AMD warns of weak Q3 revenues as PC market is weaker than expected
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Advanced Micro Devices preannounced that its third-quarter results will be below its guidance due to a weakening PC market and supply chain challenges.
It is the latest company to say it would have a weak quarter, following Nvidia’s announcement that demand in China was falling off a cliff and it was slowing shipment to clear inventory channels.
AMD said it expects to report Q3 revenue of $5.6 billion, down from previous expectations of $6.7 billion. AMD’s stock is down 3.8% in afterhours trading to $65.28 a share. The $55.6 billion was up 29% from Q3 2021 and down 15% from the previous quarter.
AMD now expects the non-GAAP gross margin to be 50%, down from the previous expectation of 54%.
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Client revenue, which was unexpectedly low, was about $1 billion, down 40% from a year ago. Gaming was about $1.6 billion, up 14%. And data center business was $1.6 billion, up 45%. AMD said the embedded business, which benefited from its Xilinx acquisition, was about $1.3 billion.
AMD said the gross margin shortfall was driven by lower revenue due to lower client processor unit shipments and ASP as well as about $160 million of inventory, pricing and related charges the company took in the quarter for the PC CPU and GPU products.
“Although we anticipated a weak PC market, sales to our PC OEMs and the channel were significantly lower than expected as our partners focused on reducing inventory levels across the PC
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