Advanced Micro Devices (AMD) announced solid second-quarter 2022 financial results on August 2, but its forecast for the third quarter was slightly below Wall Street’s estimate, reflecting conservatism amid uncertainties as the OEMs continue to adjust inventories.
There was much to celebrate for AMD in the second quarter, as its revenue jumped 70% to US$6.55 billion, exceeding analysts’ estimate of US$6.53 billion. Datacenter segment did extraordinarily well, with revenue up 83% YoY to US$1.5 billion.
Although AMD continued to gain significant market share against Intel, and its market cap has officially exceeded that of Intel, the decline in PC demand still is considered a major concern.
AMD CEO Lisa Su told analysts that the company revised outlook on the PC market for this year to drop by the mid-teens percent from previous projections of a high single digit percent drop. That means AMD is even more pessimistic than Intel, who forecast a 10% decline in its PC outlook for the entire year of 2022.
Revenue in the third quarter will be about US$6.7 billion, according to AMD statement, compared with an average analyst estimate of US$6.81 billion.
DIGITIMES research forecasts global shipments of laptops to drop 17.2% in the third quarter from the same period last year, following the 23.6% decrease in the second quarter. The correction is expected to drag fourth-quarter shipment to post another year-on-year decline of 21.9%, predicts Jim Hsiao, a DIGITIMES Research senior analyst.
The lackluster demand for electronic electronic products is also reflected in the secnd-quarter results of Vanguard International Semiconductor Corp (SMIC), a legacy node foundry service provider in Taiwan. Vanguard warned the same day that this wave of semiconductor inventory adjustment period would last up to four seasons. It faces pressure to reduce prices this quarter, capacity utilization will drop from full capacity to 81-83%.
Power management ICs and small and medium-sized flat panel driver ICs account for more than 70% of Vanguard International’s revenues in second-quarter 2022.
As the third quarter is an important season for consumer electronics industry, failing to get orders in the third quarter will not bode well for furth-quarter Christmas shopping season.
Worldwide inflation and uncertainties in the economy of China, a big market for PCs and consumer electronic products, may impact consumer sentiments.
The consumer Windows nootebooks are expected to have less peak season effect than before because consumers have been buying heavily in the previous two years, and the average inventory level in most regions is already at 6-8 weeks, so the channel operators lack the incentive to place orders, according to DIGITIMES Research.
Lisa Su stressed that despite being conservative in PC guidance, AMD continues to see strong demand in the datacenter, embedded business and game consoles businesses.