Advanced Micro Devices Inc (AMD), the world’s second-largest maker of computer processors, gave a lackluster sales forecast for this quarter as it struggles to bounce back from a severe PC slowdown.
Second-quarter revenue would be US$5.3 billion, plus or minus US$300 million, AMD said in a statement on Tuesday.
That compares with an average analyst prediction of US$5.51 billion.
Photo: Reuters
Like larger rival Intel Corp, AMD is navigating one of the worst-ever downturns for the PC industry, which is suffering from a post-COVID-19 pandemic funk.
Another challenge AMD is facing is that the largest cloud providers are focused on buying equipment for artificial intelligence (AI) workloads — an area where the chipmaker is just starting to build a presence.
AMD executives expect better times in the latter months of this year, echoing Intel’s stance.
“We remain confident in our growth in the second half of the year as the PC and server markets strengthen, and our new products ramp,” AMD chief financial officer Jean Hu (胡錦) said.
First-quarter sales at AMD’s data center business were little changed from a year earlier, with revenue of US$1.3 billion.
That compares with an average estimate of US$1.46 billion.
Revenue at its PC unit dropped 65 percent to US$739 million. Analysts had projected US$908 million.
Gaming came in at US$1.76 billion, versus an estimate of US$1.53 billion.
AMD said that while its sales to cloud providers increased, some of those large buyers of chips cut back on orders to reduce their stockpiles of unused parts.
Corporate buyers of data center gear reduced their ordering due to concerns about the economy, the company said.
The company said its gross margin would be 50 percent in the second quarter, roughly in line with estimates.
The company’s PC business probably bottomed out in the first quarter, AMD chief executive officer Lisa Su (蘇姿丰) said.
The global PC market would reach about 260 million units this year, AMD said.
That is slightly less than the 270 million projected by Intel last week.
In the first quarter, AMD’s profit was US$0.60 per share, excluding some items. Revenue fell 9.1 percent to US$5.35 billion. Analysts had predicted earnings of US$0.57 and revenue of US$5.31 billion.
AMD’s first-quarter sales decline was the first such contraction since 2019.
Analysts expect full-year revenue to be the same as last year.
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