AMD Flags Slowdown in PC Market After Two Years of Strong Sales

AMD reported a gross margin of 48 percent and operating margin of 16 percent in the first quarter.

AMD Flags Slowdown in PC Market After Two Years of Strong Sales

AMD reported a gross margin of 48 percent and operating margin of 16 percent in the first quarter

Highlights
  • Demand for consumer and education PC segments has slowed
  • AMD expects gross margin of over 57 percent in near future
  • Meta and AMD are partnering for mobile internet infrastructure programme

Advanced Micro Devices Chief Executive Officer Lisa Su on Thursday flagged a slowdown in personal computers (PC) this year after two years of a "very strong PC market".

Su, at the chip company's analyst day, said while the downturn was natural after a long period of high, the market for high performance and adaptive computing was "great".

Research firm Canalys said in a note last week that demand for consumer and education PC segments has further slowed due to market saturation and inflation concerns, after reporting first-quarter US PC shipments underwent a third consecutive quarter of decline.

AMD said on Thursday it has seen a "tremendous" increase in demand for its cloud computing, data centre chips and those used in artificial intelligence applications.

It expects gross margin of over 57 percent in the near future and an operating margin in the mid 30 percent range. In the first quarter, the company reported a gross margin of 48 percent and operating margin of 16 percent.

In May, AMD said it expected non-GAAP gross margin for 2022 to be about 54 percent, while forecasting full-year and second-quarter revenue higher than Wall Street estimates.

In other news, Facebook parent, Meta Platforms, and chip maker AMD announced in May that they were partnering for a mobile internet infrastructure program that would bring base station costs down to make broadband more accessible around the world.

The programme, called Evenstar, was launched by Meta in early 2020 and promotes a platform called OpenRan that makes it possible for cellular network operators to mix and match hardware and software for building base stations instead of buying all of it from one equipment maker.

That gives operators more flexibility and makes equipment pricing more competitive, said Gilles Garcia, an executive with AMD's data center and communications group.

© Thomson Reuters 2022


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