AMD missed its own sales forecast by 1.1 billion US dollars. Business with Ryzen CPUs has collapsed and graphics card sales are also moderate.
AMD is also feeling the full impact of the recession in the semiconductor world. While three months ago, with record numbers, AMD still looked rosy for the company, AMD now ranks behind Intel and Nvidia with catastrophic business results.
The official sales forecast for the period July to September 2022 put AMD three months ago at 6.7 billion US dollars (+/- 200 million US dollars). In fact, it should only be 5.6 billion US dollars, i.e. 16.4 percent less on average. According to US financial law, AMD now had to issue a sales warning with preliminary business results. The final numbers will come on November 1st, 2022.
Ryzen CPUs break down
In particular, the business with desktop and notebook processors (Ryzen, Athlon) and mainboard chipsets – noted by AMD in the “Client” group – collapsed: by 40 percent year-on-year and by 53 percent quarter-on-quarter to just US 1 billion -dollars. The Ryzen 7000 CPUs are hardly included in the numbers because they were only introduced at the end of September.
AMD hides the reduced sales of Radeon graphics cards in the “Gaming” group, which is boosted by the semi-custom processors for the Playstation 5, Xbox Series X/S and the Steam Deck, among other things.
|AMD’s Revenue by Division (in billions of US dollars)|
|business area||Q3/2022||Comparison Q2/2022||Comparison Q3/2021|
|client||1.0||– 53%||– 40%|
Only the announcement makes it clear that the GPUs are also affected, probably also because of the discontinued GPU mining for the cryptocurrency Ethereum: AMD is making a write-down of 160 million US dollars in the graphics and client divisions in view of the high inventories.
CEO Lisa Su said, “Although 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.”
However, all is not looking bad for AMD. The data center and embedded divisions – the latter now with Xilinx products – continued to grow, with Eypc CPUs, in particular, making life difficult for Intel’s declining server business. Meanwhile, the Xilinx acquisition is also the reason why AMD’s revenue increased by 29 percent year-on-year – in the third quarter of 2021 AMD made $4.3 billion. AMD’s shares fell by almost 7 percent to just under 66 euros after the sales warning.