Intel’s rival AMD has been able to take market share from the top dog in recent years. The current PC slump is affecting both groups – but at least AMD’s chip business is stable.
The downturn in the PC market has also caught the US chip company AMD. In the past quarter, sales in this line of business fell by 65 percent to $739 million. Overall, revenue fell nine percent year-on-year to $5.35 billion.
Sales of processors for data centers, on the other hand, remained stable at around $1.3 billion, as AMD announced after the US stock market closed on Tuesday. However, business was much less lucrative: the division’s operating profit fell to $148 million from $427 million a year ago. With PC chips, AMD made an operating loss of $172 million.
The bottom line was a loss of $139 million after being in the black from $786 million in the same quarter last year. AMD fared better than larger rival Intel, which posted a loss of $2.8 billion in the past quarter. Intel revenue fell 36 percent year-on-year to $11.7 billion, and its data center business fell 39 percent.
Industry expects improvement
After the boom at the beginning of the pandemic – when companies and consumers stocked up on notebooks for working from home – the PC market has recently collapsed. The market research company IDC calculated a drop in sales of 29 percent for the first quarter. However, the industry expects an improvement in the second half of the year.
AMD is also big in gaming console chips. There was a decline of around six percent to just under 1.76 billion dollars. Graphics cards that run applications based on artificial intelligence are currently in high demand. In this business, however, the chip group Nvidia is particularly strong – and AMD is only upgrading.
AMD disappointed the stock market with a sales forecast of around $5.3 billion – with a range of $300 million more or less – for the current quarter. The stock fell more than 6 percent in after-hours trading.