AMD Trims Q3 Forecast, $1 Billion Missing, Client Processor Revenue down 40%, Halved Quarter-over-Quarter

[the54thvoid]

The PC component industry is out of touch with its user base. That's the problem. Specifically though, I see it as a GPU manufacturing problem. PSU, RAM, Storage options; these items, arguably, have far longer lifespans. But with GPU's (I feel) we're being pushed to upgrade, and companies are inventing/creating new gimmicks to justify their new, expensive products. Yeah, I mean Nvidia.

They'll need to readjust expectations. And we as consumers ought to vote with our wallets. Hypocrisy from a 2080ti owner, I know, but that was my one extravagant splurge.

 

[Wirko]

How many members of the working class can say, hey, I thought my boss would give me a 55% pay raise, now it looks it will be more like 29%, I'm officially dead now!

 

[Lovec1990]

I agree companys still hope people gonna be buying like they did in mining crazy and that power usage does not matter, yet reality is mining is nearly dead,market is flooded with used GPUs and now in EU electricity,heating and food prices are rising.

So IMO we should wait a few months so companys start realising their PC parts are not selling well enough so they will need to adjust prices.

 

[R0H1T]

They're rising everywhere tbh but EU is especially hit hard because its literally a battleground, well it's periphery is any way.

As for waiting for a few months I fear this could drag us down to somewhere closer to the 2008 crisis, except in the broader economy! The people in managerial positions & executives simply do not care for their lowest paid employees & I know from experience how bad the greed is at every (higher) level

If you're saving yourselves from the GPU robbery, the energy bandits will probably get you & if you survive that then surely the loan sharks! Unless the people in power start relinquishing that & give more back to the society things will only get worse, the issue is many of us don't have time to really fight them because we're busy feeding our families.

And the chances of that are exactly zero!

 

[Bwaze]

I've been saying the writing is on the wall for the PC industry for a while. These latest product launches from Nvidia, AMD and Intel driven by their respective CEO's gold fever from the cryto boom, now finally crashing with the reality that the world doesn't want $5k gaming builds, they want to be able to pay their gas and their rent. This is just the beginning. I expect no less than 20% price cut accross the board for all of their products by the end of the year.

Truth be told, this fall in quarter was expected - both CPU and GPU were right before generational change, worst time to sell. The reall fall of revenue will come in the next quarter.

20% price cut won't do much when just the motherboards went up 50%, DDR5 is more expensive than 4 for not much real world gain, power consumption is off the roof - new PSU, higher power bill - lots of people will decide against the upgrade this fall and winter. Because yes, they will invest in other fun things like electricity, heating, food.

 

[mb194dc]

I've been saying the writing is on the wall for the PC industry for a while. These latest product launches from Nvidia, AMD and Intel driven by their respective CEO's gold fever from the cryto boom, now finally crashing with the reality that the world doesn't want $5k gaming builds, they want to be able to pay their gas and their rent. This is just the beginning. I expect no less than 20% price cut accross the board for all of their products by the end of the year.

Agree, a lot of the issue is that any reasonable CPU from the last 5+ years is enough for 95% of users.

Last gen graphics cards good enough for 4k.

Simply no point to buy latest gen stuff except for vanity or got money to burn.

 

[Bones]

The PC component industry is out of touch with its user base. That's the problem. Specifically though, I see it as a GPU manufacturing problem. PSU, RAM, Storage options; these items, arguably, have far longer lifespans. But with GPU's (I feel) we're being pushed to upgrade, and companies are inventing/creating new gimmicks to justify their new, expensive products. Yeah, I mean Nvidia.

They'll need to readjust expectations. And we as consumers ought to vote with our wallets. Hypocrisy from a 2080ti owner, I know, but that was my one extravagant splurge.

I can't help but to agree - It's like the industry as a whole is out of step what what the market truly is these days and it's not just an AMD thing - They've all missed it to a degree.

With the surge in crapto during all the lockdowns, increases in online gaming services and so on, I guess they thought this new wave of demand for PC hardware would continue but it didn't.
Lockdowns are more or less over, crapto crashed and all that caused a drop in demand for PC hardware, esp for GPU's which were at that time insanely priced.

With the drop also came decreased profit margins of course and that's natural.

It make a take a couple of quarters for thing to readjust and level out but for now it's gonna be a bumpy ride for all of them, not just AMD themselves.

 

[JoniISkandar]

nah that the result when they thinking they are top marketshare leader and dont give F to low end market, since launch of ryzne 5000 they only release high end first but very very late low end product release

intel core F series is better in every way in sub 200$ budget

 

[nguyen]

The PC component industry is out of touch with its user base. That's the problem. Specifically though, I see it as a GPU manufacturing problem. PSU, RAM, Storage options; these items, arguably, have far longer lifespans. But with GPU's (I feel) we're being pushed to upgrade, and companies are inventing/creating new gimmicks to justify their new, expensive products. Yeah, I mean Nvidia.

They'll need to readjust expectations. And we as consumers ought to vote with our wallets. Hypocrisy from a 2080ti owner, I know, but that was my one extravagant splurge.

CPU, RAM, Storage, PSU are not improving at breakneck speed like GPU does. I don't see CPU getting 50% faster every 2 years....

Heck I would upgrade CPU+Mobo+RAM every 2 years too if they give me 50% more perf LOL

 

[R0H1T]

CPU's have progressed more than GPU's in the last 10 years. The fastest desktop CPU's topped out around 8 6 cores back then, it's 64 cores now & at least 10~20x faster in MT workloads.

 

[Valantar]

How many members of the working class can say, hey, I thought my boss would give me a 55% pay raise, now it looks it will be more like 29%, I'm officially dead now!

Very much this. The conceptions of growth that the business world runs on are so inherently toxic and self-defeating that it would be hilarious if the people believing in these things didn't control the livelihoods of pretty much everyone on earth.

 

[Chrispy_]

My biggest gripe with AMD in the last year is that when manufacturing returned closer to post-pandemic normals, supply and availability of Navi21 was still practically non-existent. Prices for 6800/6800XT/6900XT were often ABOVE the supposedly-overpriced and still-scalped Nvidia equivalents in UK, Germany, and France.

Since the MSRPs were supposed to be lower than Nvidia and RX6000-series weren't as good for ETH mining as Ampere or RDNA1 cards, I'm wondering - where were the highest-margin, most profitable cards?! The miners weren't particularly interested in them to the same scale as Nvidia, and I didn't see them snag many OEM wins either. High prices of the few cards on shelves implies a scarcity, because if there was new stock that was queueing up in inventory, prices would have been reduced to clear shelf space.

For AMD to make record profits, they have to have products on shelves that people can buy without feeling scalped. For the last two years, that hasn't really happened for Navi21, even when other AMD cards and the entire Nvidia range have returned to near-MSRP.

 

[R0H1T]

AMD's making pretty much all of their major products on 7nm TSMC & their CPU's have the highest margins, this is why even at crypto peak they weren't producing as many GPU's as they did in the past. This was likely strategic & the right choice, of course by not announcing (realistic) MSRP for many of their cards they were also aping Nvidia, destroying a lot of goodwill the PC community had towards them!

 

[pressing on]

Maybe there will be major price cut of AM4 and AM5 in the coming months. That would be awesome

I note that part of the statement by AMD is " The gross margin shortfall to expectations was primarily due to lower revenue driven by lower Client processor unit shipments and average selling price (ASP)." Bearing in mind the prices what Zen 3 CPUs are going for in most markets nowadays ASP is an issue. There's no doubt that AMD is selling Zen 3 in volume but profit margins on fire sale type prices are maybe questionable. Reducing prices further will not improve that. It's the same with AM5. Most retailers are reporting sluggish early sales but high motherboard prices are an issue. The appearance of cheaper motherboards should help boost sales, particularly the B650s.

Intel will be reporting their Q3 numbers on the 27 October and they have already indicated that they are seeing a similar impact for the same reasons.

 

[R0H1T]

AMD will be moving a lot of their product lines to 6nm, their margins could expand due to that but they'll have to lower prices even further. For all the hoopla around their mobile chips I've seen the 6xxx being priced consistently above Intel's 11th gen here & that should not happen!

Not sure if it's an OEM decision or AMD's but they should be more price competitive than that & where the heck are 6 core zen3+ mobile chips?

 

[wolf]

Do you honestly believe somehow nvidia or intel will report revenues above targets?

You're undermining the message if you think it's just relegated to AMD

Not at all, of course it's not just limited to AMD, that's my point, and I never said it was.

 

[Tek-Check]

Even AMD cannot move all chillets to server. There has been saturation and upgrade fatigue in DIY PC market.

Large upgrades from Covid times and sky-rocket prices of new products will make it challenging not only for AMD, bot for all of them together.

PC market has shrank 15-20%, so AMD's numbers are not surprising at all. It will be similar from Nvidia, Intel, ARM and others.

 

[mechtech]

meh

Just like every other tech company

Working from home over and covid pricing coming to an end

Still made way more profit than pre-covid. This is just things starting to return to per-pandemic normalcy.

"$160 million of charges primarily for inventory, pricing, and related reserves in the graphics and client businesses"

Impossible...........we were told was nothing in stock anywhere on planet

 

[Darmok N Jalad]

I think it’s going to be a rough time for this industry with the way things are designed. All the high-end stuff is very complex and requires advanced cooling and lots of power. Intel and NVIDIA aren’t going to be in much different of a spot. Intel is launching its first GPU at the worst possible time, and is priced accordingly.

I’m curious how Apple is going to do. They went the other direction with power consumption on their desktop, which should make for higher margins, and the iPhone 14 pro is doing really well.

 

[Testsubject01]

meh

Just like every other tech company

Working from from over and covid pricing coming to an end

Still made way more profit than pre-covid. This is just things starting to return to per-pandemic normalcy.

"$160 million of charges primarily for inventory, pricing, and related reserves in the graphics and client businesses"

Impossible...........we were told was nothing in stock anywhere on planet

Same thought seeing the press release, there was no way there wouldn't be a dip after shortages/pandemic easing off, add to that ever-increasing effects of climate change and “Superpowers” looking to expand a bit more “aggressively”.
This unsustainable growth (aka corporate greed) can't be upheld, most of the big players still do very well, just not 3-5 times YoY for the foreseeable future. Fun part, it most likely will kick a recession to a full depression in many places.

 

[bonehead123]

make some, lose some...

surge & purge....

What goes around comes around (and usually bites you in the arse on the return trip !)....

Forget but never forgive......

this is how the market works, Capitalism 101 at it's finest

HOWEVER, all the companies that became soooo accustomed overpricing everything during the pandemic at outrageous scapler's prices are now feeling the pain of those decisions....

Pain, when used properly, a wonderful motivator, it is !

 

[thegnome]

No wonder with the shortage basically gone, and the new stuff being overpriced. AM5 sales numbers are very low from what I have seen...

 

[GunShot]

Why are you we talking about market caps though? It's irrelevant when talking of revenues or potential (future) earnings.


Their GPU division was relatively stable, check the gaming section!

Uhm... Did you miss the headlines?!

Those "potential" numbers will be missed... by a lot, so, you're are incredible wrong here. And the bleeding is just getting started for AMD! Oh, BTW, all metrics matters when a company is being evaluated.

Yes, because we know that people tend to invest based on the performance of the company and are totally not gambling based on hype... Such a good measurement of performance.

Well... it was "Outstanding" for all the companies that benefitted - I am sure nVidia would have said the same, no? If she was asked "How are customers doing?" I am sure her answer would have been different.

"Well, there is a happy ending after all, and Su is now concerned." What is she concerned about?

"Reap what you sow" - dude what is your problem?! What is she sowing? I think AMD is doing well under leadership or I am missing something?

I'm still waiting for this... uhm... "Dr" to innovate something under her vision (not projects that were in development for years and she just took over it). And none of that shilling statement matters. AMD numbers and forecast still has plummetted. Unless you can change that *factual* data, everything else is just gibberish.

 

[Valantar]

I'm still waiting for this... uhm... "Dr" to innovate something under her vision (not projects that were in development for years and she just took over it).

What, like RDNA, RDNA2, Zen2, Zen3, Zen4? Also, since when do C-level executives "innovate"? I thought they were supposed to lead the company?

Is it actually difficult for you to grasp the simple fact that stock markets are organized gambling rings for the wealthy, and that any link between stock valuations, market cap and other stock-based metrics and the actual real-world value of the company is very tenuous at best?

 

[GunShot]

What, like RDNA, RDNA2, Zen2, Zen3, Zen4? Also, since when do C-level executives "innovate"? I thought they were supposed to lead the company?

Is it actually difficult for you to grasp the simple fact that stock markets are organized gambling rings for the wealthy, and that any link between stock valuations, market cap and other stock-based metrics and the actual real-world value of the company is very tenuous at best?

"Projects" that were under development before she became CEO.

Nice try. NOT!