After Nvidia and Intel: Now AMD with a dramatic sales warning
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Now AMD also has to warn of a dramatic drop in sales: In the third quarter, AMD is likely to miss $1.1 billion in sales, mainly due to CPU client sales – despite the Ryzen 7000.
It almost had to be like this: After AMD had gotten through the difficult year brilliantly, while Nvidia and Intel had massive problems, you now have to admit lower sales – despite the Ryzen 7000.
USD 1.1 billion in sales are missing
Previously, AMD had forecast $6.7 billion in revenue for the third quarter. Even if the quarter ends on October 31st. ends, AMD is already sending a so-called sales warning. One plans with a turnover of 5.6 billion USD, ie 1.1 billion less. The gross margin is also shrinking: instead of 54 percent, it should only be 50 percent. AMD will then provide the final figures on November 1st. before. After all: Compared to the same quarter of the previous year, sales growth of 29 percent is still in the plans. Actually, however, they wanted to be 55 percent above the previous year. There are no statements about the profit so far.
But where exactly does the shoe pinch at AMD? In particular, the client division (CPUs and APUs: desktop and mobile) collapsed significantly compared to the previous quarter, AMD speaks of 53 percent less sales. The PC market is weaker than expected and there are “significant inventory corrections in the PC supply chain”. As a result, fewer client CPUs (desktop and notebook CPUs and APUs) were shipped and their average price was also lower than before. In addition, AMD has to spend around 160 million US dollars on inventory, pricing and related provisions in the “graphics and client business”. The prices for graphics cards, which have fallen sharply in retail, are likely to be reflected here. The data center, gaming (overall, with console SoCs) and embedded areas explicitly have no problems: Here one is on plan or even above plan.
| Sales (bn) | |||
|---|---|---|---|
| Q3 (preliminary) | previous quarter | same quarter last year | |
| data centers | ~$1.6 | up 8% | up 45% |
| clients | ~$1.0 | down 53% | down 40% |
| gaming | ~$1.6 | Flat | up 14% |
| embedded | ~$1.3 | up 4% | Up 1.549% |
| Total | ~$5.6 | down 15% | up 29% |
“The PC market weakened significantly this quarter,” explains Dr. Lisa Su, CEO of AMD. “While our product portfolio remains very strong, macroeconomic conditions resulted in lower than expected PC demand and a significant inventory correction across the PC supply chain. As we navigate the current market conditions, we are pleased with the performance of our segments Data Center, Embedded and Gaming and the strength of our diversified business model and balance sheet.We remain focused on executing our leading product roadmap and look forward to launching our next-generation 5nm data center and graphics products later in the quarter bring.” Su probably means that Radeon RX 7000 will be released in the fourth quarter, i.e. this year.
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