AMD’s revenue from laptop and desktop processors is falling sharply due to a weak PC market
AMD had 51 percent less turnover in the past quarter with its Client division, which includes the company’s consumer processors. The chipmaker attributes this to a weak PC market. Turnover from data center products actually increased significantly.
The turnover of this Client part amounted to 903 million dollars in the last three months of 2022, is evident from the quarterly figures. That’s down 51 percent from the same period in 2021. AMD explains this by pointing to limited processor deliveries, which stems from the weak PC market and “a significant inventory correction across the PC supply chain.”
About the latter says CEO Lisa Su in an oral explanation of the results that AMD had delivery numbers that were below consumption during the fourth quarter, so that customers can use up their existing inventories. AMD, like many other chipmakers, applied this practice of undershipping in the last two quarters and will continue to do so to a slightly lesser extent during the current first quarter of 2023. Su thinks PC sales will bottom out during the current first quarter and improve somewhat after that.
Other areas fared much better, including the Data Center segment. There, turnover increased by 42 percent during the previous quarter and operating income amounted to 444 million, compared to 369 million dollars a year earlier. AMD attributes this increase to higher sales, which was partly offset by more investments in R&D.
The Embedded segment had a higher turnover of 1868 percent, but that is almost entirely because the turnover of the acquired Xilinx has now been added there; last year, Xilinx’s turnover was not yet included.
Total revenue for the fourth quarter rose by 16 percent to $5.6 billion, compared to $4.8 billion a year earlier. Net profit fell by 98 percent, from $974 million to $21 million, which AMD mainly attributed to a series of write-downs related to the Xilinx acquisition.
AMD’s total revenue for 2022 amounted to $23.6 billion, an increase of 44 percent compared to 2021. This was mainly achieved by increased revenue from the Data Center, Gaming and Embedded components. Net profit amounted to $1.3 billion in 2022, while $3.2 billion remained at the bottom a year earlier.