AMD cuts revenue forecasts amid worst year of PC shipments slump | Tech Rasta

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advanced micro devices Inc.

AMD 0.57%

Revenue forecast for the latest quarter was revised down, citing lower-than-expected demand for chip-based PCs.

The chipmaker, which sells processors for laptops and desktops alongside its massive video game graphics chip business, on Thursday said it expected about $5.6 billion in sales in the recently quarter. ended, which was about $1.1 billion less than previously mentioned. It leaves a calmer view in August.

Third-quarter sales are expected to drop 15% from the previous quarter, but up 29% from the same period last year. When the company announced its official results on Nov. 1, AMD said

“The PC market was significantly weaker this quarter,” AMD Chief Executive Lisa Su said. Macroeconomic conditions drive lower-than-expected PC demand. and significant inventory corrections in the PC supply chain,” she added.

The global chip shortage affects how quickly we can drive out of the lot or buy a new laptop. WSJ visits a manufacturing facility in Singapore to see the complex process of chip manufacturing. And how one producer is trying to overcome the shortage. Photo: Edwin Cheng of The Wall Street Journal.

AMD shares fell more than 3 percent in after-hours trading on Thursday.

PC shipments are experiencing a sharp drop in the years after rising epidemic-related sales were followed by a slowdown in consumer spending on consolidated electronics. to pc and smartphone

Global PC shipments are expected to decline 12.8 percent this year, with tablet shipments falling 6.8 percent, data analytics firm IDC said last month. “It is expected to contract again in 2023 due to slowing consumer demand. Education needs were largely met. and corporate needs are being pushed aside due to deteriorating macroeconomic conditions,” IDC said.

AMD’s main competitor is Intel. Corp.

It posted an unexpected loss in the second quarter on its biggest revenue decline in more than a decade. Like AMD, Intel cited PC slowness as the main culprit. It is estimated that overall sales of those computers will drop 10% this year.

Nvidia graphics chip company Corp.

Most Valuable US Chip Company by Market Cap In August it issued a profit warning before quarterly sales. And it followed that month with a muted outlook reflecting weaknesses in the PC business and the smoothness of video gaming.

Qualcomm Inc.,

mobile phone chip supplier Reduce smartphone shipment forecasts and given the slump in sales trend in July Micron Technology memory chip maker Inc.

Last week it released another downward trend in revenue after failing to meet sales expectations for the latest quarter. This is linked to the stagnation in the PC and smartphone market.

AMD said it expected to charge about $160 million to reflect items such as inventory and pricing issues.

Although the PC market is weak, AMD says its chip supply to data centers and gamers remains strong. The data center business is expected to generate about $1.6 billion in revenue in the third quarter, up 45% from a year ago, while gaming sales are expected to grow 14%, as well as $1.6 billion.

Although the chip companies are closely tied to consumer devices in the coming months Other semiconductor suppliers Still seeing strong demand despite economic challenges The chip shortage that started during the pandemic has not subsided in certain parts of the industry. including chipmakers supplying the automotive and medical equipment industries.

Infineon Technologies AG

A major German chipmaker that sells chips for automobiles and industry. It announced quarterly earnings in August that surpassed Wall Street expectations. and has issued a strong outlook for the next quarter. NXP Semiconductors NV, a major supplier to the automotive industry It has also dealt with macroeconomic woes to report better-than-expected earnings in July.

Write to Asa Fitch at asa.fitch@wsj.com and Will Feuer at Will.Feuer@wsj.com.

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