetime revenue of about 1.5 billion or greater, over the next three to four years. Though the chip maker didn’t clarify whether this revenue was additive to its existing game console business.