Doom for AMD coming

Dads Army Frazier - doomedThings are getting worse for the troubled chipmaker AMD which has just come up with a mixed set of results just when it needs to reassure everyone it is not going down the gurgler.

For the first time its revenues were below the billion mark at $942 million. AMD did warn us that things were going to be gloomy. Last week it said that results would be flat. The actually figure was an 8.5 per cent sequential decline and a 34.6 per cent drop from the same period a year ago. Flat apparently means a gentle incline.

It is not entirely AMD’s fault. The company needs PC sales and these are not happening. In fact IDC and its ilk don’t see things picking up for a while.

AMD’s Computing and Graphics division reported revenue of $379m, which was down 54.2 percent, year-on-year. Its operating loss was $147 million, compared to a $6 million operating loss for last year’s equivalent quarter.

Lisa Su, AMD president and CEO, in a statement said that strong sequential revenue growth in AMD’s enterprise, embedded, and semi-custom segment and channel business was not enough to offset “near-term” challenges in its PC processor business. This was suffering due to lower than expected consumer demand that impacted sales to OEMs, she said.

“We continue to execute our long-term strategy while we navigate the current market environment. Our focus is on developing leadership computing and graphics products capable of driving profitable share growth across our target markets,” she added.

In the semi-custom segment, AMD makes chips for video game consoles such as the Nintendo Wii U, Microsoft Xbox One, and Sony PlayStation 4 consoles. That segment did reasonably well, up 13 percent from the previous quarter but down eight percent from a year ago.

But AMD’s core business of processors and graphics chips fell 29 percent from the previous quarter and 54 percent from a year ago. AMD said it had decreased sales to manufacturers of laptop computers.

AMD does expect the third quarter to be better with an increase in revenue by six percent. Windows 10’s arrival should is expected to push a few sales its way.