Lisa Su, president and chief govt officer of Superior Micro Units Inc. (AMD).
Bridget Bennett | Bloomberg | Getty Photos
AMD and Intel are fierce rivals in a troublesome marketplace for chips, however one has a a lot brighter short-term outlook than the opposite. Whereas Intel is anticipating declines throughout the board, AMD’s information heart enterprise is rising with the introduction of a brand new chip, and its pandemic-era acquisition of specialty chip-maker Xilinx can also be contributing progress.
On Tuesday, AMD stated it anticipated $5.3 billion in gross sales within the March quarter, which might be a ten% year-over-year decline in gross sales.
That is not a rosy outlook, however it’s a lot stronger than Intel’s information for the March quarter. Final week, Intel stated it anticipated about $11 billion in gross sales, which might be a 40% year-over-year decline.
Neither chipmaker gave full-year steerage, citing financial uncertainty. “We wish to be cautious clearly heading into the yr simply given the macro surroundings,” AMD CEO Lisa Su informed analysts on the corporate’s earnings name.
However the inventory market is reflecting how the 2 corporations are diverging.
After Intel’s report final week, it fell over 7% in prolonged buying and selling. AMD rose underneath 2% after its earnings report on Tuesday.
Each corporations are dealing with a hunch in PC market, after two years of elevated gross sales in the course of the Covid pandemic, as individuals purchased new computer systems to work or go to high school from house.
AMD’s PC chip group income declined 51% on a year-over-year foundation within the fourth quarter. Intel’s declined 36%, however from a bigger base. Total, AMD CEO Lisa Su stated on Tuesday that it expects the whole PC market to be down 10% in 2023, however stated that AMD truly gained market share within the fourth quarter.
“It is honest to say that we consider given the place we’re with the consumer stock ranges, the primary half will definitely be decrease. We anticipate some enchancment within the second half,” Su stated.
The businesses diverge extra dramatically in relation to information heart chips.
Gross 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 heart enterprise is rising strongly, nevertheless, up 42% on an annual foundation to $1.7 billion. AMD launched its newest information heart chips, the fourth-generation Epyc processors, in November. AMD expects its information heart enterprise to develop this yr whereas PC chips and graphics processors for gaming decline.
AMD’s information heart enterprise faces powerful macroeconomic circumstances too, however on Tuesday, Su signaled to traders that its beneficial properties would come at Intel’s expense.
“In our Embedded and Information Heart segments, we consider we’re nicely positioned to develop income and acquire share in 2023 based mostly on the energy of our aggressive positioning and management,” Su stated.
AMD additionally had success with its 2020 acquisition of Xilinx, which it purchased for $35 billion. Xilinx, which makes processors that carry out specialised duties like encryption or video compression, was the principle contributor to $1.4 billion in gross sales for AMD’s embedded division, an annual enhance of 1,868%, based on the corporate.
