AMD encounters PC industry winter, first quarterly loss

According to news on May 22, due to continued weak chip demand in the PC industry, the world's leading semiconductor company AMD (Advanced Micro Devices) posted its first quarterly loss in years. According to data released by AMD, as of the first quarter of 2023, the company had a revenue of US$5.4 billion, a gross profit margin of 44%, an operating loss of US$145 million, a net loss of US$139 million, and a diluted loss per share of 0.09 Dollar. According to non-GAAP calculations, its gross profit margin was 50%, operating income was US$1.1 billion, net income was US$970 million, and diluted earnings per share were US$0.60.

The PC industry has fallen into a cold winter, bringing challenges

According to IDC data, starting from 2022, the global PC industry has gradually fallen into a cold winter. In the first quarter of 2022, shipments of traditional PCs, including desktops, notebooks, and workstations, fell 5.1% year-on-year to only 80.5 million units; shipments in the second quarter fell 15.3% year-on-year to 71.3 million units. Taiwan; in the third quarter, it fell 15% to 74.2 million units; in the fourth quarter, it dropped 28.1% to only 67.2 million units. By the end of the first quarter of 2023, global PC shipments dropped an astonishing 29% year-on-year to only 56.9 million units. Relevant chip supply companies such as AMD and Intel have been directly affected by the decline in PC shipments.

Main performance data analysis

AMD’s business is mainly divided into four parts: data center, customer, game and embedded.

In terms of data centers, AMD’s revenue in the first quarter of 2023 was US$1.295 billion, with profits of US$148 million, a year-on-year decrease of 65%.

In terms of customers, AMD’s revenue in the first quarter of 2023 was US$739 million, a year-on-year decrease of 65%, and a loss of US$172 million.

In terms of gaming, AMD’s revenue in the first quarter of 2023 was US$1.757 billion, a year-on-year decrease of 6%, and its profit was US$314 million, a year-on-year decrease of 12%.

In terms of embedded technology, AMD’s revenue in the first quarter of 2023 was US$1.562 billion, a staggering 163% year-on-year increase, and its profit increased by 188% year-on-year to US$798 million.

According to ITBEAR Technology Information, the data center business has always been AMD's main pillar. However, due to factors such as extended equipment update cycles and price reductions by many manufacturers, AMD's data center business revenue and profits have declined. AMD's PC business has been losing money for several consecutive quarters, as it has been impacted by the cold winter of the PC industry. However, the gaming business is supported to a certain extent by semi-customized business customers such as Sony PlayStation and Microsoft Xbox, as well as stable profits from its own graphics card products. In terms of embedded business, AMD acquired Xilinx, which enabled its embedded business to achieve record revenue in the first quarter of 2022. Xilinx has always brought huge profits to AMD.

Other performance highlights

In addition to the above main business data, AMD also has some eye-catching performance highlights:

First of all, some Major cloud service providers, such as Microsoft Azure, Google Cloud and Oracle Cloud Infrastructure, have announced new features based on AMD EPYC processors.

AMD has begun supplying its embedded 5000 series products - AMD Ryzen™ (Ruilong). This series of processors are manufactured using 7-nanometer technology, and the planned production and delivery period is five years.

In addition, AMD also launched AMD based on the "Zen 4" 5-nanometer core EPYC™ embedded 9004 series processors are suitable for embedded system OEMs to expand their product portfolios through various performance and pricing options.

AMD has also established a telecommunications solution testing laboratory to support verification of the feasibility of end-to-end solutions based on AMD.

AMD also signed a multi-year extended licensing agreement with Samsung to bring AMD Radeon graphics solutions to Samsung’s Exynos SoC expanded product portfolio.

In addition, AMD has also launched Ryzen Z1 and Ryzen Z1 Extreme processors customized for gaming handheld consoles, and launched a variety of laptops equipped with Ryzen 7000 series CPUs.

In addition, AMD also launched the AMD Radeon PRO W7000 series graphics cards, the first professional graphics cards based on advanced AMD small chip design, with unique features and leading performance.

To sum up, although AMD faces certain pressures under the challenges of weak chip demand in the PC industry and losses in the PC business, its data center, gaming and embedded businesses and other highlight projects still bring it A certain amount of revenue and profits have been achieved, providing support for the company's future development.

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