AMD sells fewer APUs and server chips than expected

AMD was already gloomy about the PC market and the latest quarterly figures confirm that sentiment. In the second quarter, the company turned in less turnover than expected, partly due to disappointing sales of desktop processors.

Sales of desktop processors, especially in Europe and China, fell short of expectations, while deliveries to laptop manufacturers were also disappointing due to a lack of consumer demand. Although AMD cut costs, it could not prevent profits from falling from the previous quarter. Company realized revenue of $1.41 billion with a profit of $37 million. Compared to the previous quarter and the second quarter of last year, this is a decrease of approximately ten percent.

AMD mainly sells Llano APUs to desktop manufacturers; to consumers it seems that the processors can wear out less well. This would have been caused by production shortages in the past: when processors were supplied primarily to OEMs, the consumer came second. As a result, consumers could buy the motherboards, but not the associated processors. Reduced consumer demand for AMD laptops led to less demand from manufacturers. However, demand for the new Trinity-generation laptop APUs largely offset the decline in Llano sales.

The server market also underperformed, although sales were up compared to last year. The Bulldozer-Opterons sold slightly less than in the first quarter, but AMD expects to sell more of that in the coming period. The laptop and desktop market and, after the introduction of Windows 8, the tablet market, are also expected to improve in the course of the year. Especially the Trinity apus and the new generation Brazos 2.0 should contribute to this. However, the desktop Trinitys aren’t expected until October, which will hurt the current generation’s sales to consumers; consumers will probably prefer to wait.

In the field of graphics chips and video cards, everything is going reasonably well, according to AMD, but sales there still fell by four percent. Still, AMD is not very optimistic for the rest of the year. Sales growth across the product range would be modest, but cost containment and new product generations should keep the company healthy.