AMD follows Intel, something is saved in the disastrous quarter

The third quarter of 2022 of AMD it closed with a resounding sound -93% on profits, a figure that is expected but which in any case strongly contrasts with the Q3 of the previous year during which the PC market was still growing. Now – we know – the situation is quite different, and not only the Sunnyvale company is paying the consequences but also the competition.

Not all is negative, however, at AMD: revenues grow by 29% up to reach 5.57 billion dollars, and this was possible thanks “to the increase in sales of data centers, embedded systems and game consoles “, as Lisa Su, CEO of the company, explains. Which motivates the collapse recorded in the last three months:

Q3 results fell short of our expectations due to the weakening of the PC market and substantial inventory reduction actions along the PC supply chain.

Depreciation expenses relating to the acquisition of Xilinx also affect the company’s financial performance, which led to:

• gross margin down by 6 percentage points on an annual basis
• operational loss of $ 64 million compared to operating income of $ 948 million in Q3 2021
• profit 66 million dollars against 923 million dollars in Q3 2021 (-93%)

In general, the segment that suffered the most from the contraction is that client, down 40% “due to the reduction in processor shipments resulting from a weak PC market“. The average selling price increases (ASP) “thanks to a richer mix of Ryzen desktop processor sales“.

As mentioned at the beginning, however, some items are positive as confirmed by the revenues of:

• Data Center: $ 1.6 billion, + 45% year on year “thanks to strong sales of EPYC server processors“
• gaming: $ 1.6 billion, + 14%, partially offset by the decline in GPUs
• embedded: 1.3 billion dollars, + 1,549% mainly due to the inclusion of revenues from Xilinx embedded products

AMD expects that the last quarter of the year will close with revenues of $ 5.5 billion (with a margin of error of $ 300 million), + 14% compared to last year thanks above all to embedded and data centers and in line with Q3. The 2022 should therefore end with a turnover of 23.5 billion dollars (always with the margin of error reported above), + 43% every year.