Why AMD is faring much better than Intel in the same tough economy

Lisa Su, president and CEO of Advanced Micro Devices Inc. (AMD).

Bridget Bennett Bloomberg | Getty Images

AMD and Intel They are fierce competitors in the tough chip market, but one has a better short-term look than the other. While Intel hopes to drop across the board, AMD’s data processing business is growing with new chip launches, and its pandemic-era acquisition of specialty hardware maker Xilinx is also helping to grow.

On Tuesday, AMD said it expected sales of $5.3 billion in the March quarter, which would be a 10% year-over-year decline.

This isn’t the best, but it’s much stronger than Intel’s guidance for the March quarter. Last week, Intel said it expects about $11 billion in sales, which would be a 40% year-over-year decline.

Also Read :  Drax contributed $1B to Canadian economy in 2021, research shows

Neither chip maker gave full-year guidance, citing economic uncertainty. “We want to be cautious going into the year that’s about to end,” AMD CEO Lisa Su told analysts on a phone call obtained by the company.

But the stock market shows how the two companies are changing.

After Intel’s report last week, it fell more than 7% in interim trading. AMD rose less than 2% after Tuesday’s earnings report.

Both companies are facing a downturn in the PC market, after two years of high sales during the Covid pandemic, when people bought new computers to work or go to school at home.

Revenue for AMD’s PC chip division fell 51% year over year in the fourth quarter. Intel fell by 36%, but from the big mark. Overall, AMD CEO Lisa Su said on Tuesday that she expects the overall PC market to be down 10% in 2023, but said AMD actually gained market share in the fourth quarter.

Also Read :  Middle East & Africa Events Market Analysis/Forecasts, 2021-2022 & 2028: Increasing Demand for Hybrid Events & Rising Interest Among Youth in Entrepreneur and Business Seminars - ResearchAndMarkets.com

“It’s fair to say that we believe that given where we have customer retention levels, the first half will be low. We expect some changes in the second,” said Su.

Companies vary widely when it comes to data center chips.

Sales of Intel’s datacenter group fell 33% from last year to $4.3 billion, partly due to the late release of its latest server chip family, Sapphire Rapids.

AMD’s data business is growing faster, however, rising 42% year over year to $1.7 billion. AMD released its latest chips, the fourth-generation Epyc processors, in November. AMD expects its data processing business to grow this year as PC chips and graphics processors in gaming decline.

Also Read :  Asian economies may have to brace for rising debt, capital flight: IMF

AMD’s data business is also facing financial difficulties, but on Tuesday, Su signaled to investors that the gains will come from Intel’s investment.

“In our Embedded and Data Center segments, we believe we are poised to grow revenue and gain share in 2023 based on the strength of our competitive position and leadership,” Su said.

AMD was also successful with its acquisition of Xilinx in 2020, which cost $35 billion. Xilinx, which makes processors that perform special tasks such as encryption or video compression, contributed $1.4 billion to AMD’s combined share sales, an annual increase of 1,868%, according to the company.

AMD shares rise for fourth quarter


Leave a Reply

Your email address will not be published.