Sony and Microsoft are due to launch their next-generation gaming consoles next year, so current-gen products aren't in as much demand. This situation is not having the best effect on the financial performance of AMD, which supplies both companies with components for game consoles. But AMD managed to conclude a contract with Samsung to develop the graphics subsystem of the Korean giant's future processors for smartphones and tablets. This year, AMD will manage to receive $100 million from a new client, and this money will be enough to compensate for the forced severance of relations with Chinese partners who have launched the production of licensed βclonesβ of processors with the first generation Zen architecture.
Let us recall that the ban on cooperation with the Chinese side came into force at the beginning of summer, although Hygon brand processors were proudly demonstrated at Computex 2019 shortly before. The structure of the deal with Chinese partners did not imply significant costs for AMD; it participated in joint ventures only with its intellectual property. property, active methodological assistance to the Chinese was also not required, since licensed copies of AMD processors differed from them only in the set of instructions responsible for data encryption. Judging by the appearance of the first products based on Hygon processors on sale, they began mass production this year, but the American authorities put an end to their future, forcing AMD to abandon cooperation with the Chinese. The company managed to receive $60 million in royalties, and at a technology conference AMD's chief financial officer said that the funds received from Samsung in the amount of $100 million would be enough to compensate for the damage from the severance of relations with the Chinese.
Devinder Kumar also added that working with Samsung is more profitable in specific terms than with game console manufacturers. In the latter case, the added value created is not so great, although the multi-year contract itself guarantees AMD a stable revenue of several billion dollars. But the specific profitability of the contract with Samsung exceeds 50%, which is significantly higher than AMDβs average profit rate in the current period. For the Korean customer, the companyβs specialists will have to adapt the RDNA graphics architecture, so in this partnership AMD will bear some costs, unlike the Chinese contract. According to Samsung representatives, the first fruits of cooperation with AMD will be seen only in a couple of years.
Source: 3dnews.ru