AMD India growth tapers but poised to cross $500 million-mark

AMD India plays a key role in the global operations of Advanced Micro Devices (AMD), the multinational semiconductor company. Since entering the Indian market in 2001, AMD has established research and development (R&D) centers across Bengaluru, Hyderabad, Delhi, and Mumbai, contributing to the company's innovation in CPUs, GPUs, and Artificial Intelligence (AI) accelerators. 

AMD India has experienced significant growth in net sales over the past decade. For FY2024, its net sales reached ₹3,904.27 crore, a 25% increase from FY2023's ₹3,124.54 crore, as per data collated by VCCedge, a data research platform and a sister unit of VCCircle.

However, Profit After Tax (PAT) dropped significantly to ₹78.12 crore in FY2024 from ₹220.53 crore in FY2023. This decline highlights rising operational costs and heightened competition affecting the company's profit margins. 

The company saw consistent year-on-year growth in India, particularly since FY2022, when net sales crossed ₹2,000 crore. The upward trajectory aligns with AMD's focus on segments such as data centers, gaming, and advanced semiconductor solutions. 

Globally, AMD reported $22.68 billion in revenue for 2023, a slight 4% decline year-over-year, though Q3 2024 revenue grew 17% to $6.82 billion, driven by strong demand for MI300X AI processors and EPYC CPUs. Comparatively, AMD India achieved ₹3,904.27 crore in FY2024 revenue, a 25% annual increase, but faced a 65% drop in profit after tax, highlighting local margin pressures despite global profitability stabilisation. 

India’s importance within AMD’s global strategy has grown, evidenced by a $400 million investment announced in 2023 to expand its operations. This includes a commitment to create 3,000 engineering roles by 2028, with plans to enhance its R&D capabilities in areas like AI and semiconductor design. 

AMD’s slowdown in profit growth in India is part of broader global trends. The post-pandemic normalisation of demand, especially for personal computing and gaming products, has resulted in revenue corrections. AMD, like others in the tech sector, faces challenges in sustaining the surge experienced during the pandemic. 

Competition remains a critical factor. Intel’s aggressive positioning in India, coupled with Nvidia’s dominance in AI and GPU markets, has added pressure.  

In response to market changes, AMD has prioritized high-growth areas like AI and enterprise solutions. The company’s investments in EPYC CPUs and MI300X accelerators are aimed at capturing demand from large enterprise clients such as Microsoft, Google, and Meta, which began incorporating AMD’s chips into their cloud and AI models in 2023. 

This strategic shift has contributed to AMD’s growth in data center revenues globally. However, during the transition period, it has created challenges in maintaining momentum in consumer-facing segments, including the Indian market. 

The company’s growth trajectory reflects its ability to adapt to changing market conditions while expanding its footprint in high-potential areas like AI and data centers. In India, the company's $500 million investment and expansion plans signal long-term focus on AI, semiconductors, and enterprise solutions.