(Bloomberg) — Advanced Micro Devices Inc., the second-largest maker of computer microprocessors, gave a better-than-expected first-quarter sales forecast due to profits from the PC market. The lucrative owner helped offset the drop in demand for PC chips.
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Revenue will amount to $5.6 billion for the period, AMD said in a statement Tuesday, compared with analysts’ median forecast of $5.56 billion – with low estimates. at least 5 billion dollars.
The forecast highlights the gains the company has made over its larger computer processor rival, Intel Corp., and has helped AMD gain points in late trade. Stocks rose 3.7% to close in New York, having rallied as much as 4.6% following the announcement.
AMD has beaten Intel in the market with more powerful chips for machines that run the corporate network and serve as the backbone for cloud data centers. That allows it to capture market share in a market where spending grows higher than the PC industry.
“As we head into 2023, we expect the overall demand environment to remain mixed — with the second half stronger than the first half,” CEO Lisa Su said in a statement. conference call. Su said she expects the data center business to continue to win, driving further growth this year.
AMD’s data center business posted a 42% increase in sales from a year earlier, to $1.7 billion in revenue. Revenue at the customer division, the PC chip unit, fell 51% to $903 million.
Meanwhile, Intel saw total sales drop 32% last quarter. Revenue for the company’s data center and artificial intelligence business fell 33%.
After two years of struggling to meet demand, chipmakers are now facing one of the industry’s recurring gluts. Manufacturers of components for computers and smartphones were among the hardest hit, with sales and profits plummeting.
Under Su, AMD has become one of the biggest gainers in the chip industry. And with the company continuing to capture market share, it hasn’t been affected as much as larger rivals like Intel.
AMD sees the PC market shrinking to about 260 million units this year, down from 290 million units in 2022. The company has shipped fewer chips as its customers reduce inventory, she said. Su predicts that the first quarter will be the bottom of that division in her company.
For the fourth quarter, profit was 69 cents a share, excluding some items. Revenue rose 16% to $5.6 billion. Analysts had predicted earnings of 67 cents and revenue of $5.52 billion.
While the drop was less severe than expected, the outlook suggests the company’s first quarterly sales drop since 2019, ending a string of growth that has propelled AMD to the top of the industry. chip industry.
(Updated with chart after seventh paragraph.)
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