Big slump in PC market slump deepens, hurts AMD revenue By Reuters

By Chavi Mehta and Jane Lanhee Lee

(Reuters) -A worse than expected global PC market continues to pummel chipmakers with Advanced Micro Devices (NASDAQ:) on Tuesday forecasting fourth-quarter and full-year revenue below Wall Street estimates.

Shares of the company fell 3% in trading after the bell, but quickly recovered, rising 2.2%.

While AMD is not immune from the PC downturn, Anshel Sag, chip analyst at Moor Insights & Strategy, said AMD’s data center numbers and excitement over a new graphics chip launch later this week was helping sentiment.

AMD, which makes CPUs and graphics processors for PCs and the data center has been hit hard as inflation hurt consumer demand for laptops and other gadgets, prompting electronics makers to cut orders for its chips.

That led AMD to lower its forecast for third-quarter revenue by about $1 billion last month.

According to Counterpoint Research, PC shipments will decline 13% this year. They fell 19.5% in the third quarter, according to research firm Gartner (NYSE:).

“Third quarter results came in below our expectations due to the softening PC market and substantial inventory reduction actions across the PC supply chain,” said AMD Chair and CEO Dr. Lisa Su, adding that the data center, gaming console, and so-called embedded market helped support growth.

The company expects current-quarter revenue to be $5.5 billion, plus or minus $300 million. Analysts on average expect revenue to be $5.85 billion, according to Refinitiv data.

For the full year 2022, AMD expects revenue to be approximately $23.5 billion, plus or minus $300 million, up 43% from 2021, versus analyst expectations of $23.9 billion.

Revenue at its client segment, which includes chips for desktops, fell 40% to $1 billion during the third quarter. While its Data Center revenue was $1.6 billion, up 45% year-on-year.