Lisa Su, president and chief government officer of Advanced Micro Devices Inc. (AMD).
Bridget Bennett | Bloomberg | Getty Images
AMD and Intel are fierce rivals in a tough marketplace for chips, however one has a much brighter short-term outlook than the different. 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 is additionally contributing development.
On Tuesday, AMD said it anticipated $5.3 billion in gross sales in the March quarter, which might be a ten% year-over-year decline in gross sales.
That’s not a rosy outlook, however it’s much 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 steering, citing financial uncertainty. “We need to be cautious clearly heading into the yr simply given the macro setting,” AMD CEO Lisa Su informed analysts on the firm’s earnings name.
But the inventory market is reflecting how the two corporations are diverging.
After Intel’s report last week, it fell over 7% in prolonged buying and selling. AMD rose underneath 2% after its earnings report on Tuesday.
Both corporations are going through a stoop 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 in the fourth quarter. Intel’s declined 36%, however from a bigger base. Overall, AMD CEO Lisa Su mentioned on Tuesday that it expects the whole PC market to be down 10% in 2023, however mentioned that AMD truly gained market share in the fourth quarter.
“It’s honest to say that we imagine given the place we’re with the shopper stock ranges, the first half will definitely be decrease. We anticipate some enchancment in the second half,” Su mentioned.
The corporations diverge extra dramatically with regards to information middle chips.
Sales for Intel’s datacenter group fell 33% from the earlier yr 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 yr whereas PC chips and graphics processors for gaming decline.
AMD’s information middle enterprise faces tough macroeconomic situations too, however on Tuesday, Su signaled to traders that its beneficial properties would come at Intel’s expense.
“In our Embedded and Data Center segments, we imagine we’re nicely positioned to develop income and achieve share in 2023 primarily based on the power of our aggressive positioning and management,” Su mentioned.
AMD additionally had success with its 2020 acquisition of Xilinx, which it bought for $35 billion. Xilinx, which makes processors that carry out specialised duties like encryption or video compression, was the predominant contributor to $1.4 billion in gross sales for AMD’s embedded division, an annual enhance of 1,868%, in response to the firm.