Advanced Micro Devices Inc. (NASDAQ:AMD)

The analysis of the property, plant, and equipment data reveals several key trends over the observed five-year period. The gross value of property and equipment has shown a consistent and substantial increase, indicating ongoing investments or acquisitions in fixed assets.

Land, Building, and Leasehold Improvements

This category experienced a moderate increase from 208 million USD in 2020 to 853 million USD in 2024. The increase was relatively steady, with a notable acceleration between 2021 and 2022, where the value more than tripled. This suggests significant additions or reevaluations occurred during that period.

Equipment

The equipment figures presented a clear upward trend, starting at 1209 million USD in 2020 and rising to 2798 million USD by 2024. Each year showed growth, with a particularly marked increase between 2021 and 2022. This pattern reflects continued expansion or upgrading of machinery and equipment assets.

Construction in Progress

Values for construction in progress fluctuated somewhat but demonstrated an overall upward trajectory from 136 million USD in 2020 to 324 million USD in 2024. This indicates ongoing capital projects and suggests future additions to the fixed assets once construction is completed.

Property and Equipment, Gross

The aggregate gross property and equipment value increased sharply, nearly doubling from 1553 million USD in 2020 to 3975 million USD in 2024. This trend aligns with the increases shown in the individual asset categories, highlighting substantial capital expenditure during the period.

Accumulated Depreciation

Accumulated depreciation grew from -912 million USD in 2020 to -2173 million USD in 2024, reflecting the aging and usage of assets over time. The steady increase in accumulated depreciation is consistent with the growth in gross fixed assets but also indicates that asset depreciation is a significant factor affecting net asset values.

Property and Equipment, Net

Net property and equipment values increased from 641 million USD in 2020 to 1802 million USD in 2024, more than doubling in the period. The growth in net values, despite accumulated depreciation, indicates that new asset additions outpaced the depreciation expense, leading to a strengthening asset base.

Overall, the data shows a strong and sustained expansion in the company's investment in property, plant, and equipment. The increase in gross asset values, supported by ongoing construction projects and equipment acquisitions, coupled with the rising net asset figures, suggests a commitment to capacity growth and operational enhancement. The growth in accumulated depreciation highlights the aging of some assets but does not negate the positive net asset growth trend.

Average Age Ratio

The average age ratio demonstrates a fluctuating trend over the analyzed period. It started at 58.73% in 2020, increased to 61.76% in 2021, then declined significantly to 49.9% in 2022. Afterward, it gradually increased again to 52.93% in 2023 and 54.67% in 2024. This indicates variations in the proportion of assets' age relative to their useful life, suggesting periods of both acceleration in asset renewal and aging.

Estimated Total Useful Life

The estimated total useful life of property, plant, and equipment showed some variability. It began at 7 years in 2020, decreased to 6 years in 2021, then increased back to 7 years in 2022, followed by further increases to 8 years in 2023 and 9 years in 2024. This upward adjustment reflects a possible extension in the anticipated lifespan of the assets, potentially due to improved maintenance, updated asset classifications, or changes in accounting estimates.

Estimated Age (Time Elapsed Since Purchase)

The estimated age of the assets remained relatively stable, with minor fluctuations. It was at 4 years in 2020 and 2021, decreased to 3 years in 2022, and increased again to 4 years in 2023 and 5 years in 2024. The dip in 2022 could indicate asset additions or replacements lowering the average age, while the subsequent rise suggests aging of the existing asset base over time.

Estimated Remaining Life

The estimated remaining life of the assets experienced some variation but generally trended upwards towards the latter years. It started at 3 years in 2020, dropped to 2 years in 2021, rebounded to 3 years in 2022, and increased to 4 years in both 2023 and 2024. This pattern signifies adjustments in expectations for how long assets will continue to be useful, aligning with the upward trend observed in total useful life estimates.

Property and Equipment, Gross

The gross value of property and equipment has shown a consistent upward trend over the reported periods. Starting at $1,553 million in 2020, it increased to $1,836 million in 2021, followed by a significant jump to $3,020 million in 2022. The growth continued, reaching $3,376 million in 2023 and further rising to $3,975 million in 2024. This indicates sustained investment and expansion in the company's physical assets.

Accumulated Depreciation

Accumulated depreciation has also increased steadily each year, corresponding with the growth in gross property and equipment. The value rose from $912 million in 2020 to $1,134 million in 2021, then to $1,507 million in 2022. It continued an upward trajectory to $1,787 million in 2023 and $2,173 million in 2024. This pattern suggests ongoing depreciation expense reflecting the aging of assets and recognition of wear and usage over time.

Average Age Ratio

The average age ratio, representing the proportion of accumulated depreciation relative to gross property and equipment, exhibits some variability but remains within a certain range. It was 58.73% in 2020 and increased to 61.76% in 2021, indicating an older asset base or more cumulative depreciation. In 2022, the ratio dropped notably to 49.9%, potentially reflecting considerable acquisition of new assets. Subsequently, it increased again to 52.93% in 2023 and 54.67% in 2024. This fluctuation suggests changes in the asset composition and renewal pace, with the company balancing between aging assets and new investments.

Property and Equipment, Gross

The gross value of property and equipment has exhibited a consistent upward trend over the five-year period. Beginning at $1,553 million in 2020, the value increased steadily to $3,975 million by the end of 2024. This represents an overall growth of approximately 156%, indicating significant capital investment and asset expansion during this timeframe.

Depreciation Expense

Depreciation expense has also shown an increasing pattern, rising from $217 million in 2020 to $454 million in 2024. The increase is gradual but steadier between 2021 and 2024, suggesting that the growing asset base is contributing to higher annual depreciation charges. The growth in depreciation expense aligns with the increasing gross property and equipment values.

Estimated Total Useful Life

The estimated useful life of the assets has fluctuated slightly but demonstrates an overall increase. It reduced from 7 years in 2020 to 6 years in 2021, then returned to 7 years in 2022, and subsequently increased to 8 years in 2023 and 9 years in 2024. This upward shift in useful life may reflect changes in asset composition, improvements in asset durability, or revisions in depreciation policies extending the expected service period of the assets.

Analysis Overview

Over the period analyzed, the company has significantly expanded its property and equipment base, as evidenced by the substantial growth in gross asset value. Depreciation expense has increased in line with asset growth but at a relatively moderate pace given the extension of asset useful lives. The elongation of the estimated total useful life suggests a possible strategic shift in asset management, potentially mitigating the impact of higher asset values on periodic depreciation charges and improving long-term asset utilization.

The accumulated depreciation of property, plant, and equipment has exhibited a consistent upward trend over the periods analyzed. Starting at US$912 million in December 2020, it increased steadily to US$1,134 million in December 2021, US$1,507 million in December 2022, US$1,787 million in December 2023, and further to US$2,173 million in December 2024. This pattern indicates a continuous recognition of depreciation expense, reflecting ongoing usage and aging of the assets.

The depreciation expense has also shown a general increase over the years. From US$217 million in December 2020, the expense rose significantly to US$296 million in December 2021, and then to US$439 million in December 2022. After that, it remained relatively stable, slightly increasing to US$441 million in December 2023 and to US$454 million in December 2024. The noticeable rise in depreciation expense until 2022, followed by a more stable trend, may suggest substantial asset acquisitions or revaluations during earlier periods, with depreciation expenses stabilizing as a result of fewer or more consistent new asset investments thereafter.

The time elapsed since purchase for the assets shows minor fluctuations, with the value recorded as 4 years in 2020 and 2021, lowering to 3 years in 2022, then returning to 4 years in 2023, and increasing to 5 years in 2024. This slight variation implies changes in the asset base, possibly due to asset retirements or new acquisitions at different times, affecting the average age of the company's assets.

Overall, the data reflects a company actively managing its property, plant, and equipment, with a clear aging asset base as shown by increasing accumulated depreciation and time elapsed since purchase, alongside an elevated and stable depreciation expense indicative of substantial and ongoing investment in fixed assets over the analyzed period.

The financial data for property, plant, and equipment (PPE) indicates several notable trends over the given five-year period.

Net Property and Equipment Value

The net value of property and equipment demonstrates a steady upward trajectory. Starting at 641 million US dollars in 2020, the figure rises consistently each year, reaching 1,802 million US dollars by 2024. This represents a near tripling of the net PPE value over these five years, suggesting significant investment in fixed assets or capital expenditures during this period.

Depreciation Expense

Depreciation expense also increases over the period, beginning at 217 million US dollars in 2020 and growing to 454 million US dollars in 2024. The most notable jump occurs between 2021 and 2022, where depreciation expense rises by approximately 48%. After this point, the increases are more moderate but still consistent, reflecting ongoing asset usage and aging.

Estimated Remaining Life

The estimated remaining life of the fixed assets shows variation, decreasing from 3 years in 2020 to 2 years in 2021, then returning to 3 years in 2022, and extending to 4 years for both 2023 and 2024. This pattern may reflect changes in the asset base composition or revision of asset life estimates, possibly influenced by newer capital investments with longer useful lives.

Overall, the data suggests a strategy focused on expanding or upgrading physical assets, as evidenced by the rising net asset values and corresponding depreciation expenses. The fluctuations in estimated remaining life indicate adjustments in asset valuation and lifecycle assumptions, likely in response to capital expenditure programs and asset utilization patterns.