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Mixed results for AMD

by on01 February 2023

Things are slowing down when they should be Ryzen

AMD posted some mixed results, which show a slowing down at the end of the year.

According to its figures, AMD posted record revenue for the entire year, while sales of consumer CPUs and GPUs declined significantly in the fourth quarter.

AMD's fourth quarter 2022 revenue totalled $5.6 billion, up 16 per cent year-over-year and flat with the fourth quarter of 2022. However, its net income fell to $21 million, 98 per cent lower than in the same period a year ago. AMD's gross margin dropped to 43 per cent from 50 per cent in the fourth quarter of 2021.

AMD earned $23.601 billion in 2022, which was a 44 per cent increase from $16.434 billion in 2021. This was the highest yearly result that AMD has ever posted, yet it could have been higher if it had not been for that pesky fourth quarter which saw demand for consumer processors and graphics cards slump

AMD Chair and CEO Dr Lisa Su said that 2022 was a strong year for AMD as we delivered best-in-class growth and record revenue despite the weak PC environment in the year's second half.

"We accelerated our data centre momentum and closed our strategic acquisition of Xilinx, significantly diversifying our business and strengthening our financial model. Although the demand environment is mixed, we are confident in gaining market share in 2023 and delivering long-term growth based on our differentiated product portfolio."

Because of softening PC market, the year 2022 was a mixed bag for AMD since the demand for its products met expectations in the first half, but demand for consumer PC hardware dropped sharply in the second half, affecting the full-year results.

A few years ago, the downturn in consumer CPUs and chipsets would have been a disaster for AMD, but this time it was not due to AMD's booming server sales. However, things should have been better as the company introduced its brand-new Ryzen 7000-series processors. The average selling prices of its CPUs were flat year-over-year, suggesting tepid sales of the latest parts.

AMD's Gaming Business earned $1.6 billion in revenue (down seven per cent year-over-year) and $266 million in profits (down from $407 million in Q4 2021). However, this strong result was achieved because AMD managed to flog loads of system-on-chips for consoles, whereas the sales of its graphics processors for discrete desktop PC GPUs were down year-over-year.

AMD's Datacenter Business was the main source of income for the company in Q4 2022, outstripping the Gaming and Embedded businesses. Despite lower margins (27 per cent in the fourth quarter of 2022 vs 32 per cent in Q2 2022), the group's operating income totalled $444 million, up from $369 million in the same period a year before.

AMD's Embedded Business — which mostly sells products designed by Xilinx and some chips designed by AMD — posted earnings of $1.4 billion and earned $699 million in profits, marking another bright spot in AMD's financial report.
AMD expects its first-quarter revenue to be approximately $5.3 billion (±$300 million), a decline of about 10 per cent year-on-year because of lower consumer CPU and gaming GPU and SoCs sales. The company expects shipments of its data centre solutions, such as EPYC CPUs and Pensando DPUs, FPGAs, and embedded products, to continue increasing.

amd q4fyresults


Last modified on 01 February 2023
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