AMD Posts First Loss in Years as Consumer Chip Sales Plummet by 65%

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"Furthermore, AMD plans to formally introduce its EPYC 'Bergamo' CPUs for cloud data centers and EPYC 'Genoa-X' for high-performance technical computing applications. While ramps of server CPUs tend to be slow, these parts will still allow AMD to increase its sales of data center hardware slightly.

"For the second quarter, we expect sequential growth in our Data Center and Client segments offset by modest declines in our Gaming and Embedded segments," said AMD's chief financial officer. "We remain confident in our growth in the second half of the year as the PC and server markets strengthen and our new products ramp."

Meanwhile, AMD remains optimistic about strong demand for its products in the second half and beyond. For example, the firm expects its data center sales to beat 2022 this year.

"Looking longer term, we have significant growth opportunities ahead based on successfully delivering our roadmaps and executing our strategic datacenter and embedded property have priorities led by accelerating adoption of our AI products," Su said."

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Source: https://www.tomshardware.com/news/amd-posts-first-loss-in-years-in-q1-2023
 
GoldenTiger said:
The economy sucks and demand dropped post pandemic? Who'd have guessed?!
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Any sane person could have seen this coming. If anyone thought that Nvidia was posting losses from previous years was because of their pricing structure, then they haven't been paying attention to the rest of the economy in general. The only companies posting record profits are grocery stores and such, because they have gouged prices to unimanigable levels and people have to eat.
 
ZeroBarrier said:
Any sane person could have seen this coming. If anyone thought that Nvidia was posting losses from previous years was because of their pricing structure, then they haven't been paying attention to the rest of the economy in general. The only companies posting record profits are grocery stores and such, because they have gouged prices to unimanigable levels and people have to eat.
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(mind blown) It's not just Nvidia?! /s
 
The Xilinx-AI-Embedded sector exploded by 163% is quite something, made it look almost like something that was classed as client became embedded.

Wonder if 35%-40% is the natural work from home boost of the pandemic make the current time a specially low on demand + the fact that it hided the PC decline post 2010 that just in reality did continue and the rest post crypto, this is comparing with Q1 2022.

CPU sales (and Intel) was down around 36% I think, CPU client was down 38% for intel vs Q1 2022.

GPU decline could be a bit more strong and maybe the AIB rebate on RDNA 2 is in part financed via AMD rebate.
 
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Overall not a bad report, could have been far worse. Will see where the economy wants to go from here, but I expect AMD is right that things will remain flat for them for now.
 
First loss of what? Revenue?

Who cares, not unexpected after the rush of the pandemic, gross margin is still high at 50%. Profit isn’t even shown but I am sure it’s still very positive.

And I don’t even like AMD, but this is a nothing burger.
 
Krenum said:
Oh, plenty of people would and have guessed.

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No they wouldn't. This is happening because Reagan allowed for stock buy back which brought back the demon that was the stock market. Then before 2008 happened, the Fed lowered the interest rates and of course people went nuts and bought houses for double or triple their original value. Before 2008 happened people lost their jobs which caused unemployment to rise to 10% and then people couldn't afford to pay for the overpriced homes they bought. So the Fed during Obama's administration lowered interest rates to zero because we hate deflation, and kept it at 0% since. Now that we're finally raising interest rates the banks are collapsing again, because they lived of that 0%. I'm sure it's Biden's fault for decades worth of greedy mistakes made by multiple presidents.

Anyway, I hope AMD realizes that they need to lower prices and put more VRAM on their GPU's because crypto is dead and nobody is over paying for that hardware anymore. They can continue to be 10% of the market or do the right thing and push inventory by lowering prices. CPU, motherboards, and GPU's because this stuff won't sell well for years so better start grabbing that market share while they can.
 
DukenukemX said:
Anyway, I hope AMD realizes that they need to lower prices and put more VRAM on their GPU's because crypto is dead and nobody is over paying for that hardware anymore. They can continue to be 10% of the market or do the right thing and push inventory by lowering prices. CPU, motherboards, and GPU's because this stuff won't sell well for years so better start grabbing that market share while they can.
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Looking at the text, GPU seem to not be in the client segment but gaming which is doing perfectly fine.

https://www.census.gov/retail/marts/www/marts_current.pdf
Online shopping
February 2023: 102,710
February 2022: 93,924

Unemployment
https://www.bls.gov/news.release/pdf/empsit.pdf

Participation rate are a bit higher than in 2022, unemployement are a bit lower.

What does people pointing to the economy are basing this on ? (that it suck, that demand dropped, etc... ) ?
 
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Zarathustra[H] said:
How are revenues flat and operating incomes down? Did they sell off something that I missed to boost revenues?
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AMD has multiple division. The consumer CPU division is bleeding red now.

But surprisingly the gpu division (including PS5, Xbox, Steam deck?) is still profitable

& embedded (xilinx) made up for a lot of other stuff

Going forward Amd expects cpu to recover but gpu to decline steadily
 
LukeTbk said:
Looking at the text, GPU seem to not be in the client segment but gaming which is doing perfectly fine.
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People are still buying GPU's, just not at the record breaking profit levels like in 2021 when crypto mattered. AMD like Nvidia has a lot of inventory, but AMD was fine with 10% market share because they were selling GPU's with a hell of a mark up. Now AMD has to fight Nvidia for market share, like a good capitalist corporation. They like everyone else doesn't want to lower prices, but they have to.
Participation rate are a bit higher than in 2022, unemployement are a bit lower.

What does people pointing to the economy are basing this on ? (that it suck, that demand dropped, etc... ) ?
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Everyone keeps raising prices and people aren't making much more money than before. All the things that shouldn't grow, do grow, like crypto. Bitcoin is sitting at $29k, and like why? The things that should grow, aren't, like the stock makret. Banks are failing everywhere, and will continue to do. Auto loan crisis, housing crisis. Companies are laying off people in the hundreds and sometimes thousands. The only reason it doesn't seem like a recession is because everything is on the edge right now. Unemployment values are lagging because of how the government measures unemployment. People who should lose their homes that they overpaid for, aren't because they still have savings in their accounts. Just a matter of time before all this comes crashing down. So nobody should expect sales from anywhere in the market to do well for a long time.
 
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Strange title - they made a billion this quarter in a declining market, with client segment being the only one posting a loss.

Pretty reasonable results, the question is when will they be ready to cut the margin in order to increase revenue, plenty of scope if this is the decision eventually.
 
UnknownSouljer said:
Nothing to see here and also nothing to worry about (even if you're a fan). The whole market is down. AMD is still in a very strong position in general.
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Yup. Zen2/3 (3 especially) has little reason to upgrade, and the GPU smash-and-grab is done.
OnceSetThisCannotChange said:
Strange title - they made a billion this quarter in a declining market, with client segment being the only one posting a loss.

Pretty reasonable results, the question is when will they be ready to cut the margin in order to increase revenue, plenty of scope if this is the decision eventually.
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That's gross margin - not net or per product. Would have to dig into the 10k to get more detail as to how much they ~could~ drop margin. Or if they care to.
 
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OnceSetThisCannotChange said:
Strange title - they made a billion this quarter in a declining market, with client segment being the only one posting a loss.
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Seem to depends on the accounting used, GAAP accounting give them a lost
https://www.amd.com/en/newsroom/pre...rts-first-quarter-2023-financial-results.html
Operating income (loss) ($M)$(145)
Net income (loss) ($M)$(139)


Down from 951 and 786 millions the quarter of the year before.

DukenukemX said:
Everyone keeps raising prices
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Which seem to have true if not truer in Q1 2022, I am not sure people are comparing with a clear 3 months of the very recents past when comparing the financial result of a company between them and january-march of 2023, but some floating general past.

DukenukemX said:
Bitcoin is sitting at $29k, and like why?
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It closed Q1 2022 at $45.5k, what does that tell us ? Yes, GPU sales are hurting because of crypto for sure (i.e. that certains), consoles sales were good maybe just because they were more possible to buy.

DukenukemX said:
The things that should grow, aren't, like the stock makret.
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S&P 500 opened Q1 at 3,853.29 and closed it at 4,110.75, that was an unsustainable fast grow (around 29% a year would it continue)
DukenukemX said:
Unemployment values are lagging because of how the government measures unemployment
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We are comparing with 2022 numbers here.

Ford just announced 20% higher revenues versus Q1 2022, we would not use that as a general claim about the overall economy, rapidly talk about the specific of the car industry issues of the time versus now
 
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We all know the bull trap is ending guys, get ready for S&P @ 1800-2200 in a year.
 
This is just the beginning. Watch what happens when China invades Taiwan.
 
Wow they lost massive market share to Intel. My opinion: AM5 has been a disaster because of the DDR5 cost premium.
 
DukenukemX said:
People are still buying GPU's, just not at the record breaking profit levels like in 2021 when crypto mattered. AMD like Nvidia has a lot of inventory, but AMD was fine with 10% market share because they were selling GPU's with a hell of a mark up. Now AMD has to fight Nvidia for market share, like a good capitalist corporation. They like everyone else doesn't want to lower prices, but they have to.

Everyone keeps raising prices and people aren't making much more money than before. All the things that shouldn't grow, do grow, like crypto. Bitcoin is sitting at $29k, and like why? The things that should grow, aren't, like the stock makret. Banks are failing everywhere, and will continue to do. Auto loan crisis, housing crisis. Companies are laying off people in the hundreds and sometimes thousands. The only reason it doesn't seem like a recession is because everything is on the edge right now. Unemployment values are lagging because of how the government measures unemployment. People who should lose their homes that they overpaid for, aren't because they still have savings in their accounts. Just a matter of time before all this comes crashing down. So nobody should expect sales from anywhere in the market to do well for a long time.
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Good summary...


Everything is sitting on some thin ice... then asshole over here is putting a blow torch on it... but another asshole over here is blowing cold wind on it..
Eventually the asshole with the torch is going to break through enough where the thin ice will crack..

It's about to get real ugly, soon. ( I know people keep saying this.. but .... yeah.. it's coming lol )
 
Marees said:
AMD has multiple division. The consumer CPU division is bleeding red now.

But surprisingly the gpu division (including PS5, Xbox, Steam deck?) is still profitable

& embedded (xilinx) made up for a lot of other stuff

Going forward Amd expects cpu to recover but gpu to decline steadily
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This is true, and I am NOT an accountant or particularly familiar with the GAAP, but these other divisions operational income would be rolled up to the top level operational income as well, along with CPU/GPU operational income.

The only way you have a drastic decline of operational income while at the same time having a flat overall revenue is if something non-operationalade up for it. This could be something like sale of a facility, or something like that.
 
Luke M said:
Wow they lost massive market share to Intel. My opinion: AM5 has been a disaster because of the DDR5 cost premium.
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I think it was a mistake for AMD to not include optional DDR4 compatibility during the transition like Intel did, but this will be a short term problem.

Eventually DDR4 will significantly hold back performance, so a transition to DDR5 will become necessary, and DDR5 is already coming down in price (and running cooler) as it gets produced on newer process nodes.
 
ZeroBarrier said:
Any sane person could have seen this coming. If anyone thought that Nvidia was posting losses from previous years was because of their pricing structure, then they haven't been paying attention to the rest of the economy in general. The only companies posting record profits are grocery stores and such, because they have gouged prices to unimaginable levels and people have to eat.
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Kroger is publicly traded. Their financials are public. Their profit margin before tax is less than 2%. They aren't posting record profits, they are posting record revenues. Revenues are not profits, and profit margins in the grocery business are very slim. They must raise prices in line with their increase in costs or they'd lose money & go bankrupt.
 
EmerilLIVE said:
Kroger is publicly traded. Their financials are public. Their profit margin before tax is less than 2%. They aren't posting record profits, they are posting record revenues. Revenues are not profits, and profit margins in the grocery business are very slim. They must raise prices in line with their increase in costs or they'd lose money & go bankrupt.
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My apologies, what I meant to say is food companies. My point still stands.
 
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