Sales of microprocessors for computing and graphics shot up dramatically for AMD in 2017, pushing the company from operating income losses into profitability, executives said yesterday during the Q4 and 2017 earnings call.

President and CEO Lisa Su (pictured above) said 2017 represented "a key product and financial inflection point for AMD" that showed the three-year-old strategic plan to reshape the company was paying off. In addition to strong sales for computing and graphics chips, AMD saw steady revenues last year in the server and enterprise markets, she said.

Su noted that AMD continues to work with partners to roll out CPU and microcode patches for Spectre, one of two major chip-level vulnerabilities that came to light earlier this month. Over the longer term, the company plans to come out with redesigned processor cores that address Spectre at the hardware level, she added.

Zen 2 Redesigned for Spectre

Spectre and Meltdown, which stem from how microprocessors manage kernel memory, affect practically all chips produced by Intel over the past two decades, as well as those from Apple. CPUs from AMD and ARM are vulnerable only to Spectre.

"For Spectre Variant 1, we continue actively working with our ecosystem partners on mitigations, including operating system patches that have begun to roll out," Su said during yesterday's earnings call. "We continue to believe that Variant 2 of Spectre is difficult to exploit on AMD processors."

Su added that AMD is working over the longer term to incorporate changes into its processor cores that will prevent Spectre-like exploits. The first of those redesigned chips to arrive on the market will be the Zen 2, a 7-nanometer-based, x86 processor, she said.

2018 a 'Defining Year for Server Business'

AMD's 2017 revenues totaled $5.33 billion, a 25-percent increase over 2016 revenues. Senior vice president, CFO and Treasurer Devinder Kumar said it was "particularly noteworthy that the Computing and Graphics segment was profitable for the first time in six years."

Helping to drive those increased revenues were several new products released by AMD during 2017, including the Ryzen and Ryzen Pro processors for consumer- and enterprise-focused PCs; the Ryzen mobile processor; the Radeon Pro Vega, featured in Apple's latest iMac Pro; and the Epyc server system-on-chip for enterprise data centers, aimed at helping AMD better compete with Intel in the data center processor market.

At the end of 2017, AMD had closed "dozens of new server deals in the quarter, securing key design wins with education, financial services and hosting companies," Su noted yesterday. "We also had several key announcements in the quarter, as we continue to see a steady drumbeat of adoption."

According to its outlook for Q1 2018, AMD expects first-quarter revenues of around $1.55 billion, "an increase of 32 percent year-over-year, primarily driven by the strength of the ramp of new Ryzen, GPU and Epyc products."

"2018 is clearly a defining year for the ramp of our server business and we remain focused on our goal of achieving double-digit market share in this important market segment," Su said. "2017 laid a solid foundation with strong financial results and significant progress towards achieving our long-term goals."