Thank you, Ruth, and good afternoon to all those listening in today. 2020 marked an inflection point in our long-term journey as we made significant progress establishing AMD as the high-performance computing leader. We significantly accelerated our business and exceeded our aggressive growth goals for the year while navigating industry-wide challenges caused by COVID-19. We built substantial momentum throughout the year as we successfully ramped volume production of more than 20 7-nanometer PC, gaming and data center products. Annual revenue grew 45%, setting a new record at $9.76 billion.
We also expanded gross margin for the fifth straight year and more than doubled net income from the prior year.
While the PC market grew approximately 13% in 2020 to surpass more than 300 million units for the first time since 2014, our annual client processor revenue grew by more than 50% as AMD Ryzen processor adoption increased. We delivered record client annual processor revenue as we gained significant share in 2020. Adoption of EPYC processors across cloud, enterprise and HPC customers also accelerated significantly in 2020. We set a new all-time record for annual server processor revenue. Server processor sales more than doubled year-over-year, and our overall data center sales are now a high-teens percentage of our total annual revenue.
Looking at the fourth quarter, we ended the year very strong. Revenue grew 53% year-over-year to a record $3.24 billion, while net income increased 66%.
Turning to our Computing and Graphics segment. Fourth quarter revenue increased 18% year-over-year to $1.96 billion. Desktop CPU revenue grew by a strong double-digit percentage year-over-year and sequentially driven by strong demand for our Ryzen processor family in both OEM systems and the channel. Sell-through of our new Ryzen 5000 processors featuring our Zen 3 core was particularly strong, more than doubling the launch quarter sales of any prior generation Ryzen desktop processor. In mobile, CPU shipments increased by a double digit percentage, both sequentially and year-over-year. We set records for both quarterly and annual mobile processor unit shipments as Ryzen 4000 notebook shipments continued to ramp in support of the 100 notebook design wins launched in 2020. At CES earlier this month, we launched our Ryzen 5000 mobile processors for ultrathin, gaming and commercial notebooks. These new mobile processors featuring our Zen 3 processor core, extend our performance and battery life leadership, delivering up to 23% higher performance compared to our previous generation and 17.5 hours of battery life.
We are on track to increase the number of notebook designs powered by our new Ryzen 5000 processors by 50% compared to our prior generation, positioning us well for further growth in 2021. In Graphics, revenue declined year-over-year and increased sequentially. Desktop GPU sales increased significantly from the prior quarter, driven by the ramp of our new Radeon 6000 series GPUs, featuring our RDNA 2 architecture that deliver up to twice the performance and 65% more performance per watt than our prior generation.
We are seeing very strong demand for our new GPUs. The Radeon 6000 series are our fastest-selling high-end GPUs ever with launch quarter shipments 3x larger than any prior AMD gaming GPU priced above $549.
We continue to ramp production to meet the strong demand, and are on track to expand our Radeon 6000 GPU portfolio in the first half of the year with the new RDNA 2-based desktop and mobile GPUs. Data center GPU revenue decreased year-over-year but increased sequentially, including initial shipments of our AMD Instinct MI100 accelerator. MI100 features our new CDNA data center GPU architecture and is the industry's fastest HPC accelerator for scientific research, and the first Data center GPU to break the 10 teraflops barrier.
We are making strong progress on our data center GPU hardware road map and expanding our software ecosystem in preparation for the launch of the first exascale supercomputer in the United States, the all-AMD powered Frontier system planned to go online later this year at Oak Ridge National Laboratory.
Now turning to our Enterprise, Embedded and Semi-Custom segment. Revenue of $1.28 billion increased 176% year-over-year driven by strong growth in both semi-custom and server processor sales. Semi-Custom sales increased year-over-year and sequentially based on strong demand for the next-generation Sony and Microsoft consoles.
Our Semi-Custom SoC sales are ramping faster than the last console cycle, and we expect sales to be better than typical seasonality in the first half of this year based on the current strong demand.
Now turning to server, we had record revenue in the fourth quarter as both cloud and enterprise sales grew sequentially. Cloud adoption remains strong as Google, Microsoft, Tencent and others continue expanding their use of EPYC processors to power larger portions of their critical internal infrastructure, and the number of AMD-powered cloud instances expands. 28 new public cloud instances launched in the fourth quarter from Alibaba, AWS and Oracle, while Google expanded general availability of their confidential computing VMs powered exclusively by EPYC processors to 9 regions.
For the year, the number of AMD-powered instances available from the largest cloud providers doubled to more than 200. In the enterprise, adoption of AMD-powered servers grew as Dell, HPE and Lenovo secured new end customer wins with Fortune 1000 accounts across key verticals, including manufacturing, financial services and automotive. In HPC, the number of AMD-powered supercomputers on the November top 500 list increased to 21 systems including 2 of the top 10 and the fastest supercomputer in Europe.
We expect our data center business to accelerate in 2021 as we further extend our performance, efficiency and TCO leadership with the launch of our next-gen server processors, code name Milan. Milan production began in the fourth quarter as planned, with initial shipments to cloud and HPC customers.
We are very pleased with the performance of Milan. We conducted the first public preview of Milan at CES, highlighting 68% better performance compared to 2 of the highest-end dual-socket processors from our competition when running a compute-intensive weather modeling simulation. We're on track to publicly launch our 3rd Gen EPYC Milan processors in March with very strong ecosystem support. In summary, our strong 2020 results and 2021 guidance demonstrate the growing momentum for our leadership product portfolio and the robust demand for high-performance computing. In the last year, we have all seen firsthand the essential role high-performance computing now plays in our daily lives, and we expect adoption to accelerate over the coming years as we enter a high-performance computing mega cycle, driven by the growing adoption of cloud computing services, accelerating digital transformation of industries and experiences, the transition to exascale supercomputing and the mainstream adoption of AI. Against this backdrop, we are very confident we have the right long-term strategy and capabilities to deliver a strong cadence of leadership products and make AMD the premier technology growth franchise. Longer term, our strategic acquisition of Xilinx further strengthens our technology capabilities and positions us well for growth across a broader set of markets. We passed several important regulatory milestones to date, and remain on track to close the transaction by the end of 2021. I am very proud of what AMD has accomplished over the last few years as our talented and dedicated employees established a new pace for innovation in the high-performance computing industry. I'm even more excited about what we can accomplish over the coming years based on our road maps and the strong opportunities we see to play an even larger strategic role with our customers and partners.
Now I'd like to turn the call over to Devinder to provide some additional color on our fourth quarter and full year financial performance. Devinder?