Lisa Su, president and chief govt officer of Advanced Micro Devices Inc. (AMD).
Bridget Bennett | Bloomberg | Getty Images
AMD and Intel are fierce opponents in a troublesome marketplace for chips, however one has a a lot brighter short-term outlook than the opposite. While Intel is anticipating declines throughout the board, AMD’s information middle enterprise is rising with the introduction of a brand new chip, and its pandemic-era acquisition of specialty chip-maker Xilinx can be contributing development.
On Tuesday, AMD mentioned it anticipated $5.3 billion in gross sales within the March quarter, which might be a ten% year-over-year decline in gross sales.
That’s not a rosy outlook, but it surely’s a lot stronger than Intel’s information for the March quarter. Last week, Intel mentioned it anticipated about $11 billion in gross sales, which might be a 40% year-over-year decline.
Neither chipmaker gave full-year steerage, citing financial uncertainty. “We want to be cautious obviously heading into the year just given the macro environment,” AMD CEO Lisa Su advised analysts on the corporate’s earnings name.
But the inventory market is reflecting how the 2 corporations are diverging.
After Intel’s report final week, it fell over 7% in prolonged buying and selling. AMD rose below 2% after its earnings report on Tuesday.
Both corporations are dealing with a hunch in PC market, after two years of elevated gross sales throughout the Covid pandemic, as individuals purchased new computer systems to work or go to highschool from dwelling.
AMD’s PC chip group income declined 51% on a year-over-year foundation within the fourth quarter. Intel’s declined 36%, however from a bigger base. Overall, AMD CEO Lisa Su mentioned on Tuesday that it expects the overall PC market to be down 10% in 2023, however mentioned that AMD truly gained market share within the fourth quarter.
“It’s fair to say that we believe given where we are with the client inventory levels, the first half will certainly be lower. We expect some improvement in the second half,” Su mentioned.
The corporations diverge extra dramatically in terms of information middle chips.
Sales for Intel’s datacenter group fell 33% from the earlier 12 months to $4.3 billion, partially due to a late launch of its newest server chip household, Sapphire Rapids.
AMD’s information middle enterprise is rising strongly, nonetheless, up 42% on an annual foundation to $1.7 billion. AMD launched its newest information middle chips, the fourth-generation Epyc processors, in November. AMD expects its information middle enterprise to develop this 12 months whereas PC chips and graphics processors for gaming decline.
AMD’s information middle enterprise faces powerful macroeconomic situations too, however on Tuesday, Su signaled to traders that its positive factors would come at Intel’s expense.
“In our Embedded and Data Center segments, we believe we are well positioned to grow revenue and gain share in 2023 based on the strength of our competitive positioning and leadership,” Su mentioned.
AMD additionally had success with its 2020 acquisition of Xilinx, which it purchased for $35 billion. Xilinx, which makes processors that carry out specialised duties like encryption or video compression, was the principle contributor to $1.4 billion in gross sales for AMD’s embedded division, an annual enhance of 1,868%, in response to the corporate.
Source: www.cnbc.com”