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AMD Gives Cloudy Forecast, As PC Demand Stalls

Shares in Advanced Micro Devices fell more than 5 per cent after the chip maker gave a lacklustre sales forecast for the current quarter.

Revenue for the September quarter is tipped to be A$9.7 billion, shy of Wall Street estimates of A$9.85 billion. AMD indicated that the market share it has captured from rival Intel won’t be enough to counter the decline in PC demand. AMD is the second largest PC processor manufacturer in the world.

This follows eight straight quarters of record revenue, which CEO Lisa Su credited at the time to “our strong execution and expanded product portfolio.”

While she forecast “continued growth” during the Q2 earnings presentation, she said yesterday, on a call to analysts that the decline in the PC business was sharper than first expected.

“We are being more conservative in our PC guidance,” she said. “We continue to see strong demand in the data canter, in our embedded business, in game consoles.”

AMD expects PC shipments to drop in the high-single-digit percentage range this year.

Intel also downgraded its third-quarter projections, after its PC-chip unit saw sales plummet 25 per cent to A$11 billion.

Intel CEO Pat Gelsinger said revenue this year will be as much as A$15.7 billion less than projected.

“We are planning for volatility as the world adjusts to the end of a 2-plus-year pandemic and the unprecedented stimulus governments used to fight it,” Gelsinger told Intel shareholders late last week.

“Across the economy, supply chain issues have both limited the ability to meet demand in some areas and driven inventory well above normal levels in others.

“We are prepared to manage through a slowdown typical of the normal cycles the semiconductor industry has experienced over the last 50 years. While the depth and duration are still difficult to predict, we have a proven track record of being able to adjust and succeed in any environment.”



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