Advanced Micro Devices Inc (AMD) on Tuesday reported its third-quarter profit topped analysts’ predictions, with sales coming in roughly in line with projections, after an expansion into server processors helped offset a slumping PC market.
In the current period, revenue is forecast to be about US$5.5 billion. Although that would miss the average estimate of about US$5.9 billion, it represents an increase as several of AMD’s peers are suffering contractions.
AMD chief executive officer Lisa Su (蘇姿丰) told investors that a long turnaround of the chipmaker is still on course, helped by market-share wins.
Photo: Reuters
The company expects sales to increase about 14 percent in the fourth quarter, in contrast with double-digit declines at rivals Intel Corp and Nvidia Corp.
“We believe we will continue to gain share” in the data-center market, Su told analysts on a conference call.
“We’re planning for a weaker PC environment in the fourth quarter,” as customers cut inventory and the company ships fewer parts, she said.
Underlining how important servers are becoming to AMD’s finances, the company’s data-center unit posted a revenue increase of 45 percent from a year earlier. That helped cushion the effects of a 40 percent drop in its PC chip revenue.
Demand for game-console parts — it supplies Microsoft Corp and Sony Group Corp with custom chips — helped boost sales for AMD’s gaming division by 14 percent.
AMD warned last month that its third-quarter performance would fall short of projections, and other chipmakers — including Intel and Nvidia — have provided gloomy outlooks for the industry. Facing a shaky economy and soaring inflation, consumers and corporations have turned away from buying computers.
Against that backdrop, AMD’s numbers were a bit better than expected. Profit was US$0.67 per share in the period, excluding some items. Analysts had estimated US$0.65.
Investors have been seeking signs of whether the steep PC decline will continue — and take the market back to pre-COVID-19 depths — or settle at the higher level. A rebound to the heights of the early COVID-19 pandemic is now looking increasingly unlikely.
Su said that the company is assuming that the PC market will decline about 10 percent next year.
Under Su, AMD had proven less susceptible to market fluctuations because it has taken share from larger rival Intel with new products.
However, in the third quarter, Intel said it took back share in PCs.
Su said that AMD had decided to not match some of the price cuts offered by its competitor.
Her biggest coup has been the breakthrough in the profitable market for processors that run server machines. In that area, AMD has gone from a share of less than 1 percent to a double-digit percentage.
Intel CEO Pat Gelsinger last week said he expects tough competition in servers to continue.
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